All Forum Posts by: Stephen Grindle

Hi, I recently moved an IRA I have into a Self-Directed account and would like to make a my next real estate purchase soon. I've always dealt with long-term rentals and these assets, although great, are generally long-term and slower producing. SO, I'm looking at some alternative strategies that will do two things for me:

1. Create high cash flow. 

2. Allow me to multiply and scale my business over and over again without having to make additional investments of my own capital.

In other words, I'd like that $100,000 to launch me into a domino effect where I don't have to add additional capital. I'd like to hear how you have or would successfully use $100,000 to multiply returns over and over again. For instance, I know the BRRRR method works for a lot of people, but I'm also looking at ways to partner with others, short-term rentals and any other strategies out there that will set me up to not have to put more of my money in, while continuing to scale my business with the initial investment of $100,000. Any and all thoughts are welcome!

 @Brian Eastman, this is super helpful, especially concerning the STR being at risk of being subject to Unrelated Business Income. I've read a bit about that and I'm still confused about what would create an active tax treatment, but will do more research. Thanks so much for your detailed answer!

 @John Underwood, I understand there are no limits on the amount to rollover. But isn't there a $5500 annual contribution limit for ROTH's if I want to throw more money in AFTER the rollover?

 @Chris Seveney, do you have a tool through excel that can do the kinds of calculations you mentioned in your first point above? 

Hey friends, 

I'm considering using a Self-Directed IRA to invest in a short-term vacation rental. So two questions:

1. Should I transition my current Traditional IRA to a Self-Directed ROTH IRA or keep it as a Self-Directed TRADITIONAL IRA before investing? I understand that a ROTH allows me to have tax-free gains, but I also know that there are limits on how much I can contribute to this vehicle each year. Wondering if others have experience with this?

2. I've read that my Self-Directed IRA can also own an LLC. I understand the legal protection this can provide when purchasing property, but are there any downsides to purchasing property through an LLC owned by my SDIRA?

Thanks for your help!

Hey, 

I recently bought a lot in Joplin, Missouri thinking I'd build a single-family home on it and sell it.  The appraisal came in under what the cost to build would be and I'm now considering selling the lot, moving forward with the build and hold/renting it for a couple of years or building a duplex instead.  I have not actually built anything yet, so the cost to build is based on the lowest bid I've received. Here are the details and I'd love for someone to help me find the best option forward. WHAT WOULD YOU DO IN THIS SCENARIO?

DEAL DETAILS: I can give more details if needed.

All in on property: $195,000 (including purchase of lot, plans, survey and cost to build)

Appraised at: $187,700

Bank will loan me 85% of appraised value, which is: $159,545

I'll have to bring about $35,500 to the deal without the potential of getting that money back when I refinance because the cost to build well exceeds 80% of appraised value.

Potential Rental Income: $1500 (very confident I can get this)

ANALYSIS

I've included a best case scenario Rental Analysis below, and below that are my potential exit strategies as I see it: 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

EXIT STRATEGIES

1. BUILD & HOLD: Build the Single-Family Home I've outlined above and rent for $1500/month.

2. DUPLEX: Build a duplex instead (lot is zoned R2). Problem with this is I'm afraid I'll run into the same problem of not getting a favorable appraisal. 

3. BUILD & SELL: After looking at comps, I'm thinking the most I can sell this house for is $205,000. That is best case scenario. So, I'd net no more than $10,000.

4. SELL LOT: I bought the lot under market value, so I'm thinking one exit strategy is to just cut my losses and sell the lot to recoup my money. 

Thanks a ton, 

Stephen

Hey @Marco Bario, thanks for the response. Yeah, I'm not wanting any equity partners. I already split the partnership I have with 3 other equity partners, so I'm looking at "debt" or "cash" investors who will receive a dividend. 

I'll speak with my attorney about what we need to do to set this up right. I knew it would come to that eventually, just wanted to check here first. Thanks again for your help!

Hey all, my business partners and I want to start inviting passive investors into our deals in order to speed up the process and not have to use banks for all of our funding. A couple of questions related to this: 

1. Does anyone have a sample contract/agreement they can share that they use with their passive investors?

2. What kind of legal processes do we need to set up other than an LLC? (We already have an LLC)

3. Are there limitations on inviting too many investors in to fund a single deal? Basically, do we have to fund one deal with one investor, or can we include several investors on a single deal? 

Thanks!
Stephen Grindle