Dock David Treece
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Thanks for your question. If you have a problem closing on a property because your loan doesn’t fund, the seller doesn’t get to keep your down payment. However, the seller may be entitled to keep any deposit that you put down on the property when you signed your purchase contract.
If this has happened to you, you may want to consider taking out a hard money loan so that you can close on your deal until you arrange more conventional financing. You can find out more about hard money loans here: https://fitsmallbusiness.com/hard-money-loan/
If you’d like to determine how much equity you have in your house, the first step is probably to get an appraisal. Your appraisal will set the value of the house. You can then deduct the balance of any mortgage you owe on the property. The resulting number will be your equity in the property. If you have more than 30 – 40% equity in your property, you may want to consider doing take-out financing to take some cash out of your current property. These funds can then be used for buying and flipping homes.
For more information on doing take-out financing on a property, be sure to check out our ultimate guide here: https://fitsmallbusiness.com/cash-out-refinance-guide/
Hope this helps,
Hello Dr. Khaled,
Based on the situation you’ve described, it may be difficult for you to secure a loan or other funding for your business. If you want to secure funding for a US business, it’s typically helpful to have assets in the US that lenders can lend against – this helps them to feel more confident in their ability to collect on your loan if you default. You may be able to find equity funding for your company more easily, but this would still be much easier if you had assets in the US, earnings from US companies, or registered intellectual property (e.g. a patent) in the US. Without any of these, you’ll likely have a hard time securing funding for your new venture.
Hope this helps,
Thanks for your question.
First, let’s clear up a quick item on Solo 401ks. If you already have assets in a 401k, you can certainly roll those funds into a Solo 401k or Self-Directed IRA. When you say that you’re a day trader and don’t qualify for a Solo 401k, understand that you only need earned income to to make new contributions to a 401k. You can roll assets in a previous employer’s retirement plan into a self-directed account whenever you want.
To answer your additional questions:
1. No, you don’t have to roll over the full balance of a retirement plan into a self-directed account. For more information, check out our article on Rollover IRAs here: https://fitsmallbusiness.com/rollover-ira/
2. Yes, you can invest in multiple LLCs through your self-directed IRA. Each LLC would just be a portfolio holding, similar to different stocks in a traditional IRA. For more information, visit our ultimate guide to self-directed IRAs here: https://fitsmallbusiness.com/self-directed-ira/
3. Yes, you can absolutely invest some of the funds in your account in the stock market. However, the best way for you to do this may not be through a self-directed IRA custodian – many of these companies have specialized offerings and charge higher fees for their services. You may be able to invest much more cost-effectively by rolling part of your account over to a traditional brokerage firm like E-Trade or TD Ameritrade.
Hope this helps. Best of luck with your investing.
Thanks for your question. Unfortunately, this is a relatively common maneuver that a lot of business owners try to use to avoid funding contributions for employees, so it’s become a pretty big red flag for the IRS. To answer your question directly, no – based on what you’ve described you could probably not have SEP for your holding company without offering the SEP to employees of your subsidiaries. In the situation you’ve described, with you and your wife owning the subsidiary companies, the IRS likely treats these as disregarded entities. Essentially, you have one company that has compartmentalized liability for different operations. However, if you set up a SEP for one of your companies, you would probably need to offer your SEP to employees of any companies under common control.
Hope this helps. If you want more information on SEPs and some common alternative types of retirement plans used instead of SEPs, be sure to check out our ultimate guide here: https://fitsmallbusiness.com/sep-ira-rules/
The first thing you would need to know to get an answer to your question is prime rate. You can find out more about prime rate here: https://fitsmallbusiness.com/what-is-prime-rate-formula/. The rate is currently 5.00%, so let’s assume for this example that you’re investing $100,000 at 15% (prime + 10) for 5 years. Based on the situation you’ve outlined, your investment proceeds should look something like this:
Year 0: -$100,000 initial investment
Year 1: $19,000 interest payment
Year 2: $19,000 interest payment
Year 3: $19,000 interest payment
Year 4: $19,000 interest payment
Year 5: $19,000 interest payment
Based on this example, your ROI would be approximately 95%. This would equal your total interest payments ($19,000 x 5) divided by your initial investment of $100,000.
If we’ve misunderstood the intended structure of your investment, please feel free to provide additional information in this thread and we’ll provide a more detailed response.
Hope this helps!
Based on the model you’ve outlined above it sounds like SBA loans may not be the best route for you to go. SBA loans are typically used for longer-term investments and it sounds like your plan is more to fix-and-flip homes for accessibility. SBA loans can be expensive and time-consuming to secure, so this may not work for shorter-term opportunities that are common in real estate.
