IRA and 401k for buying real estate

[David Jones]

Did you know that you could use a self-directed IRA in order to purchase real estate? I have spoken to a couple of different companies that specialize in this. Before I start referring clients to them I wanted to know if anybody recommendsanybody. The two I'm looking into are "equity trust" and "guidant financial".

[Matt Devincenzo]

Yes I've had a SDIRA for about 9 years now. There are literally hundred of threads here on BP about these you should definitely read through several of them.

Since you mention referring clients, you will want to understand exactly what each offers and how the process works. You can have a SDIRA with a custodian that you submit purchase authorization to in order to purchase a property. Or you could set up a "check book IRA", this would be where the client themselves have access to the account and can purchase and dispose of assets at will. This can be great for those fast purchase needs, but a disaster if they don't know what they are doing and all the rules to prevent distributing the account.

Also there are a lot of other SD retirement vehicles that may be better or more appropriate for specific individuals like a i401K or solo401K or using that 401K along with the ROBS (rollover for business startup) which allows your 401K to fund your business startup.

Also the different types of plans treat using a loan differently, and the types of loans are restricted as well. Look up UBTI and UDFI to get an idea of what the issues are with leveraging inside of retirement plans.

So welcome to the forums and take a look through the existing threads and I'm sure you'll end up with plenty of ideas and questions for awhile.