All Forum Posts by: Jon R Gimble

Investment Info:

Single-family residence fix & flip investment in Waco.

Purchase price: $205,000
Cash invested: $50,000
Sale price: $289,000

Home purchased as primary residence.

How did you find this deal and how did you negotiate it?

purchased from friend's grandmother.

How did you finance this deal?

conventional loan

How did you add value to the deal?

Repaired subfloor and pier and beam foundation due to water intrusion, added French drain to stop water intrusion, and redid floors, fresh paint, and removal of rotten pergola.

What was the outcome?

Sold after four years of ownership to purchase next project/residence.

I believe it would be possible for this transaction to go another way. Instead of the IRA buying the asset, couldn't it loan the money to an LLC with a repayment plan? If the IRA was never the owner, but a secured lender, then you don't run into the issues that you outline above of self-dealing.

Then the LLC could cash out the BRRRR transaction and repay the IRA. That structure looks like it could work within guidelines, and not cause the above concerns that you referenced? One would still have the advantages of tapping into the wealth of your IRA, but instead of it being the purchaser, your retirement account would be a secured lender. Additionally, the retirement account could receive the higher interest payments tax-free, instead of a hard money lender.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $215,000
Cash invested: $50,000
Sale price: $379,000

Purchased home in established neighborhood, and over three years was able to go room by room refinishing the house.

What made you interested in investing in this type of deal?

Have a busy & fulfilling day job, but enjoy taking on home remodeling projects in "spare" time.

How did you find this deal and how did you negotiate it?

Referral from a family member of the previous owner.

How did you finance this deal?

Traditional FHA loan.

How did you add value to the deal?

removed 30 year old carpets, refinished hardwood floors, and added new hardwood floors. removed wall between dining and living room to have a more open floor plan. removed 35 year old wallpaper and textured and painted rooms. Also got the added bonus of repairing/replacing rotten or beginning to rot timber framing under the house, and adding a french drain to prevent future water inundation of crawlspace.

What was the outcome?

Held the house for a few years (past the required ownership for taxation), and listed for sale.

Lessons learned? Challenges?

on bigger projects doing them solo, detailed checklists help keep a sense of progress, and build momentum.