Self-Directed IRA and Benefit Plans offer you the opportunity to invest your qualified funds in activities you understand and that are generally more stable and more profitable than the equities markets. 

You may “Self-Direct”
Roth IRA Accounts
Traditional IRA Accounts
 Defined Benefit/Contribution Accounts
SEP-IRA, Simple, Keogh
Coverdell Educational Savings Accounts
Deferred Compensation Plans
"Rabbi Trust Funds" 

Self-directed IRA (and other qualified) accounts may become powerful financial tools and an effectivepart of your asset protection program. Self-Directed IRA accounts offer the aggressive and sophisticated investor the ability to "have checking privileges" on their IRA account and invest their funds in what they know and can control.

We work together with your custodian to form an LLC for which you may be the uncompensated manager. As the manager, you may directly control the investments that are made by the LLC. This LLC may also invest in other organizations and that organization, under the right set of circumstances, may do just about any type of business and flow profits back into your LLC.

The LLC owned by your self-directed IRA may (there are complicated rules to comply with) be an owner of a corporation which leases equipment or employees, or provides other services to your business or to the business of others, and it may own assets that you wish to have protected as IRA assets.

The LLC owned by your self-directed IRA may purchase real estate for investment purposes and may conduct a broad range of real estate and other passive activities, the profits for which will flow directly into your IRA account. If your self-directed IRA is a Roth, then the profits generated and the earnings on those profits will eventually flow out to you as tax-free income.

The LLC owned by your self-directed IRA may be a beneficial owner of a Land Trust - which will allow the IRA to control multiple properties without debt financed income issues, even though there is debt on the subject properties, allows the LLC to control properties through Partial Interest deals, Lease Purchase deals and many other very powerful real estate strategies.

Other Strategies with IRA accounts include converting funds in an IRA account into a tax-free retirement income, utilizing your IRA account in conjunction to your own charitable trust (CSO), and other strategies that allow you to substantially reduce the income tax costs associated with withdrawals from qualified accounts.

If you have funds in a qualified account other than an IRA, there are many circumstances in which those funds may be moved into one of the IRA strategies we employ for our clients which will provide you with the opportunity to participate in the same strategies and their benefits. We will be pleased to discuss your personal situation and investment plans to determine how, or whether they will fit into an IRA-LLC plan.

The narrative provided below will provide you with an overview of the types of investments you may make with your self-directed retirement accounts.   It is an overview of how to self-direct your retirement accounts so that you may invest in what you know and can control. Self-directing your retirement accounts has been allowed from the beginning, millions of people are self-directing their accounts.   We will be pleased to consult with you about your particular situation and create a program that fits your financial situation.

Self-directing your retirement accounts puts you in charge of your investments and may save you thousands of dollars in fees and administrative charges and will greatly simplify accomplishing the transactions that you do.

Acceptable investments and transaction must:

           be for investment purposes
           not create a prohibited transaction (with a disqualified person)

The list of possible asset types or eligible investment structures is virtually limitless:

Real Estate:

Single family and multi-unit homes, apartment buildings, co-ops, condominiums, commercial property, improved or unimproved land, leveraged or un-leveraged, may be purchased for investment or rental.

Land Trusts allow you to control the title when doing FLIPS, Lease Option FLIPS, Short Sales, cheap resale and simple partnerships, and Partial interest deals.

Lease Purchase and Option Real Estate. – You acquire property on a lease purchase or Option and then sublet/flip the deal.

REITs, TICs, Publicly traded partnerships, certain other real estate investment vehicles may have special rules to consider relating to UBIT (Unrelated Business Income Tax)

Foreign real estate may be owned by your IRA

Tax Lien Certificates and Tax Deeds may be owned by your IRA

Lending:

Hard money and conventional loans and leases (to unrelated parties OR to entities not controlled by you and your family (less than 50% owners) (Never lend without a land trust!) (You may collect loan commitment fees, points, other fees.   You may get an “equity kicker” in certain cases but may have UBIT if the property is otherwise leveraged as the equity kicker is based on earnings.)

Contract for Deed is a great way to sell property or assets owned in the IRA – because you do not give up title until the contract is fully paid.

Purchase seller “take-back” mortgages, buy defaulted mortgages or debt.

Working with (not disqualified) Builders:

Plan A: Buy lots, then sell the lots to builder on a subordinated note. This should allow the builder to count the note for land as equity in the deal.

Plan B: Buy lots, then sell lots to builder for a profit on a subordinated note – then provide construction lending to builder (best on pre-sold deals)

Own a Business:

There are special rules with which to comply, but your self-directed account may form and operate a business that does anything (if the business is a “C” corporation). And, with certain special features included in the company documents, the company may provide you with compensation.

Brokerage Accounts:

Your retirement account may own one or more brokerage accounts and conduct trades in any public market in the US or in foreign markets.   You may establish accounts that you trade or you may engage a broker to managing your trading.   You may arrange your brokerage accounts to allow you to trade on margin, but trading on margin may result in UBIT.   Remember that all distributions from your retirement accounts will come to you as ordinary income, not as capital gains.

ILLUSTRATION OF SELF-DIRECTED STRUCTURE OPTIONS