All Forum Posts by: George Rodriguez

You can always try Foremost.

Thanks Brian! I'm asking him to see any paperwork from the probate ! 

Thank you Guy! Yes I've read some of the articles posted online from probate attorneys. It seems like there are times when court approval is needed and other times when it's not. I guess depending on each situation. I've still have to read more.. But not over read ! I'm reaching out to a local probate attorney as well! Yes I agree if the sale is going to require many hurdles and independent appraisals then it would extend not only the sale but also kill the deal !

Hello BiggerPockets community ! I recently came across a selling prospect who has his property for sale in probate. The probate was recently initiated in Illinois and he is wanting to sell to me at below market value. My intentions with this property is to update it and flip it. It needs about 20k in updates. Am I in for a long arduous process requiring court approval and/or an independent appraisal of the home ? I'm asking so I know and can be prepared with how to handle and be a step ahead... 

How is the competition in mailing to probate leads vs absentee owners? I've been reading stuff online and see that it's more challenging to get quality probate leads and they can be pricey as well. Does this deter a lot of investors from mailing and/or is it the hurdle of the probate process ? Jorge

I bought a home in April 2015 and rehabbed it. I put it up on the market for sale and rent at the same time. I have an interested couple in renting the townhome for a 6 month lease. So that would give the home back to us for selling in the summer. My question is should I sell now ( subject to short term capital gains, self employment taxes) or rent out and sell after the one year hold ( subject to long term capital gains) ? Also what is the long term capital gains for real estate? Are there other tax considerations? Jorge

Originally posted by @Brian Eastman:

@George Rodriguez

The right approach in your situation will depend very much on what you goals are. 

My goals are to make a 18k employee deferral every year ( taxed up front and no taxes when withdrawing at age 59 1/2. Also I'd like to grow the money for retirement.

Having done one flip deal and paying UBTI taxes will that disqualify the whole SOLO 401k plan?  Or can I keep the existing SOLO401k Plan and invest in unrelated investments?

Originally posted by @Brian Eastman:

@George Rodriguez

A Solo 401k can flip houses, so long as you remain at arm's length to the transaction.  In all likelihood, flipping 1-2 homes per year with such a plan, considering that you are also personally flipping so many homes would expose the gains on those flips to UBIT taxation.  The IRS looks at the entire picture of activities to determine whether the plan meets the threshold of engaging in a trade or business on a regular or repeated basis that create such exposure.

Acting as a hard money lender on flip transactions would not expose the plan to UBIT, but could result in lesser returns even than going ahead and flipping and paying UBIT - it all depends on the quality of the deals.

The ROBS plan does "avoid UBIT", but is an entirely different type of structure for a different purpose.  Gains are still taxed, just at a lower corporate rate than the trust rates that apply to UBIT.

The right approach in your situation will depend very much on what you goals are. 

 How much is the UBIT taxation? 

I'm an active investor rehabbing and flipping 10 or more homes a year. So this is my primary " bread and butter."  Can I flip one or two homes through a Solo401k when partnering with a qualified person ? 

First a couple of questions.. 1. How many appraisals have been done? 2. What type of appraisal? For what purpose? There is the chance that you can fight the appraisal! Or pay for your appraisal to consider the work you've done.