All Forum Posts by: Shelby Willitts

Is there a reason why you are trying to buy up the hill?  I just bought a condo in Cameron Park last year and it's been a goldmine.  Although I'm using it as a long-term rental, I think you could find some equally compelling properties that could be used as short-term rentals as well in that community. 

@Matthew Swearingen I have recently purchased a condo with funds from an SDIRA. The plus of this was that I was able to offer all cash. The negative is the restrictions around spending the money for things on the property. I think the return you get will all depend on what you pay for the property. Like any real estate investment “you make the money when you buy”.

Originally posted by @Jared Friedman:

@Shelby Willitts

This is completely untrue. I own several single family rental properties in my SDIRA and you never need to get an appraisal every year. You’ll get an asset valuation form to fill out online that you do yourself. There is no charge for this. You can literally just use your year end property tax statement as verification of the property value. The problem with getting advice from financial planners is they will 99% of the time steer you away from SDIRAs because they have no way to make money off of you anymore.

 Would you mind sharing what SDIRA administrator you use?

@Todd Goedeke The LLC does not HAVE to be setup, it just makes sense for certain investments. It also limits liability if set up properly.

@Todd Goedeke I have confirmed that I can keep my current employer simple open and can continue to make contributions to this account which is ideal because I would like my money not invested in real estate to still be getting the best return. My current financial advisor on my company plan has assured me that he can liquidate any investment in the market within 48 hours, which matters if I have an expense I need to pay for the property in the SDIRA. I am able to make direct wire transfers within the two accounts without penalty as often as I need. As long as I don’t take a distribution and redeposit into the SDIRA I can make multiple money transfers (for the small fees they charge) but the distributions/redeposit you can only do once a year.

@Todd Goedeke Right! I have researched this pretty extensively in the last couple weeks and have found that the traditional SDIRA is best for turnkey properties where there’s a purchase and then very few expenses to be paid (taxes, insurance and property manager). I have found that distributions from the account are charged a fee per transaction so for every payment the administrator makes they charge $10-35 depending on the provider and type of distribution (wire vs. check).

The checkbook IRA is expensive to set up (and in California an LLC must pay an $800 per year tax), but ultimately will avoid all the little charges for each distribution. Makes sense for buying properties that are rehab-type where you're paying for contractors, materials and other items to many different companies. Also allows freedom to make those payments instantly rather than having to file paperwork to have payments made on your behalf.

@Jesse Brown I’m interested in joining this group. We are looking for an off market property near campus. Would love to start networking in the area. Can you let me know the group name because the FB link doesn’t seem to work from my phone?

@Terry Parkyn My current financial advisor warned me of this as well. I spoke with the SDIRA providers that I’m considering and they informed me that a formal appraisal was not necessary, but that an annual evaluation from an industry professional is required. I would surmise that some providers would ask for this either to cover their risk or they are cutting fees elsewhere to make their product look more enticing to perspective clients then use this as a way to make up for the missed fees.

@Charles LeMaire Thanks for the info. Being new to this we are looking for all points that would help/hurt us if we choose to go this route. I did some research on the points you made and it looks like we won't have UBIT since we aren't going to be using financing. We are also not eligible for the solo 401 since we are not self employed. Our only options at this point are the SDIRA or the "checkbook IRA". Both are good options, but it will depend on what type of property we ultimately purchase. (Fixers will be better suited for the checkbook, and turnkey would be better with the traditional SDIRA)

Hello Lawrence, I am also looking for like-minded people.  Let's get @Jeremy Blevins to set up another meetup.  The weather is perfect for Out of Bounds brewery now. See this link for details:  https://www.biggerpockets.com/...