All Forum Posts by: Marian Smith

I am about to go to Barnes & Noble to get a book on SDIRA's but I thought I'd see if anyone has any advice.

A friend with an S corp needs to borrow money. He is willing to sell us a 5% position in the company instead of a loan but buying shares in an S corp in prohibited. The only "hybrid" solution I could come up with was to give him a very low interest loan and in return get the shares cheaply outside the SDIRA.

I called the SDIRA office and the person I talked to said they wouldn't hold a note for below market rate but couldn't tell me why not or where to find out why not and said the compliance office didn't take phone calls.

If the reason for the prohibition os S corps is for IRS tracking, then it should be okay because I would pay tax on the disbursements every year so it isn't as if I am "contributing" to my IRA. I understand that I "benefit" from the low rate loan by getting cheap stock, but I also do not benefit from the low rate loan

Thanks for your replies. I suspect Kevin's experience would be pretty close to one I'd have. Nutty more than crazy, but not in any financial duress so no reason to sell. I'll probably take my husband's advice on this one.

There is a nice one story that is "available" for rent for months at a time. The owner is/was a realtor and used to use the MLS but now she posts it on Craigslist for way over market with no photographs. She posts about once a month. It has been on the market 8 months now. Last time it took almost a year, too.
I called last April off her sign for a friend of a friend and when she told me the rent price I said it was too high. The owner said, "Well, I have a less expensive house for rent in Arlington." (3 hour drive) She lives in a retirement area so I'm thinking little old lady. She appears to have a mortgage. 100k.
My husband says she's crazy and just leave her alone. But for the right price, I would really like to buy the place. (And a vacant house is so, I don't know, wasteful, stupid?). I thought about just sending a signed purchase contract in the mail with a beautiful pen for her to sign with and a stamped return addressed envelope. Maybe with a post it note saying "please mail immediately after signing."

integrity

I was in a multiple bid situation on a REO and lost. BOM and I put in a new offer, lower (2k) than first time and got it. When the first deal falls through they seem to get more motivated--maybe it is just "seem" but it is as if a walk justifies a further discount. You make your money when you buy.

Maybe a guy's definition of "clean and pretty" is not the same as the female half of the tenant equation. Do you have bright white painted walls, shinny brass door knobs and fixtures, popcorn ceilings, and a dusty rose colored countertop in the kitchen? Maybe your prospective tenants went with the house with light taupe walls and nickle knobs and ceiling fans with a faux granite laminate countertop. People in nice neigborhoods want their kids to feel like they have as nice a house as have the friends they bring home from school.

HUD takes 87% in my area--net to HUD. With investors. I see it frequently. I have also seen 85% once; and I've seen a lot lower a few years back with 90+ days on the market. I also see a lot of 100-105%, but they're usually nice and go to owner occupants. If you're OO you may be able to get it for lower depending upon how long it has been on the market and how ugly it is. (It is always good when the previous owner had started a remodel and left a mess.)

Money invested prior to placing a property in service or "ready to rent" is cost basis. Think of it like this: landlord 1 buys a nice property for 100k and immediately advertises it for rent. Cost basis is 100k and all expenses after sticking a for rent sign out front are deductible. landlord 2 buys the foreclosure house next door for 80k and takes 2 months to refurbish. Cost basis is 80k + 2 month holding + 10k reburbishing cost totaling 92k. Once it is ready to rent the expenses are deductible.

If you don't understand pub 527 check out a tax book at the library--J K Lasser or one of the others. You're the one who will get penalized if someone on the internet gives you bad advise.

There is a house that was auctioned at the courthouse 4 months ago. It still is not listed on HUDhomestore. The few houses I have watched typically hit the market in 6 weeks. No liens that I see. I am thinking HUD is holding it off the market until the other HUD in the neighborhood closes. We have about a 4 month supply of houses, so there seems to be no reason. Think there is some kind of new policy of only one HUD per neighborhood--per legal description? It will go owner-occupied, but I am curious nonetheless.

Thanks for your advice. It sounds like I shouldn't have trouble renting because most people don't check. The guy is unkempt with long hair, so his appearance should warn normal people to keep their distance, like a bright colored snake. I will decide whether to disclose when I have to make the decision--I am sure I would disclose to a family with girls, but probably not anyone else.