All Forum Posts by: Rajeev Kotyan

@Colleen Melilli: Not to be technical, but a Solo 401K with a Roth sub-component, the sub-component is ROTH 401K. 

(1) You can rollover a ROTH 401K to another ROTH 401K, but you cannot rollover a ROTH IRA to a ROTH 401K

(2) You can make an annual contribution into the ROTH 401K (Yes 24K if you are 50+ and you have had a minimum earned income of 24K during the tax year)

@Alex T.: I have not had any experience with trash specific cases, but having been through the housing court system with regards to fines passed on to tenants, even in a tenant friendly state, the judges a generally look at what the landlords have done to notify the tenants, such as posting the information (as you have done), giving them ample time to abide by the changes to rules and regulations, etc., and giving the tenants appropriate leniency if such is applicable. The judges (atleast from my experience) have tended to support the landlord as they have been prudent in following every step to make the tenant life happy and follow the law at the same time.

@Jim Copen: The fact that you have employees, you have to cover all employees in your 401K plan across all the entities where you have majority ownership or majority control (there are some thresholds -- I am simplifying it here). You could do a ROBS transaction as you suggest, but you have to allow all the employees to participate in the acquisition of the shares of your entity (of course it cannot be shares of the S-corporation that can be acquired within the 401K). If you plan to go down this method, keep in mind, you may also have to file exempt securities for your C-corporation as it would be considered an offering (just because you have employees) and you would have to spend additional funds each year to have a qualified appraisal (could be NAV, Book Value or FMV -- but must be done by a qualified appraiser) done on the private shares of the business (this is requirement no matter what).

@Eoin Maher: (I am not a CPA): You actually have to fill up both the W-9 for the US LLC checking off the disregarded entity (single member LLC) and also filling up form W-8ben-e and provide that to the rental agent. The rental agent simply has to maintain both on file, and they should issue the 1099 for your rental income to your LLC.

@Mike Bicho: There are few liens that generally do not get wiped out in a first position lender foreclosure

(1) Federal and State Tax Liens (generally the IRS)

(2) Federal and State Medicare Liens (generally Medicare, but sometimes VA)

(3) Condominium Liens only if they have been filed correctly

All of these can be wiped out with additional procedures, and working with an attorney who specializes in this space can be beneficial.

@Jason Thomas: The point I made here applies to a conversion from a Traditional 401K to a ROTH 401K as well as from a Traditional IRA to a ROTH IRA or from a Traditional 401K to a ROTH IRA (via a Traditional IRA or direct if the receiving custodian allows it)

You do not have to move the full asset either, you can decide to partially move the real estate, just that the deed will be held tenants in common between your two account (Traditional and ROTH).

With real estate you also have an opportunity get a formal fair market appraisal at the worst time of the property, when the property is being torn-down or in the worst time of rehabilitation, which can be used for the purposes of the value at the time of conversion (thereby reducing your taxes even further). Of course if you complete the rehab and sell the property at very high price relatively shortly after there could be potential questions (IRS appears to be considering intent and reasonable time -- both not clearly defined and is situation dependent as considerations). 

Working with knowledgeable professionals who can help with the strategies and documenting every step of the process, both pre and post is critical to make your accounts successful and achieve your goals.

@Aaron Smith: Commercial loans are a matter of negotiations where they are based on the property and the bank if they are willing to take on the risk. They will look at your bank roll from your property and your depth of savings, but based on situation may put a much lower factor on your job (completely dependent on the bank and what risk they want to take).

IRA based loans are completely dependent on the property and has nothing to do with you as you cannot provide any guarantees to the loan. The loan has to be truly non-recourse.

@Bryan O.: The 401K plan itself can have options and one of the options is Safe Harbor option, but all employees must get a contribution from the employer (generally 3% of their gross income -- yes again I am being very simplistic here). But going from a Solo 401K to a Regular 401K add more complexity when it comes to investing in Real Estate as you have make all the investments to all the participants, and some of this may be subject to SEC regulations on securities (yes even if it is real estate). There are some things that can be done within the 401K plan to limit the complexities, but the rules of by-passing employees are very clear (i.e. you cannot bypass them). 

@John W Sheffer Jr: What you propose is actually illegal under the eyes of the Department of Labor for the purposes of a 401K/Solo 401K (this is the agency that has primary oversight on the 401K). If you are owner of multiple entities directly or indirectly (including the method that you suggest), employees of all entities have to be considered for the purposes of having a 401K plan.

Bypassing employees through the creation of conduits is subject to penalties and fines. Please work with a knowledgeable professional on this matter.

@Tyler Alberson: Realtyshares works with a Securities Broker-Dealer and crowdfunding under the JOBS Act (which modified Rules 504, 505 and 506 of Regulation D) allows them to appropriately approach accredited investors. Work with an attorney knowledgeable about these regulations.