Is a sideways stock market and bad investment decisions preventing you
from building wealth in your retirement account? If so, you might be
interested in a small, but growing, trend among smart and savvy
individual retirement account owners–investing their retirement funds
in a Self Directed IRA with checkbook control and using that
self-directed IRA to purchase real estate.
Using a Self Directed IRA with checkbook control to invest in real
estate is accomplished in two steps:
1. By having your self directed IRA account to invest in a Limited
Liability Company – a LLC that you will organize and administer.
2. You will then use this LLC to make the investments of your choice.
By using this two step method you can invest your IRA in estate without
all the red tape and administrative fees involved in using your Self
Directed IRA to directly make investments.
By using an LLC to make the investments of your choosing will have
check book control of your investments. When you have an investment you
want to make all you have to do is write a check from your LLC to
purchase the investment product in the LLC’s name.
There are no approvals necessary. There is no time delayawaiting
approval from your custodian. If the option of using tax-deferred funds
to purchase investments, property or mortgages in your retirement
planning sounds appealing, you’llneed to locate an independent IRA
custodian that allows self directed ira investments and work with that
company to set up a self directed IRA account. Most banks and brokerage
companies–the most common IRA account options–limit your choices to
certificates of deposit, stocks, mutual funds, annuities, and similar
financial instruments as it is their best interest to do so – they make
their money from the sale of these types of investments. However,
Section 408 of the Internal Revenue Code permits individuals to use a
self-directed ira to purchase land, commercial property, condominiums,
residential property, mortgages, trust deeds, real estate contracts or
private placements and other types of investments with funds held in
many common forms of IRAs, including 401k’s, a traditional IRA, a Roth
IRA , and a Simplified Employee Pension plan, or SEP-IRA.
By using a Self Directed IRA with check book control you will determine
how your retirement plan and pension plan funds are invested. Setting
up a Self Directed IRA to make your investments is accomplished in a
four step process:
A. Open an IRA with a custodian that allows self directed investments.
B. Fund the Self Directed IRA.
C. Have the Self Directed IRA invest in your LLC.
D. Have your LLC make the investment you selected.