I was not for sure which Discussion Forums group I should go to for this question. :
I have someone that would like to partner up and use her self directed IRA to Quick Turn some properties.
Of course we are both looking to make money.
Question 1. What or how would be the best way to set something up to where I make money?
2. How do we get money into her pockets instead of all going back to the Roth, or should I say get the ROTH to pay us??
Thank you for your help.
East Coast Girl :
Hi EastCoastGirl
From what I understand of the process. ( I am in process of moving my roth ira to Entrus adminstration her ein Florida) Your adminstirator will basically wire the funds to an escrow account. and your partner will do the same. I belive you will need to let your adminstrator know how much to move, cuz depending on the property, you may need additional money outside your IRA to help you buy properties. I.e. I understand it has to be less than 50%, my new adminstirator suggested 40-45% so as not to break any rules when you parter up with money outside your ira. On the otherhand if you contribute 50k and your partner has 50K to contributie to buy an 80K house, you have 20k left over for rehabigin.
Hope this helps. Otherwise go to trustetc or entrust to look up what you can do. Entrust I believe has a forum where you can get all your answers.
steve
Hey,
My understanding is (and I have such) that your money has to stay in the IRA. That is, if you buy a lot, for instance (true story) then that lot you bought is deeded in the name of the IRA (or the trustee holds title). You may rightfully lose your investment and thus your IRA loses money. You might make money, we hope, and that excess is yours to do with as you please. Your original funds stay in the IRA unless you take them out and thus be eligible to pay taxes on it. This should not be understood to be sound (or knowlegeable, for that matter) financial advice.
Peace,
Richard
Of course the money stays in the IRA, but you have the right to buy property with it. If you partner with your other funds, it has to be less than 50 %. Whatever the gain or loss you get. That percentage is what the IRA gets. The excess has to be determined by who you partner with. If you ira has more than 100K, then who cares who you partner with. You can do the whole deal. I was only stating that we who have less than 30K needs to repeat that proceudere until we can do big deals in teh name of our IRA. And that wahat I am planning on doing in the next 2 years.
steve
Thank yu for your imput.
She will be the investor and I will find and work the property.
So far from what I understand what ever profits the property makes has to go back into the IRA, now in order to recieve any of that money from the IRA it would have to be done by invoice as lets say a property management fee. ( it has to be an arms length transaction) Which will be paid to you upon recieving a invoice.
I will be contacting someone at Entrust, there website was very informative.
Thanks again