All Forum Posts by: Brant Richardson

The rep for my administrator said they used to allow directly buying real estate but the fees and paperwork became prohibitive and they now do not allow it any more.

As an employee do I have the right to choose an administrator or become my own administrator? Or is that up to the company I work for?

I talked to a representative about making my 401k self directed to invest in real estate this morning. He said I can not invest directly in real estate with a sd401k but I can invest in an LLC with the sole purpose of owning real estate. This seems like it would defeat the purpose of tax deferred investing. The LLC would still have to pay income tax right? Only the profit that the 401k made from the LLC would not be taxed right?

I couldn't find this specifically with a search of the archives.

The thrill of the hunt with a long term goal of 100k in passive income. Followed by world travel with no necessary time to return home. It WILL happen.

Wow, that is great news. I will consult a local CPA about the step up. Thanks for all the help.

I believe there is no estate tax until you inherit 5 million. But the house was bought for 125k and if sold for 700k I figure the government is going to want their capital gains tax unless I figure out some kind of strategy to use the 1031.

"Could the house possibly become your primary residence? If so, read up on Section 121 exclusions."

You'd think a 700k home would be a beautiful mansion but it is not. It is a crappy 2/1 built in 1915.

"If you refinance & then exchange, you would still have to acquire replacement property equal to or greater than the total value of the relinquished property, to avoid "boot'."

I absolutely want to reinvest every penny. I just know I can use 700k to get a much higher rent than $2150 per month.

"If you borrow from a traditional lender, you will have to qualify & comply with their underwriting guidelines for non-owner occupied property (Income, Debt Ratios etc.) You have to plan very carefully & have your ducks in a row"

This could be a problem. If I pulled 80% out of that house with a cash out refinance, I would be at about my limit of debt to income ratio for traditional financing. I might have to buy the new properties in cash, then refinance them after the main property sold.

"I have learned to plan exchanges well in advance & utilize & other more involved strategies to prevent 1031 panic."

These strategies sound interesting. Are there any books or other resource dedicated to this kind of thing? It would be a total panic trying to buy that much property.

Thanks for the help.

I will eventually inherit a house worth 700k which is owned free and clear. I would like to use the money as capital to buy many financed properties worth 100-150k each, so we are talking about making a lot of deals. There's no way I could possibly identify that many properties in 45 days.

Could I refinance the property and pull out 80% of the money and invest it at my leisure, then sell it and use the other 20% to conform to the 45/180 day rules?

Or maybe sell then buy the new properties with all cash and refinance later for further acquisitions.

Are there any tricks like that for extending my time to use all the money?

I know it would be easier to buy one large multifamily but I don't want to do that.

One of the most uncomfortable parts of investing out of state is not knowing the neighborhoods. With numbers approaching anything close to that deal and your word on the neighborhood I would be feeling fairly comfortable. There are ways to make a buck on realestate in Santa Barbara, flipping or just being a real estate agent but my goal is buy and hold. The cheapest EMPTY LOT is listed for $340k here, cash flow is out of the question. I just need to decide on a market. So anyway, wholesaling is something to think about if you have more deals than you can handle, raise some quick cash for your next acquisition. With the name you have made here on BP I'm betting people would line up.

I was recently asking about loans beyond #4 and you can get traditional financing on up to 10 properties. So I would skip the private money, or most of it anyway. Check out the post below for actual banks doing this.

http://www.biggerpockets.com/forums/517/topics/103585

Sounds like you have too many deals. When you are ready to start wholesaling I think there might be a few buyers for you on BP. That is a cash cow.

If you can get 14% ROI on those nicer homes, I still say don't change a thing about your model. What kind of ROI are you looking at with the cheaper homes?