All Forum Posts by: Dan P.

@Dmitriy Fomichenko. Right, so I guess my simplified question is if there is any drawback to doing some self-employment in order to open a solo 401(k) in order to convert my traditional IRAs into the solo 401(k)? Once that's done I can then do the backdoor Roth without worrying about pro-rata.

@Brian Eastman,@Justin Windham

I have the same question as @Paul B. but for different reasons. I am not self-employed and my w-2 wage is too high to make IRA contributions but I max out my 401(k) contributions. So I am interested in backdoor Roth contributions. The problem is that I have a large rollover IRA that is several years old. So if I tried to do a backdoor Roth strategy I will run into the pro-rata rule. So I believe I can convert those traditional IRA funds back into a 401(k) however my current employer has very poor 401(k) options and it would destroy my asset allocation.

So what I have been considering, and which led me to this post, is doing some self-employment to qualify for a solo 401(k) that I can roll my traditional IRAs into with better investment options and then allow me to start doing a backdoor Roth.

Overall that's probably a lot of work to add the Roth amounts to my overall retirement contributions but I am interested in whether it would even work and what the drawbacks would be other than the amount of work.

Thanks

@Account Closed thanks for the responses. Sounds like land contract is the way to go.

What are typical terms? Offered now is 25% down, 4.75 rate, 10 year amortization and payoff. I would like a higher rate and a 5 year balloon with a 10 yr amortization and while everything is of course negotiable I want to understand what is a common range to terms.

I have a piece of bare land in Washington that we had originally thought we would build a personal residence on. But things change and now we are selling without building. We have an offer from a  buyer wanting us to do an owner carry. I am considering it, but I have never done an owner carry as either seller or buyer and only know the basics. 

• What are the typical ways that a seller protects themselves in an owner carry?
• Mortgage versus Deed of Trust? It seems that the Deed of Trust is better from the seller perspective. Is the title company the escrow agent holding the deed? Or is another party involved? If Deed of Trust does anything special need to be stipulated or done to ensure that the buyer is the one paying taxes, etc?
• Should I use a service to collect the payments and monitor for non payments?
• Whats a typical late fee on an owner carry?
• Other than interest rate, amortization period, payoff period, down payment, what other things should typically be agreed on?
• Anything else?

Thanks!

@Devin Woods. Thanks, that's a good reminder. Always have to look at lots of properties to find the right one. In that way its no different from SFR.

@Sam Amir, @Michael Le, @Jeff B., @Crystal Smith, @John Thedford, @Gino Barbaro. Thanks all for the quick and clear answers. I have wondered whether Cap Ex should be considered when calculating NOI since I have seen conflicting info. But that makes sense.
@Bruce Petersen

@Bruce Petersen your caution of lowballing is interesting. Just from the pro forma info in the listings if I ignore their expenses and simply substitute a 50% rule and apply the same cap they did and keep their proforma rents, it often comes out at something between one-half and two-thirds their asking price. Is that pretty normal? Because offering 50% to 33% lower seems like I might be risking what you caution against. Or is that level of difference between ask and offer common in MF Commercial?

Ill be asking my realtor questions next time we meet, but wanted to get the BP pulse as well.

Thanks for the help.

Hello;

I have been investing in single family homes but have recently been looking into multifamily commercial. My realtor pulled me listings and while the majority of them are based on the prevailing cap rate for this area none of them account for all expenses in their Net Operating Income. Each listing includes a different combination of expenses, but only about 10% include a maintenance cost or vacancy assumption. And none of them include a cap ex line. So, when I add in those missing lines the prices are considerably too high. 

Is this how commercial listings go? That the asking prices are predominantly fiction? If so, is it then expected that all offers will be considerably below the asking?

As I say, my experience so far is with single family and while the asking prices there have an element of fiction, on the aggregate they are not all considerably off all the time.

Thanks!

@William E.

Thanks for the tip. An API would probably be even better. I will check out the documentation.

One of the things I like the most about redfin is the ability to download the listings from a search to a spreadsheet where I can do other analysis. Unfortunately, redfin doesn't cover some cities I have been researching. Does anyone know another portal like Redfin that allows downloading the listings? I've checked Trulia, Realtor, and Zillow but can't find a download feature.

Thanks

Thanks Steve, those were helpful. So essentially best to think of a service animal like a handicap ramp or other accommodation. As long as it is not "undue hardship". I let them know it was fine assuming they had some information that the animals provided a service for a tenant.