Posted by Paul on November 07, 2000 at 23:18:20:
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investing techniques - Posted by AB
Posted by AB on November 07, 2000 at 21:57:01:
I would like feedback about creating an investment vehicle to purchase homes for the purpose renovating and reselling at a high profit. Is it feasible to obtain financing from people who would withdraw money from their IRA’s for a promised return (tax free) so that I could play “developer” without having to lay out a lot of cash? I welcome any comments or suggestions.
Re: investing techniques - Posted by JPiper
Posted by JPiper on November 08, 2000 at 01:16:05:
This idea has been around a long time. The investor loans funds held in an IRA secured by a deed of trust. The return is either tax-deferred or tax free depending on the IRA, a clear advantage to the investor. Obviously the investor needs to have a self-directed IRA.
The cautionary note here would be that you don’t want to run afoul of security laws as your promote this idea. Talk to an attorney about your plan, to include the marketing of it.
Other problems are that the size of the investment may not fit everyone’s IRA, or appetite for risk…and there is a risk with rehabs…especially with a guy who has a limited track record and no money in the deal. These may be issues with people who have sizeable funds to invest, and possibly some sophistication.
JPiper
Re: investing techniques - Posted by Lynn
Posted by Lynn on November 08, 2000 at 24:03:48:
I personally think that you have a great idea as long as you protect you lenders with low LTV loans and you pay them strong returns (just like other hard money lenders demand).
Drawing the money out of their IRA would not be a great idea because of the penalty from the IRS, but if you have lenders who transfer their IRA funds into a self-directed IRA then they could lend the money to you and profit either tax deferred or tax free.
If you protect them with say 50% LTV loans then it would be tough for them to lose.
Check out http://www.mid-ohio-securities.com/ for more information on self directed IRAs
Happy Investing!
Lynn
Re: investing techniques - Posted by Ed Garcia
Posted by Ed Garcia on November 07, 2000 at 22:19:07:
AB,
You’re a thing of beauty. Let me get this straight. You want people to put up their IRA’s, their life savings, so you can PLAY developer, at their expense and put no money up yourself. Close your shirt, your hearts falling out.
Ed Garcia
Re: investing techniques - Posted by Bill Gatten
Posted by Bill Gatten on November 10, 2000 at 19:01:14:
Ed,
Maybe there’s something here that doesn’t meet the untrained eye, but it actually sounds reasonable (or at least ?pretty good?) to me. However, the real question is: Why so vituperative, Mr. G.? What’s wrong with the idea, if he can protect his investors with good loans and stay right with securities and exchange commission regs?
Are you taking those nay-saying pills again? I used to take those until I discovered Viagra. Boy! What a difference…I don’t have to honk my horn to round blind corners anymore.
Bill (Your ?friend? Bill?remember?)
Re: investing techniques - Posted by Joel
Posted by Joel on November 08, 2000 at 13:49:58:
Ed,
People like this AB clown are a dime a dozen. I believe he hasn’t the brains, or ambition to con people out of their hard earned money. The funny part is there is always some like GIO who wants to get in on the little game too.
Thanks for running a clean and incredibly intereting site.
Joel
Ah… Ed - Posted by AB
Posted by AB on November 07, 2000 at 22:41:42:
Yo bud! That’s the way I do this biz.
You don’t like it… Don’t loan to me then. Theres a lot of old folks that got cash ya see, and I’ll get it.
Whos laughin now Garcia? HA HA HA!!!
AB
Re: Ah… Ed - Posted by GIO
Posted by GIO on November 08, 2000 at 24:07:05:
AB,
i spoke to a guy once who told me he has some peoples IRA money available to him, but he obtained these contacts through referrals.
Please Tell me briefly how you have managed to obtain these contacts and what do you offer them, how much do you have at your disposal.
thx
gio