Does anyone know where I can get a good (free) tutorial or course on self-directed IRA REI? My IRA is flying high right now and I may want to pull some money out to buy property with…
a self directed IRA is not the same as “pulling some money out.”
the money stays in the IRA - only difference is you get to direct the investments into more than the typical mutual funds, etc.
this is not to say that you have complete control. the IRA is prohibited in investing in anything that directly benefits the IRA owner: personal residence, anything having to do with a family member, etc. This “direct benefit” is what gets you into trouble.
Some courses talk about “checkbook control” of the IRA by having the IRA invest in a corp or LLC, with the individual as manager of the LLC. While theoretically possible, my administrator (Sterling Trust) will not make such investments without a private letter ruling from IRS: where IRS evaluates your specific circumstances and says “ok.” Painful and expensive to get. The risk is that if IRS determines that you personally benefited from the arrangement, the ENTIRE IRA is deemed distributed in the year the investment is made, you owe tax as if it was withdrawn, plus the 10% early distribution penalty, plus penalties and interest however many years back to when the investment was made. Ouch. You don’t want to screw with this.
Having said that, my self directed IRA is invested in five public limited partnership deals (condo in Telluride, CO, shopping mall in Dallas, etc). Plus it is carrying a 2nd mortgage on a rehab we sold two years ago. The rest of the money is parked in cash with a little holding on to a mutual fund position that I can’t get back in to because the fund is closed to new investment.
Deals with monthly income/expenses get expensive because the administrator charges for every paper that they process. Still, it’s a good way to put your retirement money to some use other than stocks, bonds and funds.
Look to the Entrust group they do ‘fully’ self-directed IRA’s. With the checkbook control that Mcwagner is talking about.
http://www.theentrustgroup.com/
I am no way affiliated with them. I was just at a meeting last night where the main presenter was an Entrust Advisor.
-Troy