Posted on February 5, 2010 @ 2:09 pm - Written by BawldGuy
What a way to enter the weekend. Brian Brady is a mortgage broker for whom I hold the utmost respect. I’ll go further, saying he’s one of the 2-3 most knowledgeable mortgage guys I’ve ever met in person. I’ve met a few in my 40+ years on the job. 
A coup for me today, as Brian has not only agreed to be the go-to guy for my clients’ Self-Directed IRA real estate purchases, he’s also agreed to become a BawldGuy Talking contributor. The rest of this weekend is icing.
Brian is approved to make these loans in all the states still on ‘the list’. At this point i think there are about four states where those loans are virtually impossible to obtain. The good news? They love Texas — and for the same reasons I’ve been yelllin’ from the mountain top about for a few years now. California? They require 50% down here. Turns out I’m not the Lone Ranger after all. Investing here in the Golden State can be very profitable, but pretty much for those with very large stacks of gold. (More on that soon. Hint, hint.)
Brian will begin contributing here shortly — and regularly. He’ll be talkin’ about what goes into the loan process when acquiring investment property through your self-directed plan. You’re gonna love this guy. A couple three years ago he did for me from California what Texas lenders said couldn’t be done — and in their own backyard. It was big time fun to watch in real time as a fly on the wall. Talk about being schooled.
You can contact me at 619 889-7100. Have a good weekend.
Posted on January 28, 2010 @ 6:00 pm - Written by BawldGuy
Many aren’t aware of the new rule allowing conversion to a Roth IRA from a traditional IRA. — regardless of either your income tax filing status or your income. Income? Yeah, those makin’ over $100,000 annually used to be restricted from creating Roths. That rule has now been eliminated for good. It became effective the first of the year. You’ll be happy to learn it also allows you to spread the conversion’s tax hit over three years — AND — you’ll be able to skip 2010 totally. This makes it possible to split the tax between 2011 and 2012. This tax split is only available this year. As you might imagine, this bundle of carrots offered to taxpayers has generated a buncha IRA owners to dive into the conversion pool.
Here’re a few other facts you should know about converting to a Roth IRA Read the rest of this entry »
Posted on January 16, 2010 @ 10:14 am - Written by BawldGuy
Had the best conversation of the young year yesterday. Spoke with the CPA who’ll be comin’ on board as a regular, though time limited contributor. (Tax season = weekly posts…NOT) Anywho, among other subjects, we spent a half hour cussin’ and discussin’ the acquisition of real estate through the various available self-directed retirement plans (IRA/401 ’solo’/Sep/Roth) and the various strategies I’d planned on discussing at great length.
We agreed there’s much misinformation and plain bad info out there. For example, some think real estate inside an IRA etc., will be taxed — not true. Even some ‘expert’ websites word their blurbs on the topic in ways ripe for either incorrect inferences by readers, or maddening ambiguity designed to protect the authors, only serving to confuse. Read the rest of this entry »
Posted on January 14, 2010 @ 6:26 pm - Written by BawldGuy
Consider this the first of what will no doubt be an ongoing theme of posts on Self Directed IRAs/401Ks — along with acquisition of real estate using them as a tax deferred vehicle. Large numbers of folk are now either doing it already, have been doing it, or are askin’ about it. Why? You know the answer to that — fear of not only more Wall Street losses, but the desire for two things. They want more stability, and cash on cash returns of more than .4% on their capital.
Let’s start with the answers to a few basic questions. As time passes, I’ll be drillin’ down to more and more detail. Before long, you’ll have a fairly decent grasp of at least what’s possible, the nuts ‘n bolts of how, and what might make sense — or not — for you. Let’s get started. Read the rest of this entry »
Posted on January 6, 2010 @ 8:01 pm - Written by BawldGuy
Short and sweet tonight. Been recovering from the whole revenge of the sinuses thing.
If you have a 401k from a previous employer, it’s probably convertible to what’s known as a Self-Directed IRA. This would not entail taxes or penalties, and can be done relatively simply and quickly, especially with the help to which I can point you.
Why would you wanna do this? Simple — you’d be in virtually total control of your funds, which would allow you to acquire, if you were so inclined, well located cash flowing real estate. I can turn you on to a lender specializing in such loans.
Speaking of said loans, that’s even more good news. They’re what’s known as non-recourse — which means the lender can’t go after your plan or you if things go to hell in a hand basket. Furthermore, they’re barred by federal law from requiring a personal guarantee. It’s the best of all worlds.
You can use the strategy I wrote about yesterday. Or, much mo betta, you can use your Roth IRA if you have one, which will be just about golden when using last night’s strategy.
OK, that’s it — short and sweet. To talk with me, call 619 889-7100. Have a good one.
Posted on January 5, 2010 @ 5:19 pm - Written by BawldGuy
Lost a ton in your 401k at work? Most show about 35-45% losses from their peak. Man, that hurts just to write it. Here’s a way you can very safely and prudently build a basket of retirement income without bankin’ on any appreciation. I promise — you can do it.
Here’s an example, using real properties recently purchased by real clients. I’m gonna modify some of the numbers, but the modifications will not in any way make the bottom line better by an inch. (Worse in fact.)
What if you paid $245,000 apiece for four properties, each with an annual gross scheduled income of $28,800. The renters sign year long leases, and tend to stay a little longer than two years. We’ll set the operating expenses and vacancies at just under 40% — $10,950 a year. This results, when using currently available loans, in a negligible cash flow of less than $250 monthly — essentially a break even. Read the rest of this entry »
Posted on December 23, 2009 @ 7:12 pm - Written by BawldGuy
Over the years, especially when the cycle has reached it’s predictable low point, the so-called experts come outa the woodwork, giving advice that frankly, makes my blood boil. I’m not anyone’s judge, nor will I do that on these pages. I will, however, point out an example of how bad advice can hurt innocent people who rely on the experience and expertise of those who simply don’t possess either.
Sound harsh?
One of the topics these folks talk about so recklessly is how real estate investors (Homebuyers too for that matter.) can buy properties ’subject to’ the existing financing. Sounds pretty innocuous doesn’t it? You’ll just march right in, put yer money down, close the escrow and start makin’ payments on the seller’s old loans. Sounds simple enough to me — not. Read the rest of this entry »
Posted on December 22, 2009 @ 10:51 am - Written by BawldGuy
This is a long post — it should be. Follow the progression and the numbers closely. At some point you’ll be reminded of someone in your past (present?) who followed Grandpa’s strategy and is now locked into their own life sentence.
There are many schools of thought when it comes to investing in real estate for retirement. Two of them dominate.
One says you buy property and hold it forever. When you’ve saved up enough to buy another one you do — and hold IT forever. The idea is you allow rental income to pay off debt as quickly as possible, arriving at the point of a free and clear cash flow machine. Do this more than once and you have the basis for a nice retirement income stream. Or so the story goes.
The other says cash flow comes from the yield on either capital or equity in an asset. The larger the capital amount or equity in the asset, the larger the income in terms of dollars. The ‘yield’ itself is expressed in terms of a percentage. For example, 8%. This school says that since the yield is the same, more or less, for a larger figure or a smaller figure, why not arrive at retirement with the largest amount of capital and/or equity possible?
The ‘Buy & Hold’ school (BHS) gets you there. But in what condition, and how much cash flow relative to the ‘Capital Growth First’ school (CGF)?
Buy and Hold Read the rest of this entry »