If you’re looking for other options, I would strongly suggest you check out some of our fix-and-flip lenders. These lenders tend to fund quickly and have minimal credit requirements to qualify. We have a great article on fix-and-flip lenders that you can check out here: https://fitsmallbusiness.com/fix-and-flip-loans/
One thing you should keep in mind is that most lenders who will finance deals like those you’re discussing will require you to have 20 – 40% equity in the project. Moreover, lenders with minimum equity requirements will typically require that your equity come in first – they’ll just withhold part of the loan for you to draw on for renovation expenses.
Hope this helps. Best of luck with your venture.
Thanks for your question. You are welcome to post a link to any of the tools on our website. If you embed a calculator rather than linking, we ask that you provide an attribution to our site so that users can visit us and learn more about how the calculator works and how to read their results.
Hope this helps,
Thanks for the question. Based on our research, some of the industries that are typically associated with “safer” SIC classifications include the following:
Obviously, these can vary on a case-by-case basis. While SIC codes can impact your business credit score, they aren’t the only factor in determining whether you qualify for financing. For more information on how SIC classifications can impact your business credit, be sure to check out our article here: https://fitsmallbusiness.com/business-credit-report/
Hope this helps,
Thanks for your question. Based on the situation you’ve described, your fiance may be able to qualify for a business loan on his own. For some potential providers, you may want to check out our list of the best fast business loans here: https://fitsmallbusiness.com/fast-business-loans/ OnDeck’s term loan sounds like it may be a good fit
However, based on the situation you’ve described, it’s worth noting that you could probably apply for a traditional bank loan or other credit financing facility as joint applicants. This would require you to co-sign on the loan and would involve a hard credit check for you as well as your fiance. Our understanding is that Ohio has a homestead exemption for owner-occupied single-family homes, so even if you defaulted on your business loan it’s unlikely that you would lose your home. Before moving forward, you may want to confirm this with a local attorney.
Hope this helps. Best of luck!
Thanks for your question. Unfortunately, UCC liens are a rather complex topic. Based on our research, the answer to your question would depend on where the debtor company is organized. If the lien is being filed against a company that is organized in Arizona, then our research indicates that it wouldn’t matter whether the company’s inventory is in Nevada or Arizona – the lien would probably be valid. If, however, the business is organized in a state OTHER than Arizona, then the lien filer may be required to go through a complex legal framework to perfect their lien.
UCC liens are obviously a very complex subject with a number of moving parts. If you have specific questions about particular circumstances, we highly recommend that you work with a local attorney who specializes in these matters.
If you’d like to read more about UCC liens, you’re welcome to check out some of our articles on the subject here: https://fitsmallbusiness.com/topic/ucc-filing/
Hope this helps,
Thank you very much for your question. My understanding is that the value of real estate should only be added to the value of a business if the real estate is being included in the sale. If the real estate is NOT included in the sale, then you should probably include the proposed rent as a projected expense for the business. This would lower the business’s EBITDA and therefore the projected valuation. I
f, however, real estate is being included in the sale of a business, then the value of that property needs to be added to the value of the business in order to come up with a reasonable valuation for the complete package. The inclusion of real estate in the purchase of a business not only lowers the business’s expenses but also increases the value of the business because you’re buying an asset that can be resold.
If you’d like to learn more about valuing a business, you’re welcome to check out our article here: https://fitsmallbusiness.com/how-to-value-a-business/
Hope this helps,
Thanks for your question. We’re sorry to hear that you have a someone out sharing the details of your contract.
Sharing the details of a contract isn’t typical among people looking to sell a small business – it certainly isn’t professional. However, it does happen – especially among sellers who don’t have non-disclosure agreements that cover their previous agreements.
We have an article on non-disclosure agreements that you can review here: https://fitsmallbusiness.com/non-disclosure-agreement-template/. The article includes a template. If you’d like you can always speak with the buyer of your business to see whether she could be induced to sign an NDA and stop sharing the details of your contract. Otherwise, there’s unfortunately little you can do.
Thanks for your question. Customer financing can be a great way to help grow your business, especially if your typical purchase is $500 – $1,000 or more.
We have a great article on customer financing that should be helpful for you to better understand customer financing and get some ideas on who you might partner with to offer this tool. You can learn more about customer financing by checking out our ultimate guide here: https://fitsmallbusiness.com/offer-customer-financing/
Hope this helps. Best of luck!
Thank you very much for contributing to our article on using a ROBS for 401k business funding (https://fitsmallbusiness.com/401k-business-funding/). If you’re referencing another article, please let us know. Otherwise, we’ll review the article and see about getting that updated for you!
Congratulations on your new position!