All Forum Posts by: Michael Pulka

Oh.  That makes sense.  Where can I read more about this? Is there anything out there that describes the ins-and-outs of this?

Is there a penalty when withdrawing funds from the 401k to pay for expenses related to the operation of the property? What is the typical process for making routine withdrawals?

So now that I've got the function of the self directed fund and it's application to a RE investment figured out I've got a few follow on questions as I think through the scenario.

If I were to purchase a single family home using this self directed fund (solo 401k in this example).  I would likely use it as a rental and thus all capital gains would roll back into the 401k.  How would I go about setting up a slush fund for accessing funds to pay for repairs/upgrades or simply bills in order to upkeep/run the property?  Would this work as I am a disqualified person?

I was overthinking it.  I got it now.  So that is why when leveraging one must secure a loan that is guaranteed by the lender because the "disqualified person" (me) cannot guarantee the loan, correct?

Ok.  So this concept would work in a buy in hold for a rental situation, as long as the renter is not a disqualified person in a qualified plan.  But according to the IRS regulations - I could not use this qualified plan or assets to my personal benefit...  Am I getting it now?

Is this what @Bernard Reisz was getting at  previously ...not technically sound ... make peace with prohibited transactions?

Ok.  Back to the topic.  I think leveraging would become complicated in my case.  So maybe it may be best to accomplish my goal in two distinct steps in order to avoid the restrictions/complexities of the the prohibited transaction rules, and remain somewhat conservative in my approach. 

What if:  I purchase the land with my solo 401k.   Then later refinance with a loan and effectively buy the land back from the loan and then build with structure with same loan.  What would be the consequences in this case with respect to the prohibited transaction rules as I would be buying back from myself in the end?

Bernard/Dmitriy

If I were to secure the Solo K in my name and use it to buy say the land.  Then Later my wife (who is not a participant) in the same plan were to secure a conventional loan to build the structure, would this be allowed? Or would it somehow conflict with the disqualified person rule?

Sorry confused you in my writing. I was trying to explain that the total sum of all fees can sometimes become significant.  The VRBO Service Fee - itself is just one fee that I would like to avoid.

I'm using VRBO (for my vacation rental) but have had a bunch of potential renters turn away as a result of all the added fee's that VRBO attaches to the quote.  In some cases these additional fee's can be almost double my basic nightly rate.  

I'd like to keep using VRBO for the exposure but I'd like to create a work-around to avoid all the excessive fee's imposed on renters and thus driving them away.

I'd like to know what others are doing out there who've also seen this?  What works for you?

Hi I'm Mike and I've recently invested in a property in Towamensing Trails, PA. 

 I am trying to build a local network (and conversation) for other investors in the same area, doing the same thing.

I'm sure if this describes you, then you, like me, have questions too.

I'd like to know if anyone out there in the forums has historical data regarding vacancy rates of homes in Towamensing Trails? What is your overall vacancy per year, etc...