All Forum Posts by: Stephen E.

Thank you!

It wold seems a loan function would be the better option and have the most flexibilty. What other soultions would be available that i could pursue for this kind of idea?

@Chris Jensen

I have found that following the Question: "Do you have 15 minutes?". It help me take time to allow for other things and be flexible.  I limit the amount non market building Social Media and place emphasis on building towards dreams and goals. BP is normally part of that.  I also agree with @Mark H. that focusing on a few areas of the forums will help you get the greatest benefit. 

Take a passion, find out why, and convert the dream to a realtity. Make your daily effort or using time to build towards a dream.

From my understanding is the a loan feature is only available if the IRA is loaning to an investment or just a 401K.

A withdrawal would be legal in this situation for an IRA?

What limitations could i expect when using this stategy to do what is listed below? What are the pitfall for each to maintain legal aspects of each?

Goal: Convert uncollateralized personalized bank debt into a debt to that is assumed by the IRA/401K at interest (8-20%) and similar terms thereby creating opportunity for freeing more captial and increasing my ability to retain cashflow into investments at a rate that was being paid out to external institutions. See below for the idea of what i trying to accomplish.

Figures are for example and not representative of true statements or balances.

• Prior to conversion to Checkbook IRA or S401k
• Ex. $100,000 of uncollateralized debt at 20% for 72 months.
  
  • Total payment: $2395.28
  • Interest: $1666.67
  • Principal: $728.61

• Conversion to Checkbook IRA or S401K. Loaned
  • Ex. $100,000 of uncollateralized debt at 10% for 72 months.
  • Total payment: $1753.32
  • Interest: $666.67
  • Principal: $1086.65

Overall increasing saving rate, debt paydown, overall ability to continue investing. Thoughts?

@Carl Fischer

@Dmitriy Fomichenko

I have known about self direct IRA but not Self Directed 401K and 'Checkbook' IRAs. I wanted to take control of my personal debt and let my IRA benefit from the loan but still maintain tax preference.

• What circustances and conditions would i have to follow for this to be legal?
• What kind of reporting is needed for this to maintain a legal status? 
• If this completely illlegal, what areas would this follow under?

Thanks

@Ben Payano If there way to balance the books for your liability and convert it into an asset or break even. Ideas: Could you convert it into a two bed room and rent the rooms for x dollars with in the market. Is there way to partner with another investor(s) in a larger project and convert that into postive cashflow then be able to write the loss off on taxes? Work with your Local REIA or investor group to help find a solution that would help. Purchase something that covers the loss there by negating the negative cash flow. You can sell it but consider all the costs. Mostly, find a way to come back to it longer term since you plans are such but change the equation and make it balance. Don't rush it! Be creative and use you network. One option no one mentioned, could you lease option the property thereby giving the money to cover your loss? You could owner finance or Wrap the mortgage and costs? Sell a portion or you interest of the property and not the whole? What side of the equation do you want to be upon? It might be easier to STR it would a short term and build the fine the HOA would charge you into the rental fees this gives you time to find a longer term solution instead of one that you cannot prepare for

Primary Markets are not dead but declining based upon cost to profit. What about secondary and tertiary markets. Are they still alive and trhiving?

@Leon Li

Mostly, What i have is a few questions that may help you decide or enhance the overall structure 

Lower Rent:

Can your business afford a rent decrease still keep cashflowing the property? Can you accept a higher turnover rate and repairs? Will you be able to average out the losses and gains or take a consistent hit? 

M2M Lease:

@Thomas S.  I think this a great idea when you are not sure or not very familiar with the area. 

Aside: I would be careful for leasing in the Colder regions of the US. There are laws in place for some state that prevent evictions or delay them until after teh cold months have passed. Just be aware and consult your property manager.

Reposition: 

Is there a way to repositon the property to enhance the overall gain of cashflow and still keep the tentant base?   What is the average population to the area and what are the major employers within 10 miles? Could oyu improve the property and then attact a different tenant base? Is your property considered modern or meeting the needs of the local population?

Collections and Credit:

@Matt K. I agree that medical bills are something most of are behind or have to find ways to be creative with payment. Some companies, if you ask, will let you pay late but not report the information. The age of the collection or late report make a huge difference. My standard is after 4 years let the person have a chance if nothing new has been reported. 

You could ask for a higher deposit for the property to allocated for the cost that would be incured for a leasing with a higher turnover.

Overall, Can you sleep at night with the decision that has been made with the property and your business for the short and long term?

Thoughts?

We are hosting a Syndication webinar from Mauricio Rauld of Premier Lawyers. This will be a video based event with questions and networking held after presentation. All are invited to attend and there starting in July meeting fee will be 25 for non-member.

@Brant Garner

Thank you! Would CCIM Institute be  the only location to find those courses