All Forum Posts by: John Vo

So I"m just learning about self directed IRA and it seems there's quite a few possibilities that is available if I can properly use this strategy to buy real estate. Here's a strategy that I've been kicking back and forth, so I thought I would pitch it to the biggerpocket audience to get some feedback. The scenario is purely fictional, there's some holes in the story but bear with it. Here's the scenario:

I would like to purchase a commercial property for $2,000,000 using an SBA loan. The loan require 15% down payment and for the sake of this scenario we're not including financing or closing cost. The SBA loan is fully recourse, which I will personally guarantee. The property also needs $200,000 in capital improvement. So total all in cash required is $500,000. 

I setup an LLC, and put in $50,000 of my own cash as seed money. I then solicited 2 friends to come into the deal and each of them are willing to put in $150,000. So we now have a total of $350,000. Seeing that it's not enough, I then pull $150,000 out of my self directed IRA account to invest in the LLC to bring the total seed money to $500,000. The structure of the LLC is that I will be the managing partner owning 55% of the company, while each of my friends are silent partner owning 15%  of the company. My self directed IRA account owned the final 15% share of the company. We're planning on hiring a professional property management company to run the daily operations of the investment property as well as implement all capital improvement.

The question is, can my self directed IRA invest in an LLC that I'm the managing partner?  

Hey All, I've recently bought a property in Houston and had to file an insurance claim on it 2 week after I purchase the property. Long story short, there was a windstorm not long after I purchase the property and created damage to the roof so I filed an insurance claim when I saw the damage. The claim was made almost two months ago and I was present when the insurance field adjuster came out almost two months ago. He agreed that the roof needed to be replace and that the roof was not the original roof and that it was wind that cause the damage. After following up with the insurance desk adjuster consistently, 

Back to the present, I just got off the phone with their "Director" of special insurance case, whatever that means, where we've had a pretty combative conversation where I get the feeling that he was fishing for something and I said as much to him. One of the thing he asked was "how much did I bought the property for" to which my response was how is that information relevant to whether the property had damage to it before the purchase and whether the property had damage to it after the purchase. One of the other question was why didn't I perform an inspection, and why doesn't the loan require an inspection, to which my response was I felt that I didn't need an inspection because I knew the history of the property being their neighbor as well as I saw what was repaired when they listed the property for sale, and that there are no loans that required buyer to have an inspection done as well as there was an appraisal done on the house where a property appraiser saw the house physically. 

So, I would say that I'm in need of an public insurance adjuster to help me out since I have a strong gut feeling that they're looking to deny my claim. Any recommendation is appreciated!

So I did talk to a representative from the church. I posed the question of why didn’t they ask the tenant for a W-9 instead of me and the short version is that, it’s their procedure to make the check directly to the landlord not the tenant. So they need a W-9 from me since the check will be made out in my name. I’m still uncomfortable with giving anyone that I don’t work for a W-9, so we’ll see what can be work out with the church as I’m waiting for a call back from someone who can make that decision.

Cara Lonsdale Thanks Cara! I agree with you that the church is probably thinking that they don’t want to give money to the person requesting aid for rent and want to give it directly to the landlord. This can probably be resolve with the tenant providing the church her W-9 and then the church make a check out to me instead of her.

I received one of the strangest request today. My tenant called me and asked me to supplied a W-9 to her so she can give it to the charity that is going to help her out with her rent. As this is a head scratcher, I looked up on the internet for some possible reasons why a church would request a W-9 from someone's landlord that they're giving out monetary aid to and I gather that it's an IRS rule that anything over $600, they have to give a 1099-MISC form to the person they give the money to. In order to give someone a 1099-MiSC form they need that person to fill out a W-9. My thinking is, why in the world would I give my personal info to anyone that I didn't make a request for aid to. Shouldn't the church ask the tenant to supply them with a W-9 form instead of me? Thoughts? 

Thanks Mindy. I appreciate the insight.

So I just saw a property being listed for short sale in my neighborhood and just wanted to get some advice on how the process work as well as the chances of this short sale going through. I'll give you the info that I was able to dig out:

1) Property is being listed for $299,000

2) Owner owed $370,000 to the bank

3) I valued the property as $375,000

4) The property was listed on the MLS for 174 days, and price was dropped to $299,000 recently from $399,000.

5) The Houston market in general is pretty healthy, it's currently in 4-5 month of inventory so it's neither a seller nor a buyer's market. 

With that said, my main concern and skepticism even before putting in an offer is that there's no way the bank will accept the price of $299,000 when the owner owed $370,000 in a generally healthy market. So is this a deal or is this a bust? 

Mike Reynolds Thanks Mike! I will look him up.

@Belinda Lopez Thanks Belinda, I'll definitely try to make the meeting this Saturday.

Hi all, 

    I'm thinking about doing a mortgage wrap and would like to see if anyone know of an attorney in Houston, Texas that has experience doing this kind of owner financing. Thanks in advance!