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I have access to some SDIRA money. Anyone on here care to share some success stories with their SDIRA activities?
I feel like the best things to do are buy/sell notes or accumulate options in my Roth, but curious to know if anyone has actually taken title to real estate in theirs. There are less tax advantages, so I’ve been hesitant to do this. I have a friend who has nearly 10 free-and-clear houses out of his.
Otherwise, I know the option to do private lending is there too.
Buying real estate commissions at a discount before the closing has a quick turn around with a very high yield and there are always realtors who would be willing to take a discount to get their money now.
Options are a great way to grow your IRA/Roth.
As far as owning real estate in an IRA..
It’s really better to get an option on a house (or shares or an LLC that owns the house) with your SDIRA than to own the house outright in your SDIRA. You would not want little slip and fall lawsuit to put your whole IRA at risks.
I honestly don’t like IRA’s or Roths because of all the restrictions on what you can and cannot invest in. But I inherited one last away last year so I need to put it to work.
Would anyone be interested in learning about how you can have checkbook control of your IRA using a Trust (not an LLC)?
Very interesting about the real estate commissions. I hadn’t thought too many realtors actually carried notes for commissions these days, but have no data to back that perception up. I guess these notes are secured by a 2nd on the property?
Curious how you’d market to them. I’m not sure how you find them, so would you send a non-targeted email blast? Facebook with a landing page?
The checkbook control trust idea is of interest. I have a checkbook control LLC at the moment.
HI Bill
No, it is not that the agent takes a note for their commission, it is you buying their commission that will be paid in a month or two
Example:
Agent is getting a $15,000 commission end of March
but they are desperate for the $ now.
You offer to buy their future commission for $10,000 on February 15th.There is language in the agreement about what happens if the deal does not close.
Oh…yeah, totally didn’t get that. Very interesting concept! Probably great in the Winter months when things don’t move very fast for them.
My question is: how would you secure that note? I get that their could be language in the contract, but would you think about securing it with a mortgage on some property that they own?
Cool idea!
Here are some more ideas
To secure the commission, you’re put a lien against the property that is closing. Make sure the title company has a copy of the lien too. Your FULL commission would be paid at closing.
Even in Austin and Dallas where houses are selling in a few days, there are agents who can’t wait to get their commission. You could make a presentation at their weekly sales meeting or deliver flyers to offices explaining that you’ll buy their commission once the buyer is approved for financing and well before closing.
Title companies may know agents who would be interested in this offer too.
One thing I may try is the “Discount Buy-Back” note thing. This is talked about in Jack’s Options Mini-Seminar.
So someone has a note that’s performing and has a reasonably attractive interest rate (e.g. not like 3%). They need cash in the short-term, but don’t want to part with the note long-term. You buy the note for 50% of the unpaid balance and give them a buy-back option for the unpaid balance sometime in the future. Probably you specify a minimum term that you are willing to hold the note for to make it worth your while. Your yield is twice the interest rate. So if you bought a note that had a face value of $100,000 at 8%, you pay $50,000 and yield 16% for your money. Perfect for your Roth IRA.
Anyone tried this?
I’m assuming it works just like buying a partial in terms of the required paperwork, except with the addition of the buy-back option.
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