+1 on Bucking Bar's post. Some do not realize that "qualified 401k" savings can be rolled to an IRA (and far above the $6500 per year IRS max) in order to purchase real estate via the Self Directed IRA. A rough estimate is about half of the 401k is qualified, but everyone is different. Buying a rental property for cash, with all proceeds returning to the IRA, and real estate gains over time, protects from stock market fluctuations. As always, dyodd and speak with qualified personnel.

 

Reminds me of a friend who worked summers in high school as a hod carrier (caring a stack of a dozen bricks up a scaffold to a bricklayer.)

He decided his choice to go to college to be an engineer was a wise decision.

 

Agreed, but there are limitations on leverage within an IRA. You either have to be an all cash investor or be in a position to use non-recourse financing and pay UBIT on the leveraged portion. Also in dollar terms, it can be difficult to get enough money into a self directed IRA.

If you are talking about sizable holdings, there may be some advantage to structuring the deal so that gains will fall under a carried interest provision vs pass through income. Don't get advice on this from APC! Also under the new tax code, there are reductions on taxes for pass through income via a K-1 from a Parthership / LLC. I'm not sure if rental income on a 1099-MISC receives the same treatment.

 

Too late to edit the post. It should read UDFI not UBIT, although UBIT could be a factor in either leveraged or all cash real estate within an IRA.

 

Or go for the self directed ROTH IRA and work your way up to a massive portfolio of tax free real estate appreciation and monthly rents rolling in completely tax free...

 

Sounds too good to be true.

 

Market timing is not good. The rebalancing is whenever any given asset allocation in a portfolio exceeds its share of the portfolio by 25%, again spreading risk around instead of allowing it to build up.


Exactly correct.

 

Lady came in for a hammer...

 

Or,

As an alternative, you can blow all this risk off, and make as much or more. I have a side hustle that I work when I want, with no risk, carries no insurance, no dealing with insubordinate personnel, if you want time off take time off, do it at your leisure, and make $70,000 a year.

 

No,


it's not selling Sham Wow or Amway or Mary Kay. This is something you've already been trained and know how to do. As a nominal Captain, making $300/hr, combined with DC of 16%, profit sharing of 16%, let's put it for arguments sake at $400/hr... one day trip $2,000; 2 day trip $4,000, 3 day trip $6,000. No fuss, no muss. Agreed, you may work 3 days flying with people you like drinking beer at places you choose to go. Kona? 3 days? drinking beer? sitting in the sun? swimming with turtles? Tear my arm off and beat me to death with it.

Would I rather make $300 a month on a rental and have 20 of them to deal with, or do something I truly enjoy and gross the same amount?

Oh, wait. I forgot. Please ALPA, protect me from myself. I want to stand on my ladder, and paint my house, and trim my trees or somehow justify fishing at the lake for $2,000 a day. You guys hash it out any way you want.

Passive income is great. I made copious porn films years ago and the passive income of me and John Holmes is extraordinary. But it's not the bidnes for everybody.

Cheers. To each your own. Hope everybody excels at whatever their side business is until the minority convinces others that we need protection from ourselves.

Because isn't that what a union is for? I'm too stupid to understand what I want to do with my own life, and the union needs to protect me from me? Thank you.