Self Directed IRA

Sounds like a great opportunity.

Rina

I know a little bit about self-directed IRAs, yes. But not these 2 custodians.

could someone dive in a little more detail about how self-directed IRAs work, as well as the rules/regulations and benefits? I have a Roth IRA and was about to convert it to a SEP because I can load $40k per year into it and have more benefits than a Roth. This vehicle sounds interesting and def sounds like a good way to use the tax lein strategy of investing, since all you would have to do is buy a tax lien, buy paying the back taxes off a property. If the owner doesn't pay you back including the interest that is on the certificate, you get the property free and clear. So either way your account will continue to grow either with paid back money with interest or a property that could very well be worth thousands of dollars that you could sell and stuff into your IRA. Let me know!

Thanks!

If you visit the websites listed above, they are quite informative. They also have contact information, and the representatives are very helpful.

Al

I read an article about self directed IRAs and the author recommended looking at three custodians, Pensco, Entrust and Sterling. After reviewing these three I narrowed my first choice to The Entrust Group based on them having a local office in Washington state (my state), checking with the BBB, and the broad range of investment services they offer.

Before I transfer my existing IRA into a new self directed IRA with this custodian I wanted to make sure I have done my due diligence. I don't want to make a mistake on this. Any suggestions on finding a good custodian or checking one out? Personal experience with a particular custodian?

Thanks!

I read an article about self directed IRAs and the author recommended looking at three custodians, Pensco, Entrust and Sterling. After reviewing these three I narrowed my first choice to The Entrust Group based on them having a local office in Washington state (my state), checking with the BBB, and the broad range of investment services they offer.

Before I transfer my existing IRA into a new self directed IRA with this custodian I wanted to make sure I have done my due diligence. I don't want to make a mistake on this. Any suggestions on finding a good custodian or checking one out? Personal experience with a particular custodian?

Thanks!

Thank you for sharing the information on the self directed IRAs. I have always had an interest in this and will try to find our more about it. It sounds like a great option for investors, whether it be their cash or another option for financing. Believe and achieve

Hello all,
I have been doing research also with a company on self directed IRAs. One of the restrictions or rules is you can't get the money coming from the property. I.E. you use your IRA to purchase a house. All the funds that comes from the purchase of that house is put directly into your IRA. Monthly payments etc. When your resale it if I am correct the funds from it go into the IRA as well. (Someone correct me if I am wrong here.) But a way around that is to find another investor with a corporation set up and do a deal with them. The IRA will hold the mortgage and the investor gets the property making a win win for you both. This way you are making money off the interest without doing any work or the money coming out of your own pocket. So now not only are you getting the tax benefits etc you are also getting a better return on investment than other vehicles. Most investors also offer the option of liquidation within a 30 day period without a penalty. Again this is my understanding. I can double check with the company if any of you are interested.
Hope this helps,
Ericka

I recently contacted Equity Trust (www.trustetc.com) in order to open a Self Directing IRA for Real Estate investing. I choose them because other people I know highly recommended them. Their fee structure is extremely competitive – especially if you plan on doing more than two property purchases a year out of the IRA. Also, their annual fee is based on how much you have in the account – if you have a balance of $25,000 your annual fee is less than if you have say a $75,000 balance, and would be even more is you had a $150,000 balance. This is advantageous to those of us who can only transfer under $50,000 from an existing Traditional or Roth IRA. I plan to open my account in October, 2009.

As previously mention in other comments I read on this blog, any income or capital-gains realized from the properties in your Self Directed IRA are retained in the account – you cannot use these profits for your own personnal use until you retire. Otherwise, you'll be taxed and penalized.

But this is also worth noting – any expenses relating to the properties in your Self Directed IRA must be paid out of your IRA. For example, say your town had acquired tax delinquent properties. One of these properties was a 5 Acre parcel with an small old house on it, and the taxes due are $15,000. You get the town to sell you the property for the back taxes after finding out from a real estate agent that the land could easily be sold for $80,000 to $90,000. You decide to purchase this property out of your Self Directed IRA.

So you start to improve the property by tearing down the old house by yourself with the help of some friends, and get the local junk yard to dispose of what you can't burn for free – no problem yet. Then, you start to improve the lot buy clear-cutting a few trees, clearing the weeds, and ending up with a nice looking lawn. Wait – technically any expense you incur for this land improvement must be paid out of your Self Directed IRA. So, when you pay for gas for the weed-wacker & lawnmower, or the gas/oil for the chain saw – you must reimburse yourself by writing yourself a check out of the Self Directed IRA and keep the gas receipt as proof of the IRA property expense.

Also, say you want your children to stay and raise their family close to you in your town. So, you offer them the land to build their house. But you can't – because none of your immediate family members can benefit from this property because Self Directed IRA restrictions.

I use this example to illustrate that a Self Directed IRA does have restrictions you need to be aware of, and that if there is even a remote chance that you, your children, or your parents may need to use the property for their own use – don't purchase it via a Self Directed IRA. If you really need to use IRA money to purchase a property that you or immediate family members may need to use – cash out your IRA, take the penalties, and go from there.

Vty,

Dan D

I found the following site that has aList of Self Directed IRA Custodians:

http://www.thehardmoneypros.com/self_directed_ira_custodians.shtm

I am currently working with the following company:

http://www.preferredtrustcompany.com/

this is really great info and I checked out the links for the self-directed iras custodian-looking for one now, tax time... thanks!