All Forum Posts by: Andrew Grieb

@Jeff Astor 

We just use Custodial accounts right now because we don't have many expenses to write out checks for, the management company takes care of that directly with the custodian.  I would imagine the checkbook style account would also be more scrutinized for an audit risk, what are your thoughts regarding that?

Melanie,

If you believe real estate is the way to go for investing, you should consider purchasing properties in your IRA if you convert your 401K to either Roth or Traditional IRA. Either way, you will not be able to use that money until you reach the magic age, but I see no reason not to invest in multiple items other than Mutual funds.

My wife and I just converted our IRA's to Self Directed. She had a 401K that she converted to a Traditional IRA; mine has always been a Roth. We just purchased a Duplex in our SDIRA and so far I am pretty happy with the transaction that is seeing a return of 12%. We bought it 50/50 with each of our IRAs because 100% of the expenses of the property have to come out of your IRA--we can't co-mingle personal funds or we could be subject to UBIT. We have $80K property that if we had expenses come up that had to be paid, our IRAs would split the expense. We also invest in notes and mutual funds within the IRA money.

Basically here is how it works: rather than invest in a mutual fund, the IRA purchases and owns a property. The custodian (bank) that holds your IRA sends a check to closing for the property and you never touch the funds. The management company handling the property submits all bills or rental income directly to the IRA Custodian accounts and we never touch the retirement funding. We pay an annual fee for the IRA custodian and all little transactions under the account are included for the management of that property.

You can ask me any questions you like if you would like me to clarify. There are many other ways that you can get creative with the funds. You can write notes to other investors with those funds and let your IRA earn that way; there are many firms out there that sell notes. You can invest in a fellow investor's deal that they might not be able to fully fund on their own, but you could provide funding from your IRA and provide a note. That investor would make cash to use now and your retirement would grow. You could then borrow from that same investor out of their retirement to fund a deal you are working and you could earn income, while their retirement earns for them.

I am weighing the options of converting our other traditional account to Roth and I think we are going to.  The penalty is steep, but which is worse:  Paying $50k of your $150k now or $500K of your $1.5 million in 30 Years?  Keep in mind that once you exceed a certain income level (I believe it is $180K?) you can no longer invest in a Roth.  I like having the Roth now because in a few years I know I will exceed that limit and no longer be able to contribute.

All sorts of ways to use your IRA.

BP,

I have used Paradigm Property Management for two years and I just decided to let them go last month.  You are truly hiring the person and not the company, because a great manager can make or break your business.  The owner of the company decided to move to Ocean City Maryland to work with vacation rentals, only she left no one with real estate experience in charge of her residential property management in Baltimore, Md.  

The new manager failed to make 6 month inspections for over a year on two of my properties.  My tenants pay one month's rent in advance and on two separate nonconsecutive months the management failed to catch a tenant who failed to pay rent.  The manager still paid my portion of the rent to me, so I did not know that the account fell down to a zero and then negative balance.  The following month the management would ask for double rent from the tenants and the tenants believed they were being double charged.  My tenants of five years elected to terminate their lease rather than stay with this bad management company.

Paradigm has failed to pay the tenants security deposit back, 50 days after the tenants have left the property because they are trying to collect a two month's rent early termination fee, despite written notice from me that I am going to waive that requirement for my tenants of 6 years.

I would not recommend this company.

Can Any Maryland Investors tell me how much difference there is between accepting a Section 8 Voucher and the Metropolitan Baltimore Quadel tenants?  I'm really opposed to accepting a voucher, but if it comes down to finding a quick qualified tenant, I might have to consider it.

Any advice would be helpful.

@Brandt Tingen I'm used to the lead inspections there--while overbearing and ridiculous, the mitigation is pretty easy.  I haven't had to deal with mold mitigation yet, that's why I was curious.  @Chris K. the state of Maryland scares me.  The house of delegates has a bill moving forward since June to tax investors of 5 units or more "a one time" 9% equity tax.  In addition to that, all investors will have to pay a one month leasing fee to the state for the privilege of leasing a property to tenants in Maryland.  That's in addition to county fees already in place.  @Matthew Paul I grew up in Pasadena, so I'm used to the area, bought my first house in Catonsville 10 years ago and we have several rentals there, so I'm still pretty versed in the market there.  I just don't trust the Peoples Republic of MD.

The other issue we are running into is title companies in MD will hold 9% of gains on real estate sales for out of state investors to make sure you file a return with the state. The only problem with that is that we would like to use our SDIRAs to fund some deals there and I haven't found a CPA yet who can tell me how to prevent 9% being held from the gains going back into my IRA. A CPA in MD told me title companies would still withhold that from the closing and we would have to file a return to get it back, but I'm not sure how an IRA files a return; I need to find a CPA in MD to crack the code.

Thanks for your replies. 

BP,

I have found an REO property I am making an offer on, but I am curious if anyone in MD has experience dealing with Mold mitigation in a Baltimore County Row-home Basement? The property I have found has been sitting for a while and I am slightly concerned that other investors might have passed on this deal due to larger concerns than I am seeing.

The property has a finished basement that needs to be completely gutted due to mold and mildew.  There is a large amount of roof damage from a large tree that is extremely close to the foundation.  I know that most of the water damage is from the attic, I am also concerned about the root structure in the foundation. 

I don't know why, but I'm more concerned with dealing with the State of Maryland than I am about addressing potential foundation or roof issues. 

I know this is not a clear question, but any thoughts please?

Tyler McGarry 405-315-7276 cell or office 405-340-0712

For clarification, the addendum wording specifically says, "The buyer can then have utilities turned on in the selling realtor's name at the buyer's expense."  My realtor said the "selling realtor" is her, and her broker won't allow that.  I don't understand why the bank wouldn't allow me to do it in my name or my companies name.  Sounds strange to me.

BP,

I am making an offer on an REO property and my Agent sent me and addendum stating the bank requires that the Buyer's agent be responsible for turning on the utilities during the property inspection and pay for the expense. The buyer then has to reimburse the agent for doing this. She says this is against her brokers policy and that her office will not be able to submit the offer if this is the case.

Does anyone have any guidance on this situation?

Thanks,

Weird, I had actually sent you a message before this message from you popped up. I haven't been to the OKC REIA meetings in 3 months because Thursday is my Softball night--it's a church team but competitive.

I've never had the joy of being in Clovis, NM but I have flown over it countless times and must have "missed it" in passing.  Give me a shout when you plan to be in OKC again.

Andy