All Forum Posts by: Carolyn Lorence

@Jason Hirko  Thanks so much for your response.  I'm beginning to see a pattern here! :)  I appreciate everyone taking time to provide feedback as I am not at all versed in how these types of ventures might be financed, outside of a possible SBA loan.  I realize it falls outside the investment category and was looking for opinions of those more experienced in this arena.  Sounds like that is the only option, in addition to private partners.

Thanks again.

@Don Konipol Thanks so much for weighing in. I appreciate your insight. The buyer is currently working with a local credit union submitting this as an SBA 504 loan.  And is also proposing seller financing for the property purchase of $3 million; however, the seller is only comfortable financing 25% of the property purchase.  Better than nothing I suppose!  Renovations and upgrades are currently estimated at $2.2 million. Not sure if this will conform to the SBA, but worth a shot.

Thanks again for taking the time to respond.  Much appreciated.

@Karen Schimpf thanks for your reply. This is currently a private horse farm. This is a startup.  Buyer has a business plan in place to convert the stables to an indoor venue, and plans to build a second pavilion venue on an existing slab among other venue-related facilities and amenities.  The home would be their private residence. 

Hi BP-

Seeking advice from those who have successfully completed creative financing, or current lenders for a wedding event venue.  This property is under contract for approx. 5 million, and in due diligence phase.  30% will come from buyer and private investors, and improvements will be made to expand and upgrade the existing facilities.  Can anyone recommend a lender in the Austin area with experience with this class of property?  Other creative financing strategies?

Thanks much!

@Dmitriy Fomichenko and @Brian Eastman

Thank you both for clarifying this rule and the risks associated with this type of transaction.  I hope others will benefit from this post that may have the same question.  I am surprised that this is openly promoted by some of the custodians of self-directed retirement accounts as an acceptable way to partner funds.

Thanks again, gentlemen.

@Dmitriy Fomichenko I'm not sure I follow your explanation, so please bear with me. If you're using your own cash to partner with your IRA, and each party has an undivided interest, and all income and expenses are treated and managed as such on both sides in compliance with IRS rules, how is this different than leveraging a non-recourse loan inside your IRA? (except for the fact that the entire asset is held inside the IRA and not split) We use leverage every day BECAUSE we would not be able to purchase all cash on our own, or we wish to preserve our cash, so you could consider that "enabling" a transaction. I'm not familiar with this "enabling" rule - can you please point to the IRS stipulation you reference?

Also @Mark Nolan can you please weigh in here to support your statement?  Am I misunderstanding a nuance in this scenario?

Thanks, gentlemen.

@Dmitriy Fomichenko It could be for a number of reasons, capital preservation on either the cash or retirement account side is just one possible reason.  Creative financing.  I'm specifically referring to the example @Mark Nolan has provided for the sake of the rule.  Is there is a stipulation based on the reason for structuring it this way?

@Mark Nolan and @Dmitriy Fomichenko your answers to this seem to be conflicting with regard to partnering your own cash with your SD401k. I have heard differing opinion from other plan providers.  Would like to have clarification on this subject and the appropriate IRS rule to support.  Can you or can you not partner your own cash with your SD401k to purchase a rental property "all cash" following the rules as Mark has illustrated in the example above?

Appreciate your input as this can make a big difference if it is indeed allowable. 

@Tom G.  you might also try Jerry Padilla with MB Financial.  Or Lima One Capital.

@Tom G. Have you tried Caeli Ridge with Ridge Lending Group in Portland?  They do specialize in the ability to maximize your first 10 loan spots with Fannie Mae, but I'm not certain about how they would handle your specific situation.  Worth a call.