Self directed IRA

[Mike Rennhack]

Anyone have any info on self directed IRA? I have an IRA with 200 k in it and I'm considering using to purchase rental property....thanks

[Brian Eastman]

@Zee D.

An IRA can invest in tax liens. It is the IRA, not you, that is doing the investing. The IRA purchases the lien, collect the interest/penalties or forecloses on the deed as appropriate based on the jurisdiction. The IRA pays all expenses and receives all income. The income is tax-sheltered to the IRA.

For this type of investing, a self-directed IRA or Solo 401(K) that offers checkbook control will be critical. It is very difficult if not impossible to do this kind of investing with an IRA custodian acting as the processor.