Tad Borek <borekfm[at]pacbell.net> writes:

- quote -

Well, to be fair, up until a few (4?) years ago, a "conduit" IRA did
have real meaning, since until that change in law, if you commingled
rolled over qualified employer plan monies with annual IRA
contribution monies, you forfeited the ability to roll the rolled-out
money back into a qualified employer plan.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

bo peep wrote:
- quote -


Along with "conduit" and "stretch" these aren't terms in tax law,
they're basically marketing jargon for "IRA you use to hold rollover
money for awhile", "naming beneficiaries to stretch out distributions"
and "buying real estate with your IRA money". For all of them you're
going to be subject to the garden-variety IRA rules, there's nothing
special out there called a "real estate IRA".

-Tad

<<there's really no such thing as a "Real Estate IRA"...>
That's odd - a google search finds hundreds of companies that think
they are *in* the Real Estate IRA business...

http://www.myrealestateira.com

John Cowart

Neither the department of Labor nor the IRS would go for this using a
defined contribution plan.

The crack down on prohibited transactions is one reason.

- quote -

$cott wrote:
- quote -


I don't see any replies to this but...lots of problems with this
suggestion. Even in the unlikely event the OP an create and fund a 401k
plan, there's no way to deposit $350k as a lump sum into a 401k, that's
almost 10X the annual contribution limit. And I've never heard the term
"traditional 401k" so I don't know what you have in mind there.

And there's really no such thing as a "Real Estate IRA"...though a few
people do try to hold real estate within their IRA. I assume that's what
you mean by the term?

-Tad

The information you have provided makes it difficult to ascertain
whether securing a better commercial finance partner would be the "path
of least resistance". If you are willing to share more, I (and
possibly others) could be in a better position to render an opinion.

One possible solution (which is a spinoff of the previous poster's
recommendations) is; 1) Deposit 350K into traditional 401K, 2) Convert
portion of 401K to a Real Estate IRA, 3) Use Real Estate IRA to fund
your real estate construction projects (works if you don't intend to
occupy the property).

Hope this helps.

Regards,

Scott Miller
Commercial and Real Estate Banker/Broker

"I've got money, want's some?"

In article <1133157629.732824.17170[at]g49g2000cwa.googlegroups.com> ,
"mrdenial" <dvance[at]rvi.net> wrote:

- quote -

The plus side of a margin loan is that the rates are normally
pretty good. The downside is if a major correction were to
hit (and it seems to happen pretty often in the past 10 years),
you might get a margin call to repay the loan just when you
need the funds to complete a project. Not being able to complete
the project means no income, and poof...it all goes up in smoke.

I think you would see far less risk overall by putting the
$350K grub stake into a money market mutual fund, and drawing
on it to do your projects, and repaying your fund when you
do a closing. It isn't as glamourous, but it is far safer.
Once you build up excess funds in this account, then move
those into retirement and mutual fund accounts as needed.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Hi,

I'm currently building houses and funding it by borrowing money from a
local bank. It costs me about 7k in loan fees and closing costs and
another 7k in interest for each house. I'm trying to find another way
to fund my houses. Soon, I'll have about $350,000 in cash that I can
deal with. I'm thinking that I could margin the account and use 175k
towards one of the houses to reduce the fees that I'm paying my bank.
Does it seem like there is a problem with this? Is there a better way
to self fund my building projects.

The reason that I was thinking mutual funds is that my account could
grow with the market and hopefully increase in value enough to more
than cover the loan fee I'm paying on the margin account. After the
house is sold, I can pay back the mutal fund account and fund it with
further profits. I could then loan myself more money for the next
project.

Of course, I could put the money in a bank account and have access to
all of it.

Thanks for your input.

-Dan