All Forum Posts by: Jeff White

I'm wondering if anyone has dealt with "piercing" HOA restrictive covenants? This has been a great "learning opportunity" about various due diligence areas which thankfully hasn't cost anything (yet). For background, I purchased the home for my mom, which she loves. So, from that perspective, the purchase was certainly worth it. Just the same, she will likely only live in the home for another 2-3 years. At that point, my thinking was that the home would be a great rental as inventory in the area tends to be very limited.

Short version of the situation is that the subdivision's HOA allows for only single family owner occupants. (note: one reason for the covenants was to prohibit college students from renting in the subdivision). We have recently been considering subletting rooms over the garage in the short term to give the rental approach a test run. While there was plenty of interest in subletting the rooms, my mom discovered the restriction at a social gathering. Unfortunately, we never received the disclosure package at closing as normally the case. I'm not saying that would have caused us to walk away from the home, but that was a somewhat "unpleasant" surprise.

Interestingly, the covenants also dictate all homes in the subdivision will have two car garages.  However, there are two homes with only single car garages.  Based on this and my limited understanding of covenants, I've been told that if one of the covenants are invalidated, then all of the covenants are invalid.  While I'm not looking for legal advice here, I would appreciate thoughts on how to approach the issue.  On the other hand, if someone has dealt with a situation like this, I would be interested in learning the approach taken.

As a reference, Ken Corsini wrote a blog post (2012) titled, "3 Ways to Overcome Restrictive Leasing Covenants" 

<https://www.biggerpockets.com/blog/2012/08/22/ways...> I haven't, however, found an update to this blog.

Thanks!  Jeff

@George Blower

Thanks George!  I'll have a look.  I have read up on this a little, but haven't seen the IRS pub (598) on it as yet...again, thanks!

@George Blower 

Can you give me a bit more information? I'm not familiar with unrelated debt financing income tax implications.  Also, I was under the impression that because this was in my SDIRA, there would be no tax implications.

Thanks, Jeff

@David B.& @Daniel Dietz , thank you...your experiences will be helpful.

Thanks Gentlemen! I thought that it seemed odd. I think the agent who was assisting me was just not well informed. In terms of the LTV, good to know. My plan was to finance a small portion to pay off quickly and build the cashflow. The 60% figure gives me a target.

@Carl Fischer, regarding NASB, that's who I have been looking at using for my lender.  As well, I'll add the book to my list!

Again, thank you both!  Jeff

While still relatively new to BP, I have begun taking steps to grow our real estate portfolio.  My current project is to use my SDIRA to purchase a turnkey property.  In preparation, I've made contact with both a non-recourse lender and a custodian.  In my conversation with the custodian, I described my intent to leverage the property in my SDIRA by eventually taking out the equity in order to purchase another property.  The representative told me that leveraging an existing SDIRA property was not possible.  If I wanted to take the equity out, I would need to sell the property in order to realize the equity and then by a new property.

Is this true?  I can't seem to find much on the internet in this area and hopefully there are some folks here that can help with this question.

Thanks, Jeff

Heather...apologies as I have another conflict this weekend.  I look forward to April's event.  

Thanks, Jeff

Thanks George!  I actually already have another account with Pensco...

Thanks everyone for your quick replies.  My primary purpose for this post was to get the first post out in order to participate in other forum discussions.

Regarding the sdira, I figured there would be challenges associated.  But, like many other things, those challenges just serve to make one figure out how to achieve the objective.

@BrianEastman...thanks for your reply and detail.  I will search through the different discussion threads.  You've given me some additional detail to consider

@LaneKawaoka...yes, kept the house we lived in for almost 10 years up in Mililani Mauka.  I haven't been impressed with our PM and have been considering replacing them.  I'm interested in your thoughts...please send me a PM to continue the discussion.

Thanks, Jeff

Good Morning Everyone!

My name is Jeff and I live in the Norther Virginia area with my wife Shelley. Like many other newbies, I've been lurking on BP, listening to podcasts and webinars, and getting a sense for the tools and resources available on the site. We are looking to move more into SFR market. We have dabbled in real estate over the years and currently own a home in Hawaii we are renting, albeit at the expense of many lessons conveyed on this site. While we are having PM issues for which I've been sifting through experiences of others on the site, we just need to make a decision as to whether we want to fire the current PM and hire a new one or if we should give our current one another chance. Regardless we both have determined we want to move more actively into real estate investing and take it to another level as a pathway into our "retirement career."

My question really points toward using a self directed IRA to fund our first purchase in this area. While a tough market, as many have said, one can find deals given a bit of patience. In terms of using the IRA, its the accounting of the debits/credits. I do have an accountant to confer with, but like most accountants at this time of the year, their time is at a premium. As well, how cumbersome is the process of moving the money to the third party in order to execute the funds?

In any case, I've found a property which I'm considering as possibly a good first step.  Anyone with thoughts and/or experience on this question, I would appreciate your thoughts.  

Lastly, Mindy, Brandon,  Josh, and Scott, thanks for the variety of topics on the podcasts.  They have been instrumental in bringing my wife on board and illustrating how we, too, could use real estate investing to our advantage.

Many thanks in advance...Jeff