Retirement Account or IRA. You can convert a managed IRA to a self-directed IRA and decide the type of investments you want.

Step One: Fire Your Stock Broker

Instead of having a financial planner, broker or mutual fund company direct your money in stocks, bonds and funds, you can invest in your real estate deals. This is also a great way to purchase tax liens and certificates.

Step Two: Reach Out to Private Investors

Self-directed IRAs are a great sales tool for working with private investors. Regular folks with a little nest egg sacked away for a rainy day can accelerate their returns by investing these funds with you. And, the cool part is that it’s completely legal.

Here’s my recommended resource for self-directed IRA accounts – Guidant Financial.

A Few Rules from the IRS

The IRS does have a few rules on what you can’t invest in with a self-directed IRA – life insurance contracts, S corporations, art, jewelry, and other collectibles. That’s ok because you can use your returns on your real estate investments to buy collectibles, art and real estate.

Step 3: Learn the Ins and Outs of Self-Directed Deal Financing

This blog post just gives you the introduction to how a self-directed IRA can help you get started on your financial future as a real estate investor. Check out my Real Estate IRA Blueprint program here.

“Susan, I am looking into setting up a self-directed IRA but I have read some horror stories about people getting in trouble with the IRS because they did a “prohibited transaction.” What is a prohibited transaction and how do I know I’m not accidentally doing one?” — Jimmy Davis

Hey Jimmy, it’s good that you are aware of this. Here’s what you need to watch out for…

In a nutshell, you cannot invest in Collectibles or Life Insurance Contracts. In addition, there are certain transactions in which you cannot participate when using IRA funds. These are referred to as “prohibited transactions”.

Prohibited transactions are defined in IRS Publication 590. They were established to maintain that everything the IRA engages in is for the exclusive benefit of the retirement plan. Professionals often refer to these as “self-dealing” transactions. Self-dealing occurs when an IRA owner uses their individual retirement funds for their personal benefit rather than to benefit the IRA. As an IRA owner, if you violate these rules, your entire IRA could lose its tax-deferred or tax-free status.

Here are some examples of what the IRS considers a prohibited transaction:

• Your IRA cannot buy property you currently own from you.
• You cannot personally guarantee a loan for a real estate purchase by your IRA.
• You cannot use personal furniture to furnish your IRAs rental property.
• Your IRA cannot buy a vacation property you or your family intend to use.
• You cannot pay yourself income from profits generated from your IRAs rental property.

Self directed IRA’s are a phenomenal tool for real estate investors.  Just make sure you’re making the right decisions. Or working with a company who can educate you appropriately.  I recommend Guidant Financial.

That stinks. Especially since NASB is pretty much the only game in town when it comes to non recourse loans for your self-directed IRA.

I did a little research to see if there are any other non-recourse lenders that have popped up out there and I found First Western Federal – but I have not used them personally and can’t vouch for them.

If you have a friend, spouse or partner with an IRA you can partner up SDIRA’s to invest or if you have free trading stocks (not in your IRA) you can get a stock loan and use that cash to invest with your SDIRA.

Anyway, he recorded the interview and was gracious enough to send me a copy to share with you.

In this 20 minute Private Money interview I reveal:

• That it’s EASIER to get private money today than 5 years ago and I tell him WHY!
• How to find the people with money (and exactly what to say)
• The best ways to market

IRA’s

• How to work with investors with IRAs
• The process to help your investors roll over an IRA into a self-directed IRA

Pooling Money

• I discuss my thoughts on pooling money
• The benefits and drawbacks
• The best structures
• How to deal with equity partners
• How to structure LLC’s for raising money

Like what you see? Elite Members get this and a whole lot more! Become an Elite Member right now. Click here for details.

It's Got a Great Personality

It’s funny, yes. But also a little alarming. This just isn’t any lender. It’s the only lender in the country that makes non-recourse loans to purchase property with your self-directed IRA. So that literally means that this client can’t purchase the property. And it’s a cash flowing duplex.

I admit the landscaping is non-existent. And it looks like Earl and Randy live there right next door to Darnell and Joy but, c’mon. When a lender can deny a loan on a cash-flowing income property just because it’s not going to win a beauty contest any time soon, things are getting a little crazy.