Self Directed IRA
Has anyone on this site worked with a private money lender that was using a self directed IRA account to loan money to investors. Also has anyone had someone transfer retirement funds to a self driected IRA for this purpose. If so I would appreciate some feedback on the major details and points for consideration. It seems like it could be very powerul for both the private lender and the investor since you know the money will be their and the lender will always want it to be working.
Thanks
TBarber
I have been using a bank callled Licoln Trust for my self directed IRA. I had the majority of my funds transfered to this account and it really lets you move houses and build wealth tax free. They are out of Denver Colorado and are very easy to work with when it comes to getting checks in place for purchases. I dont know what their email address is, but their number is 1800.825.2501.
Thanks for the info. Can you transfer funds from other IRA's and 401K programs without having to pay taxes on the transferred funds
Check out www.trustetc.com. Their FAQ section is very informative. I think many TCI members use them, including me.
Tim
Answering your queries re IRA use:
1. There are several large self directed IRA trustee companies, the largest probably being Equity Trust (MidOhio Co.'s spinoff), Entrust and & Pensco. but suggest you do search for IRA trustees and you'll get lots of info.
2. Yes, 401K, 403b (tax sheltered annuity plans for teachers, employees of other non-profits), can be transferred directly to one's own SDIRA plan for use in buying RE or notes, or making pvt loans.
Lots & lots of good free info on www re SDIRA these days, so read & learn.
Also anybody can go to www.www.IRS site and find and print the very well written IRS pub.590 on IRAs.
Caution: it is about 125 pp. so if you're close to an IRS office, it might be better to just go get a free book from them...unless you just love to see the ink and paper flow outa your printer.
I use a self-direct IRA and do provide HML or buy notes from the account.
1. The fees are high relative to a lot of other options. Hence you need to be making good money on your deals.
2. The upside is very interesting in that you get to compound tax deferred (normal IRA) or tax free (Roth IRA).
3. You can use a bit of leverage if you buy property.
4. There are some odd tax situations. You may get hit with a tax bill for a deal where outside self-direct IRA there would be no taxes due. I forget the exact situation as it has not happened to me. It is related to owning a property and receiving income.
Questions or comments?
If I miss something here send me a PM or email. I will try to check this thread but...
John
[addsig]
Both.
There are several sites that serve as the IRA custodian. If you find a potential hard money lender (like anyone over 50 with an existing IRA or 401k), you can download the forms, help them transfer assets to the SDIRA, and have them wire money when you are ready to close. Takes less than 2 weeks. To find out if they are interested, just ask "So is your retirement portfolio returning 10-12% safely"--"Would you like it to". . .
You should also consider opening your own account and buying within your own SDIRA, since you can roll the gains with tax deferral just like a 1031 exchange. Like others have posted, most of the SDIRA sites have ebooks you can download that explaint the benefits. The only downside is that if you are under 59 1/2, don't plan on pulling anything out of the SDIRA, or you will incur penalties and taxes.