馃攳
How to Buy Your First Rental Property in an IRA | Mark J Kohler | CPA | Attorney - YouTube
Channel: Mark J Kohler
[5]
Hi mark Kohler here with another tax and
[10]
legal tip let's talk about how to buy
[12]
your first rental property inside your
[14]
IRA I know this is exciting to many of
[17]
you that maybe just searching here on
[19]
YouTube enough you know falling on my
[21]
channel
[21]
others of you that have been following
[23]
me for years you may know where I'm
[25]
going with this and this is just a
[26]
review but bottom line is buying real
[29]
estate in your IRA as possible
[31]
people have been doing it for years and
[33]
it's an extremely powerful tool and
[35]
don't let anybody tell you well because
[37]
you don't get the tax benefits of it you
[39]
should just buy real estate in your own
[41]
name and definitely not put real estate
[43]
in your IRA I completely disagree when
[46]
you're deciding what you should put in
[47]
your IRA the question should be what is
[50]
it what can I put in there to get the
[52]
best rate of return the best rate of
[54]
return and you should have a balanced I
[56]
want you to put money in real estate
[58]
investments in your own name as well as
[61]
inside your IRA or 401k your separate
[63]
simple but when someone says oh real
[65]
estate should never be in an IRA let's
[67]
talk let's argue about because i think
[70]
that real estate is provides a wonderful
[73]
rate of return and it should be inside
[75]
some level or degree inside your IRAs
[79]
and 401ks and tax preferred vehicles
[82]
there's nothing wrong with that look at
[83]
the net rate of return
[85]
so with that stated let's go through
[87]
some quick steps of how to get your
[89]
first rental property in your IRA number
[91]
one you've got to get IRA money to a
[94]
self-directed custodian now in the Wall
[98]
Street world you would call this a
[99]
stockbroker or a brokerage account but
[102]
in the IRA world we call it a custodian
[105]
now the 401k conversation that's one for
[108]
another video or another day let's just
[110]
talk about IRS for a minute now you may
[112]
have an old 401k that got rolled out to
[114]
an IRA
[115]
well let's take that IRA and put it into
[117]
a custodians account i know you may put
[121]
new money in an IRA but it may not
[123]
enough to go out and buy a piece of real
[125]
estate but if you have old IRA money and
[127]
old 401k money
[129]
step one is let's get that money to a
[131]
self-directed custodian and we work with
[133]
custodians all over the country we can
[135]
give you a list of some great ones to
[136]
interview or look at their website and
[138]
find the custodian that fits your style
[140]
but these custodians are just going to
[142]
hold the money until you calm on day two
[145]
and say I'm ready to invest so get that
[147]
money to a custodian step one step two
[150]
we need to decide what we're going to
[153]
buy because it's going to dictate what
[156]
type of vehicle we're going to use so
[158]
let me repeat that make a decision on
[160]
what the investment within the real
[162]
estate industry is going to be I mean it
[165]
could be a single-family home it could
[166]
be a mobile home it could be a
[168]
commercial building a building it could
[170]
even be the process of doing some
[172]
rehabbing or fix and flips it could be
[174]
wholesaling I don't know and that's
[176]
gonna really dictate what type of
[178]
structure you're going to invest it
[181]
don't think that it's all i'm just going
[182]
to use a trust or use an LLC and I'm
[184]
done and home be careful number to
[187]
decide what type of real estate you're
[189]
going to be embarking on and be clear
[191]
about that
[192]
I don't be Harry Carey be quite clear on
[195]
that investment strategy because it's
[197]
going to dictate the next structure
[198]
number three
[200]
of course this video's about rental
[202]
property and assuming you're going to
[204]
buy a rental property so what we need to
[207]
do is step in step 3 is set up an LLC
[209]
now this is going to be an LLC limited
[212]
liability company set up in the state
[215]
where you're going to buy real estate
[216]
not in Nevada not in Wyoming New Mexico
[220]
or Alaska some sexy sales pitch that
[223]
you're going to get from some non law
[224]
firm or heaven forbid you go to legal to
[226]
even try to make this happen and
[228]
custodians are going to go for that this
[230]
has to be a well-crafted limited
[231]
liability company operating agreement
[233]
that has ERISA and IRS provisions and
[236]
you should pay more than 1,500 bucks to
[239]
get an LLC to hold real estate owned by
[243]
your IRA CA IRA is going to hold the LLC
[246]
and the LLC is going to hold the real
[247]
estate and so you want to be
[250]
working with a company that can help
[252]
guide you through the process i'll offer
[254]
because this is really over
[256]
we've been doing this for over 15 years
[258]
helping clients setup llc's to own real
[260]
estate we could do it as affordably as a
[262]
hundred bucks filing fear may be a
[265]
registered agent fee but eight hundred
[266]
dollars is the core feet to get a single
[268]
member LLC set up now
[270]
shop around this is an infomercial but
[272]
it's to let you know that a real law
[274]
firm helping clients nationwide can be
[276]
affordable
[277]
now this LLC again is going to be in the
[279]
state where you're going to own that
[282]
real estate that's point number one now
[284]
you might register a foreign back in
[286]
your own state if you're in California
[288]
that's a typical problem because
[290]
California's going to want your register
[292]
in their state even if it's in it a
[293]
George LLC with Georgia property you
[296]
have to register for in California and
[297]
pay their darn eight-hundred-dollar
[299]
minimum tax which sucks i know but the
