All Forum Posts by: Joe Homs

@Julia Taylor, Chase, Wells Fargo and Bank of America.

@Lilly Fang I always do both. Make sure you are on title with your LLC so that you have a say in the sale of the property. As a lender you do not. Also make sure that the loan includes all the money you are putting into the property.

Good Investing...

@Dylan S. seek advise of a CPA, but form an LLC and get a S-corp designation. You will pay about 30% in W-2 wages and the remainder as ordinary income. Your example:

1M purchase, sale of $1.4M then a $400K gain is forgetting your rehab and sales costs of approximately $150K, so your real gain is $250K.  Do four flips this year and you are a millionaire.

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@Stacy Tring where is the property at?  You can find an investor group in your area and network with them.  You can advertise it on Zillow.  You can contact a local (experienced Real Estate Agent) to help you with this.  Lots of options.

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@Julia Taylor honestly, I would not worry about your money if you kept it with the Big three banks.  What worries me is that you may have sold your investment outright and not done a 1031 exchange?  If that is the case, then you will be paying on the capital gains taxes of the sale.  

With your primary you have a 1021 exemption you can use up to $500K (Married Couples) and if there is any gain above that then you will also have capital gain taxes on that.  Check with your CPA.

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@Derek Gardner looks like you have several moving parts here.  The QI is just there to receive the money from the first sale and pay the next, so that you are not taxed on that transfer.  They should have nothing to do with your up-leg property.  The up-leg repair credit is negotiated with your current Real Estate agent and the seller agent.  If there is a credit, then that will be handled in escrow.

Yes, make sure that you try and use all the money from the sale of the first home and if there was a loan on the property it also needs to be replaced on the up leg.  I would seek CPA advise on this if you want to make sure you are not taxed on the sale excess (boot).

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@Austin M Habich I would reach out to @Dmitriy Fomichenko who is the expert in this field.  However, I have been buying and selling homes with my 401K for many years.

1) If you have purchased a property, what are the pros/cons of doing so through your IRA?  Honestly what a great tool that most people don't know about.  A great way to save for your retirement and more.

2) Do you manage the property yourself or use a management company?  You will need to use a management company.  One of the rules.

3) Have you witnessed any tax implications because you've purchased the property with an IRA?  None, if you report things correctly.

4) Any tips or tricks you can pass along with this method?  Too many to talk about quickly.

Good Investing...

@Elva Rinus check out the local meetups in the OC.

OCREIN - Learn How to Flip Homes in Less than One Hour (biggerpockets.com)

Cash-Flow Breakfast Club - Orange County CA - REI Mastermind & Networking event (biggerpockets.com)

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@Vi Huang Yes, tell him he has a certain number of days to complete the job or you will look for someone else to finish and contact the contractors board to report him.  Hiring a lawyer just makes them rich.  

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@Vi Huang contractors are only motivated by one thing, "Money."  Hopefully you have not paid him the entire contract.  If you are having that many issues with him, get a new contractor.

Good Investing...