All Forum Posts by: Dorothy Butala

@Travis Collins I'm gonna back this train up and ask you some questions, because there are way too many unknowns in the info about what you are looking to do to be able to give actionable advice.  1. What is your goal for wholesaling - are you using it as a way to make "quick cash" before jumping into other real estate activities, or is it the strategy you want to stay focused on?  2. Who are you wholesaling to - do you have a current network of investors you are working with?  3. What are you plans for deals you get under contract but don't garner any interest from investors - what exit strategies do you have in place? 4. Seems like you are trying to cast a super wide net and focusing on the number of leads rather than number of deals - curious why you are focusing on the metric of 10k leads? 5. You stated you don't have 80 hours a week to focus on this endeavor (which is totally fine, I prefer to work less than 5 hours a week, so 80 seems excessive), how much time do you have weekly for this endeavor? 6. What type of assets are you trying to get under contract - SF? MF? Mixed use? land? value add? turn key? 

Looking forward to hearing your answers and seeing where I can potentially provide some guidance. 

Side note: Direct mail is not dead - the way people do it is ineffective.  My last "campaign" added a 1.4m asset to my portfolio and provided a lead on another $750k asset in the first round of letters. 

Quote from @Huyen Ngo:

If you open a Solo 401K account, you can pull a participant loan up to $50K; but if you are borrowing for a primary residence, I believe you can pull out more because you are using it for a primary residence. I opened a Solo 401K account myself and pulled a participant loan. I used those funds to start my real estate business as a Realtor. :)

A Solo K is a great option to be able to do loans for those who have reported self employed income and no employees. The max a loan can be is 50k or 50% of the value of the account. The nice thing about these is there is no restriction on the funds usage (unlike a self directed IRA). Using funds for primary residence purchase increases the payback rule of 5 years to 15, but the 50k/50% rule still applies. Great point brining up the Solo K! 

Quote from @David Mirza:

@Dorothy Butala the part about not being able to "make contribution (neither can your employer)...".  From the article it states

"

You can keep contributing to your 401(k) while you pay the loan back—an option that may not be available if you take a hardship withdrawal.

"

@David Mirza if you only look at a single source for your info you miss out on the full picture. Look at sources other than Forbes about the specifics for loans not hardship withdraws. Some plans don't allow contributions even for loans. It all depends on the stipulations of the employees plans. Anyone looking to do a loan who wants to continue to contribute will have to speak to their HR department to determine if that is an option or not. 

@David Mirza which part isn't true? Article covers everything I stated except the inability for contributions with a loan out - and I can see my comment about that looks like a blanket comment - but it depends on the rules of the individual 401k plan if they implement that provision or not.....

I am curious about your motivation to create a site like this.  There are some monster sites that already do this.  Will it have some features that the large companies can't or won't provide?  I'm very curious about this project. 

@Matt Devincenzo My bad! I thought you were talking about her initial post, and not the follow up question where she implies taking out of her 401k!  No harm no foul, thanks for being an awesome resource - I see you aim to help a lot of people based on the volume of your posting :)

Depends on the state and the filing fees to open the LLC's and cost to file them for tax time. My attorney (Pennsylvania) recommends keeping no more than $500k-1m of real estate in any one LLC. However, if you are doing a syndication, or joint ventures, you 100% want separate LLC's for those.

OOOOH! Yep, wires crossed!  No worries.  Ok, now that we are on the same page.  You can do comps if you want and get pretty close to the market rate price.  Check out rentometer.com and then Zillow's rental pricing calculator.  I find the average rates to be pretty accurate.  To take it one step further - look at current comparable rentals on Zillow in the same vicinity of your rental - check out the overall condition, size and amenities compared to yours (look for at least three) - then use those rates as a way to hone in on a rental price. 

Oh - I guess now I am even more confused haha - you said you haven't seen the property they gave you the quote on, but you are moving out of it?

@Joey Streight I am assuming we are talking about two different rentals - seems like you got rental quotes for the second dwelling on the property you are moving into - am I correct?  I was curious about what the rent rate would be on the house you are moving out of to determine if you'd at least break even by renting it out.

And yes, you would change your policy from a home owners to a hazard policy - which is super simple with a call to your insurance agent.