[301]
LA but the LLC is critical to hold the
[305]
real estate hold the checkbook to buy
[307]
that rental property next I want to talk
[309]
about the acquisition of the real estate
[312]
in the management LLC for a moment now
[314]
that this is an important step in
[317]
managing LLC that we talk about what
[320]
those limitations are now this of course
[323]
could be a much longer video and my
[324]
partner Matt Sorenson has written an
[326]
incredible book called the self-directed
[328]
IRA handbook
[330]
this is a chapter in my newest book the
[332]
tax illegal playbook and we've got all
[334]
sorts of videos on our website and
[336]
support and when you set up an LLC with
[337]
our law firm we go through all the
[339]
details and it's included in the set up
[341]
and you talk to a real lawyer now with
[343]
all that said again let's hit a couple
[345]
highlights and that is this LLC which is
[348]
going to have a checkbook you could be
[350]
the manager of that LLC you can be the
[352]
cider of that checkbook
[353]
that's ok if your custodian says you
[355]
can't you've got the wrong stony that's
[358]
their rule that's not the IRS or risks
[360]
rule and we've been studying this and
[362]
doing llc's for over 15 years helping
[365]
clients do this we are experts in this
[367]
and we stand behind our LLC's and if you
[369]
get on and there's a penalty we pay
[371]
that's why we care about practice
[372]
insurance so we notice custodians have
[375]
their own internal guidelines the law
[377]
firm is representing you to design your
[379]
LS
[380]
seat so you can manage that LLC you can
[383]
buy real estate you can control the
[384]
checkbook but you cannot provide sweat
[387]
equity you can't go out there work on
[389]
the rental property you need to have a
[390]
third-party manage the room rental real
[392]
estate you also have to use a realtor
[394]
can't be yourself
[395]
so you've got to be cautious on the
[397]
acquisition and we guide you through
[400]
those rules but you can manage that LLC
[402]
so once you've got your LLC funded
[404]
you're out there you got the checkbook
[406]
you would write an offer to go buy a
[409]
piece of real estate and start to go
[412]
through the closing process now you
[414]
cannot cosign on the loan or use your
[416]
credit to get that loan you have to use
[418]
a non-recourse loan but it's can be
[420]
exciting and you don't have to buy real
[423]
estate for cash you can pool your money
[425]
with other people and and to leverage
[428]
your money in a sense with other
[429]
partners or you can get a non-recourse
[431]
loan banks will loan you money usually
[433]
about sixty cents on the dollar when you
[435]
put forty percent down and keep it some
[437]
sort of reserved very common so it can
[440]
be exciting
[441]
that's that step in the process of
[443]
managing the LLC now finally let's talk
[446]
about annual maintenance and again
[448]
except previously this is a big topic
[451]
and I'm just trying to get the
[452]
highlights but once you have this LLC
[454]
set up in your buying real estate you
[456]
may need to file a tax return annually
[458]
there's taxes that could occur called
[461]
unrelated debt-financed income and if
[463]
you're flipping properties not Reynolds
[466]
but I want to throw it out there there's
[467]
this you BTW i tax or unrelated business
[470]
income tax or taxable income you're
[473]
going to want to learn about these
[474]
things this is why you're going to get
[475]
some additional study and consultation
[477]
and books to help you through the
[479]
process and we'll be there as well as
[480]
your attorney but it can be very
[483]
low-maintenance maybe a tech annual tax
[486]
return an annual evaluation to give your
[488]
custodian but you shouldn't have to
[490]
stress about the process people have
[492]
been doing this for over 30 years
[494]
it's very common and it's certainly
[496]
legal so for someone said you can't do
[499]
it it's not that you can't do it its
[501]
maybe that they can't do it because
[503]
they're your stockbroker or their
[505]
custodian rules don't allow for it but
[508]
get a law firm behind you if it's not a
[510]
law firm that's when get someone else
[512]
to write you a comfort letter and give
[514]
you guidelines so they can stand behind
[516]
and help you set this up and then
[518]
maintain it for many years to come
[521]
bottom line get out there invest with
[523]
your ira investing what you know best
[525]
and i think having rental property in
[526]
your own name and your own LLC is owned
[528]
by your trust and having rental property
[531]
in your IRA and the owners LLC's and
[533]
you're out there getting a better rate
[535]
of return in your IRA I think it's
[536]
fantastic have both buckets going
[539]
don't be afraid of rental property
[541]
inside your IRA you can do it
[542]
give us a call with up to help thanks
[545]
for watching and if you found that
[546]
helpful powerful interesting exciting i
[548]
did i've got so much more to share with
[551]
you i have a whole video series on how
[554]
to start small business eight steps
[556]
almost 40 videos 99 bucks simple easy
[559]
you can start watching it right now and
[561]
get the steps going to get your business
[563]
off the ground and every time I shoot a
[565]
new video you get a copy of it it's all
[568]
included in your membership site for
[569]
lifetime access i guess my lifetime
[571]
anyway you're going to love it
[573]
check it out also I want to challenge
[574]
you to subscribe to my youtube channel i
[577]
shoot videos every week got a blog and
[579]
social media tips and a newsletter every
[582]
week so much there and you can check it
[584]
all out at my youtube channel so please
[585]
subscribe and i hope to see on the
[587]
backside
Most Recent Videos:
You can go back to the homepage right here: Homepage