All Forum Posts by: Savannah Gates

Thanks so much for that tip. I’ll make sure to research that. 

Thank you!

Hi! I've been doing some research online and am having a hard time finding the answer, so figured I'd pose my question here. We are looking at purchasing an REO in our area for cash, using a checkbook IRA to fund the rehab and then refinance and pay back the checkbook IRA (depending on the appraisal, we may or may not put in more than we pulled out). I'm wondering if:

a) Is this even possible assuming we do none of the work ourselves (not even changing a light bulb) during the phase we use the $ towards the rehab?

b) Is it possible since the home will be purchased under our name? If not, is there a way to make this possible?

I've read lots of articles that address using a SD-IRA to purchase or flip homes, but they all include the IRA LLC as the buyer, whereas we would like to purchase the property using our own cash funds snd title under our name. Is there another creative solution to funding the rebab portion of this REO deal using money we already have in 401k, traditional and Roth IRA? The answer may be it's not possible, but having a clear answer one way or the other would be helpful. Thank you in advance for your replies.

@Teri Feeney Styers, that seems like a good compromise and smart investment. I still like the idea of buying a minor fixer, so the equity will (hopefully) be greater when we do take out a HELOC

Thanks for your advice @Chris Youssi. I really appreciate it! Maybe my husband will be more on board once we’ve actually had one investment property and are reaping the returns 😝

Thank you so much to all of you who have so thoughtfully replied! There is a lot to think about here and I think my husband and I need to talk more about our long term goals to figure it out. And maybe whatever property we find will help settle the dispute as well. If the numbers work, they work, and hard to argue with that! 

@Chris Youssi 1) this is another issue between my husband and I. I want to grow the portfolio rather quickly in comparison to my husband (who doesn’t want a portfolio at all), but has agreed we can thInk about a second rental property in 3-4 years. Whereas, I would like to purchase 1 property a year if the numbers allow... but that’s a whole other thing. Maybe bigger pockets should do a discussion on this aspect of investing. Ie, when one partner doesn’t want to! 😝

2) cash flow is more important to my husband, but leverage is more important to me. Like I said. This is a marital dispute! Maybe BRRRR is the right pathway for us, similar to what @Lynnette E. does (as in using cash to finance a fixer) for the first property. That way, if my husband and I decide to increase our rental portfolio, we have the option of financing the next purchase through refinancing. That might give us the greatest flexibility with either slow or quick growth of our portfolio. 

Any thoughts on that? 

Hi,

My husband and I disagree on this point, so thought I would get some other (hopefully, and more likely), educated opinions. A little bit of background: Through some hard work and a strong market, we are walking away with $150k cash from our primary residence home sale after 2 years living here. Other than accidentally flipping our homes (our first home 4 years ago had great returns as well), we are not real estate investors and have no experience.

However, we want to be as smart as we can possibly be with $150,000 in tax free cash. Enter real estate investing. We are moving to an area where the average move-in ready multi family is $150k or less. We plan on owner occupying the MFP until we find a long term home in our new area. From there, we are giving ourselves a couple years to purchase a third home - our second investment property, so on and so forth. 

With that in mind, the question is this: 

Should we buy our temporary owner occupied multi family (still buy and hold though) with cash (that’s a lot of eggs in one basket, but also not ALL of our eggs) OR use traditional financing to purchase with 20% down (and keep even more eggs in the already fullish egg basket)? 

Both have advantages and disadvantages, but is there one option that has a greater advantage in our particular situation? Or is it really just personal opinion and goals? 

Thank you in advance and I look forward to hopefully settling this marital dispute in short order!