Forum Replies Created
Hi there,
I have Rick’s Course. I also have many U.S. courses. Drop us a line at [email protected] and I’ll gladly chat about Lease Options. I am familiar with both the U.S. model and it’s Aussie counterpart. IMHO both Rick Otton and Steve McKnight are pioneers in this country in regards to creative real estate investing.
Best Regards,
Reggie Van Der Werff
[email protected]Thanks Michael,
I live in Cairns, which is in Queensland. If you don’t know anyone in this neck of the woods, perhaps you could refer me to someone in Melbourne I could use or ask for a referral.
Best wishes,
Reg.
Thanks guys for all the info.
For an USA IRA or RRSP to buy an investment property as an entity, and rent it out for income, it can not favour the IRA holder in any way or their relatives.
See the 24 steps an IRA can buy property below.
24 Steps to Successful Tax-Deferred and Tax-Free Investing in Real Estate
1. You elect to obtain the best tax advantage from results of your real estate investment activity.
2. You compare the various tax-advantaged alternatives and decide which works best for you.
Among these are:
– Personal purchase and obtain various standard write-offs such as out of pocket expenses associated with the investment and depreciation.
– Use of Your and Other People’s IRAs (OPI) or qualified plans to make the investment you wish.
– You review the possibility of Tax-Deferred Exchanges as a possible strategy for your real estate investments.
– You review the possibilities of using the Home Owners Exemption as an investment and tax-free strategy for income.
– You seek the assistance of financial planner, accountant, and attorney to help guide you in the decision-making process.
– If you decide to use a retirement plan vehicle to fund your transaction, you continue with the steps below.
If not, keep reading the following chapters in this book (Hugh Bromma, How to Invest In Real Estate & Pay Little or No Taxes, McGraw – Hill Publishers) and then decide!3. You decide to’ use your IRA Or 401(k)and or OPI and other 401(k)s, or other qualified plan.
4. You decide what type of property that is permitted in the retirement plan.
5. You’d review the Prohibited Transaction Rules carefully so that you know that you will not self-deal or accidentally cause your IRA or Qualified plan to become disqualified.
6. You establish a budget concerning what you can spend. You can include personal funds under the right circumstances, as well as Other People’s Money (OPM), and debt financed on a non-recourse lender (not easy to find).
7. If you are going alone, make sure that you have sufficient cash in your account to meet all expenses and a contingency fund.
8. If you will be having partners, be sure that you are all in agreement regarding Purchase and Sale Objectives. Define exit strategies for all concerned.
9. If you will be using a lender to debt finance your plan’s purchase, non-recourse lenders are not always easy to find. Find one first explaining to them that your plan is doing the borrowing, and that you will not be guaranteeing the debt.
Remember, carry back plans are permitted, where the seller finances your acquisition. Any non-disqualified person may do so. If borrowing is not an alternative, or too expensive, rethink your plan, or find other partners.10. Find a trustee or administrator/custodian close to you who sponsors and services self-directed IRAs and/or qualified plans.
11. Begin the Opening Account Process. Opening the account takes about 20 minutes; transferring or rolling over funds and other assets generally may take from two to four weeks. Plan accordingly. Make sure your partners and any financing is lined up solidly, and any retirement accounts are self-directed and in place.
12. You begin shopping for investment property that meets your and, if you have partners, their investment objectives.
13. Locate the property and write a sale & purchase contract in your name for the benefit of your IRA or plan along with others participating with you.
14. Complete a Buy Direction Letter, which you send or fax to your trustee or local administrator, which establishes the parameters of the purchase.
15. Inform the title company, escrow company, and/or attorney you will be using to call your trustee or administrator. Provide them with the documentation needed to complete the purchase.
16. You will need to read and approve all documents involved in the purchase transaction. Don’t skip any. In about 20 percent of purchases and sales, there is something wrong with documents, particularly settlement statements. Your trustee or administrator will sign all documents on behalf of your IRA or plan.
17. Your trustee or administrator will compare all documents to each other to ensure that your instructions and the purchase comport with each other. If changes are required you will need to ensure that your goals and objectives are met.
18. If property is rented, be sure that the assignment of any leases or rental agreements will be made at the time of closing.
19. If you are funding a note secured by real property, ensure that you have the payer’s address and social security number for proper IRS reporting.
20. For debt financing of real estate, the lender will be paid from your IRA or plan account. Any invoices or payment books need to be sent to the trustee or administrator of your IRA. In the case of an Individual (k) Account, where you are the trustee, you will be making payments from the trust’s account.
21. All income from the investment will be credited to your trust account. All expenses, such as utilities, maintenance, etc., will be made from the same account.
22. You may hire a non-disqualified entity to service your properties. That entity can provide all income, expenses, and other services to your IRA or plan and send the net proceeds to your account.
23. If you decide to sell the property, or sell your interest in it, you will be completing a Sell Direction Letter when you have found a buyer. The terms and conditions of the sale will be compared to the purchase contract you have completed.
24. The proceeds of the sale must come to/be deposited in your plan. You will then be able to make your next real estate transaction with the proceeds.
I’m trying to do a similar thing with Self Managed Superannuation Funds here in Australia.
Otherwise, instead of using DIY Super Funds it has been my thinking, JV, shares in a project, guaranteeing a minimum rate of return, say 3% per month of use of money, with minimum rate of return of 10% simple interest. Like a limited partnership, but not a syndicatication (too complex).
Any thoughts?
Regards,
Reggie Van Der Werff
[email protected]Thanks Terry, [biggrin]
YOU’RE A LIFESAVER!!!
Kind Regards,
Reg.
