Q's about IRAs, Private Money Lending and Being a Slave to the Bank

[Karen M.]

Hi Everyone!

I'm a couple weeks into learning, and I have to say, Real Estate is fascinating and so far, it's been very fun to learn about.

Last night I went to a Milwaukee REIA meeting. I got to meet Dawn A. from Bigger Pockets! It was so cool!

Last night's meeting was a roundtable, Investing 101 and Strategy session. I learned some things and have some questions.

1. One person talked about owning a duplex in Indiana within an IRA account. This is fascinating... you can own a property in an IRA? It was explained that if you do this, you cannot "work for your IRA", so it seems that the property needs to be professionally managed. A few IRA places and "checkbook IRAs" were discussed. I'm not sure what a checkbook IRA is. I thought that my Real Estate investing would all be with non-retirement money.... we have IRA investments in equities and I'd like to learn more about how that works.

2. I learned a little bit about private money. I might like to become a private money lender, or at least look at that as a something to try. What kind of money do you need to do that kind of lending? What steps should I take to learn about private money and how to get started or better discern if this is the path we should take?

3. The meeting coordinator used a phrase "being a slave to the bank". My initial thinking is to become a buy and hold landlord, buy a suburban property and rent it out. 30-year mortgage. 25% down. We can only afford so much before we will run out of down payment money. I should ask the organizer what "being a slave to the bank" means.... but maybe you have insights.

Thanks very much! I appreciate your input and conversation!! --Karen

[Account Closed]

Thanks for posting that article Marco. People are tired of being not only a slave to the bank, but a slave to the mediocre investments that their hard-earned retirement funds are currently tied up in. People know real estate. They understand it. As long as you are adhering to IRS guidelines (not living in the house, not performing "sweat equity", etc.) you can choose from a wide range of income-producing properties to diversify your self-directed retirement plan. If you are making your investments in a Roth account, all of that income is being generated tax-free. It seems like a no-brainer.