All Forum Posts by: Mark Terry

@Ryan Schumacher Hi Ryan - This seems like a no brainer to me. Although it won’t add equity that you can pull out now, it will be worth it in the long run. First, our winters here in Boston can be rough - and tenants can be very sensitive to issues due to lack of insulation (cold spots and drafts) Second - big picture you may not have this property forever and will need to insulate before selling because that will impact how a potential buyer will value the home. This MassSave program and offer won’t last forever. MassSave is a GREAT deal. As far as the electrical work: I don’t know what the extents of the knob and tube are - if you describe the scope we can give you an idea if it is a good cost. It seems pretty cheap so I am guessing you don’t have knob and tube in the panel and there must be a few old wired circuits. DM me if you want to chat specifics!

Welcome Scott! I am still on the new side myself but there are lots of great people and resources in our area! I focus on architecture and real estate sales but just starting out on flipping myself. Good luck!

@Brian Eastman

@Carl Fischer

@Dmitriy Fomichenko

Thank you all for the robust and helpful responses.  Upon further reflection I have developed an alternative method. To Brian's point I need to pick which strategy best works for me: development and ROBS or Buy and Hold via Solo 401k. Here is a thought I have to get the best of both worlds.

I crunched the numbers on the C Corp taxation that would be required under the ROBS. The $25k benefit that I got by executing a ROBS versus the 401k early distribution, evaporates after two years in my model.  Let's disregard the ROBS then.

However, I can rollover $60k into a Solo 401k and then generate a loan of 50% of the value. This loan would only be about $4k less than net gains after taxes and penalties on a 401k early distribution but I get to keep the Solo 401k invested. This initial loan of $30k would be used to fix and sell homes via an LLC. Gains from the sale of flips could then be recontributed to the Solo 401k in the tune of $60k/yr. After some accumulation the Solo 401k can then invest in Buy and Holds in a tax sheltered environment while the LLC works separately on active development. Am I missing something? This solution seems too good to be true.

Hello BP community.  I have spent the last couple of weeks researching my start up, meeting with Attorneys and CPAs trying to find the strategy the best suits me.  I have lurked in the forum and done loads of research online. Unfortunately, the folks that I am meeting locally aren't familiar with ROBS or the ins and out of Solo 401ks.  

Here is a quick summary:

I currently operate a Sole Prop for my Architecture and Real Estate sales business and would like to start a REI business that I plan to keep separated from my Sole Prop. The main goal  is to limit my realized annual income and keep investment deals tax deferred to help grow the investment company. I do not want to take salary or distributions from REI company for at least 5 years (unless forced to in case of C Corp.) The REI business will work between 3-4 flip projects and 1 buy and hold per year. The first 5-7 years are not about generating passive income, rather building networth through real estate holdings.

I have a 401k from a job I have left that I would like to use to start the REI business. I have been looking at both ROBS and Solo 401k. The CPAs I speak to are very concerned about the "double taxation" that would occur within a C Corp of the ROBS (even though I look to keep profits reinvested, through 1031 exchanges when it makes sense) It seems that the Solo 401k would provide me more freedom but I am not clear about the non-recourse loan options in Massachusetts and if this is even a viable option. This 401k I am looking to rollover has about $60k and I wanted to invest about $20k from savings. What are folks' experience with going this route?

Thanks @Jorge Ruiz for the well wishes.

Hi @Charlie MacPherson It's great to hear that you are doing work in Rockland. It's one of the areas I had been researching.

Thanks @Filipe Pereira!  Good to know there are other architects making it work out there.  We will definitely connect.

Hi @Jon Lee.  Thanks for the input.  I have been seeking out private money relationships without much luck.  Before I headed down the Hard Money path I wanted to get some under my belt first.  I am comfortable with the terms that come with hard money, but I am concerned that I am still to green to get good traction. 

Hello BP!

My name is Mark Terry, I am an Architect and Commercial Real Estate Project Manager here in Boston, Massachusetts. I live about 12 miles south of the city in Braintree. I started listening to the BP podcasts and wanted to jump on the forums to meet the community. I am starting my journey on BP today and I am excited to meet everybody here.

My 'Why' is to create a sustainable business that gets me out of 'the rat race' and into a comfortable lifestyle that supports my family. The bonus for me is that I love being hands on (I have renovated two of my homes myself) and designing/improving properties. My experience as an architect and project manager give me a leg up but I still have lots to learn.

My goal is to start with fix and flips. I have done well with my first two homes and treated each of this as a 'fix and live' situation. We bought properties that needed work and customized them to what we needed while building equity. Also, both properties were house hacks that offset our cost of living. I am great at managing scope, budgets, contractors and schedule. Fix and Flips will be my entry point for REI but down the road I see myself getting into BRRRR and B&H Multis.

As with many people starting out, I am facing two immediate challenges:

Networking - I attended my first Black Diamond event last month and it was great, thanks @Ann Bellamy. However, I am looking to cast a wider net here for folks that can help me with mentorship and building a team. I am very motivated and excited to connect with as many folks as possible. I have started here on the South Shore, but interested in meeting people in Central MA and Worcester as well.

Financing - I have met with some local banks to discuss HELOCs and keep running into issues with DTI for future mortgages. I am looking for alternative strategies to get me into the market and to get me started.