All Forum Posts by: Jason Powell

I won't comment on what you should do, but I will say that you can access 401k funds penalty free in an early retirement. The rule 72t, what John Crabtree references above and refers to as "SEPP" is, in my opinion, and very poor option for a 35 year old. What i would view as a much more attractive option is backdoor Roth conversions, and then withdraw penalty free after a 5 year hold period. You can Google this and watch tons of YouTube videos about it, so I won't launch into all the details here. 

I have prioritized shorter term flexibility over long term maximum benefit. I haven't put much at all into my wife and I's 401ks, but were fortunate that both our employers have contributed on our behalf via profit sharing. Our own savings are in roughly a 70/20/10 split between RE/dividend stocks/cash. This is somewhat close to where I want to be long term, but would like to bolster the stocks up a bit. I use HELOC and margin to do shorter term flips if I need a little extra cash, but everything else I buy with a 10+ year time horizon in mind.

In probably 5 years or so, I will pivot strongly towards funding retirement accounts for tax advantages and only because I anticipate having a level of passive income that provides my family flexibility. The biggest investment decision I find myself facing currently is how much long term I want to personally own and manage real estate vs passively via syndications. 

I would tell a 23 yr old to hit it hard prior to kids, because having a kid and being a present father is a game changer.

I got bids from several foundations contractors last year for a foundation issue I needed to screw a few pile in to attach and stop a sunken corner. 15k repair or so. Ram Jack was the best quote and did a good job. Western Construction Systems was at #2. Terrance Firma was pretty far behind. 

@Melody E Bergloff Thank you. I did call my CPA today about this too. @Neal Collins I plan on just buying a regular SFH, would be awesome on 1/4 acre but probably can't afford more than that with the proceeds. My gain will only be maybe $350k max. I'm just looking for a decent home in a decent school district that I can spend the next 20 years in (even though I know statistically that won't be the case). I was going to buy an approx $600k home anyway within the next 2-3 years, so this just makes more tax sense to take it from "this pocket" as opposed to another. Looks like I'm from the same area as you too!

@Dave Foster Thank you very much for the quick and detailed responses. I will definitely PM you in the near future. I need to do a little penciling and planning with spouse, but I think this is a true gem for me at this particular time.

@Dave Foster Also, not sure if you can answer on this public thread, but can you assist with 1031 exchanges in Oregon? (where I live and the property is located)

@Dave Foster Thanks for the great response! This is pretty darn slick actually. The one thing I missed in your response was what the "gain" will be viewed as upon the sale. I understand the prorations and recapture, but putting that aside....if I sold what would be my primary residence 10 years after purchasing it (8 years after moving in), for $1 million, would my gain be $400k ($1m sale minus $600k SFH purchase price), or would it be $600k ($1m sale minus $300k original 4plex purchase price)?

I have a 4 plex I've owned as a rental for 3 years. Cost basis 300k, value 600k. Can I 1031 exchange this into a nice $600k SFH that I rent out, and later on move into to as my primary residence?

How long would I have to rent out the SFH before moving in as to not throw off "red flags"? What would be new cost basis be when it becomes my primary residence, the original 300k or the new 600k purchase price? When I sell the primary residence many years from now, would all those gains be erased due to the 500k tax free exclusion, or would I merely be deferring them? Other questions I didn't ask?

Thank you to whoever answers!

As a seller, if I sell something as is, there are only two possible outcomes. 1) They walk and I keep a meaningful amount of earnest money or 2) They buy with zero further negotiations. Call me old fashioned, but it's pretty black and white to me. Thats the entire point of making such an offer, the buyer can leverage price by shifting risk to themself. What other definition of "As is" is there? 

Not a good investment. Smart way to make a toy less expensive. Big difference between this and real estate is that this depreciates to the tune of a few hundred dollars per month. Factor in your car payment, fixing wear and tear, and a few hundred a month for depreciation. Then subtract some hourly rate for your time (cleaning, repair, maintenance, delivery, etc). In my area, you must deliver to the airport in order to get reliable business. What's left over is your actual profit. Compare your IRR on your 10k down payment with some other investment vehicle.