Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Nick Scalero

Nick Scalero has started 16 posts and replied 43 times.

Post: Self-Directed IRA Business Structure - Feedback please

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

The restrictions are the normal IRS restrictions (can't buy collectables, can't buy then live in the property, etc).

As long as it's a self-directed IRA there does have to be a custodian for the IRA, no matter what the structure is. That's my understanding of it.

Post: Self-Directed IRA Business Structure - Feedback please

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

So I have this chunk of change in my IRA. I found a company (NAFEP) who will be the custodian for a small fee. They will setup a Trust for me and buy interest in the Trust from the cash in the IRA. The cash will go into a bank account in the name of the trust and I can write checks to buy assets (with some restrictions).

So I put $200 - 250K in, purchase a property or two (also in the name of the Trust). The rental income from the property goes back into the bank account. the property appreciates, hopefully... ;0)

I can also open a brokerage account (also in the name of the Trust) and fund the brokerage account from the checking account. That way I can reinvest the small amounts of monthly income from the property into traditional assets (i.e. securities). and keep the money compounding that way.

Setup cost is reasonable and I'm not ready to discuss ROI, etc. This is not a business plan. I only want to get feedback on the structure.

It seems that the only items I'd have to manage are the bank account, brokerage account and rental property (or use management). The Trust would have to have an annual tax return, but I will pay someone to do that.

I don't need dispursements for more than 10 years.

If I die in the meantime, the Trust and it's associated accounts and assets would go to my wife as benificiary.

Post: Using IRA to fund RE Investments

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Trustee sale is one option.

Having to go to a custodian and fill out a form for earnest deposit check or to pay for other expenses seems like a lot of sideways management to me.

Post: Using IRA to fund RE Investments

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

I've posted before about self-directed IRAs and have continued to learn (but haven't bridged the gap yet).

There are a few companies out there that will help set up what is called a check-book IRA. It goes like this:
1) Set up a self-directed IRA with a company that acts as the custodian.
2) Create an LLC with yourself as the manager.
3) The LLC opens a business bank account.
4) Direct the custodian to buy shares of the LLC.
5) Buy assets in the name of the LLC.

The problem I see is that the custodian gets a cut, the company setting up the LLC gets a cut, the state gets a cut (California charges $800 min tax per year on LLCs). All this eats into the margin.

There's another company, NAFEP, who will do the same but instead of an LLC they set up a trust with you as the manager. The trust has a bank account and assets are purchased in the name of the trust. This eliminates some of the costs associated with the LLC.

The problem for me is I just don't know who to trust out there. Has anyone done business with NAFEP? Does this sound like a reasonable path to get my IRA available to fund Real Estate Investments?

Post: Any Good Company recommendations?

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Interesting... 123 views but not a single positive response. That's disappointing. Makes me think either there are only hucksters out and no reputable companies or no one wants to share their good finds.

Post: Any Good Company recommendations?

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Thanks for the comments Josh.

I don't have faith in the stock market anymore. It seems to over-react to any news. It feels like a roller coaster ride.

I do expect to have to manage the managment. That said, I'm still looking for recommendations.

Post: Any Good Company recommendations?

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Most of what I read in this thread are negative comments. I'm searching through posts to find a company I might actually want to work with and can trust. I'd like to do turnkey deals or something else that doesn't require a lot of my time (I already have a full time job that I like).

Any positive suggestions???

Post: Turnkey Opportunities - Good or Not?

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

I've seen a number of websites that offer turnkey opportunities for real estate investing. I'm a busy guy with a family and a full time job. This seems like a simple way to go.

For those of you who have experience with this... is this a good idea or not? What are some of the pitfalls to watch out for?

Thanks,

Nick

Post: HOUSING INVENTORY

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Here we are, almost a year later and supply is low. Hummmm..... It's odd. We know there are a lot of foreclosures out there but the banks seem to be hoarding them.

Post: Losing out to cash buyers

Nick ScaleroPosted
  • Real Estate Investor
  • Mountain View, CA
  • Posts 53
  • Votes 6

Seems like a seller's market here in CA. Inventory has shrunk in the past few months.