Self Directed IRA exchange?

[Mark Elder]

Here is my issue: I have money in my IRA, but I want to be able to invest and utilize the cash flow generated now. I believe if I self direct my IRA to invest in real estate all the profits have to go back into the IRA.

My thought is this: I have an IRA and I have a friend that has an IRA. Can we both make them self directed and loan each other money to be able to invest in real estate? They would be separate, but identical contracts that work independent of each other.

Is this legal and if so has anyone done something similar?

Or does anyone have any other solutions to what I’m looking to do?

[Mitch Messer]

Hey @Mark Elder. What your describing has been dubbed the "financial friends" strategy of SDIRA investing. I first became aware of this approach in training I received years ago from Dyches Boddiford and Pete Fortunato.

The main challenge here is to avoid the appearance of quid pro quo with your friend. If ALL your SDIRA deals are with him, and all HIS with you, it starts to look an awful lot like de facto self-dealing.

The solution is to expand your financial friends network to include many other SDIRA investors with whom you have no current ties. At that point, it's just business as usual!

I'm happy to introduce you to the training I received. Actually, I was scheduled to travel back to Atlanta to receive more in April, but COVID-19 led to the cancellation of the session.

For the record, I receive ZERO compensation for recommending this training. I'm just a very satisfied customer!

Connect with me here if you're interested in hearing more.