Can this be done? Need some guidance?

[Wes Brumit]

Please point me in the right direction. Maybe a thread , blog, podcast that discusses the following question:

My current profession affords me the opportunity to know of many individuals that I have a current relationship with, that are retiring. These retiree's have the availability to liquidate a portion of their Retirement account through a lump sum. The proceeds fall under IRS Code 401(a). Most of the time, these folks will roll the lump sum over to an IRA. I'd like to know if there is an opportunity there to have them instead invest that into RE deals. Ones that I originate for them. I know if they use the money there are tax consequences but I believe if I'm correct, the ROI would more than compensate their tax bill. So, in my scenario, is all this possible?( Maybe, cultivate a private lender list?) If so, please guide me to the discussions so I can read it and/or listen to the podcast.

[Bill Gulley]

No idea what your expertise is but it sounds like it's not in lending or finance. Dealing with retirees money is a good way to end up in jail. You need to see an attorney, just as those clients may with or without your knowledge. No one on this site is qualified to guide you in the brokerage business in the Lone Star State, especially in any podcast. There are commercial and consumer lending laws at the federal level as well as SEC regulations you must be aware of as well. This all being aside from IRA distributions and taxation.

Your intention isn't really clear, so lending is what I just mentioned just in case.

Investing is a different animal if you abide by SEC requirements and don't put your investors in a position of being lenders that would constitute brokering or funding loans as a business. If one were truly a partner that can be easily accomplished. You could have more partners and in Texas you have a Series LLC that could be used. Then you have distribution requirements for the IRA as they can't borrow their own money unless they replace those funds under time constraints. Setting up such an organization really requires legal and accounting expertise, an attorney and a CPA or an accountant that deals in this area of finance.

Borrowing from retires is a very touchy area, it usually won't matter what someone agrees to or how you think you may be covered in limiting your liability, if some elderly person sqauks at all, the judge is going to lean their direction, too many whizbangs out there ripping off retires and investors that don't have a clue as to what they are doing losing the money, it's as if they are a protected class. The only way you can guarantee them money is by having money, RE has too many pitfalls to guarantee anything. See an attorney!

I'm not saying it can't be done, just that this forum is not the place to get that type of advice, Lord knows there will be some who think they can guide you. I wouldn't do this without a good Texas attorney familiar with financial entities, qualified retirement accounts and state lending requirements as well as SEC matters. That's how broad the swath is for your idea and that means you'd have experience in finance yourself, assuming a lending route.

Instead of thinking of me as the guy who rains on parades, think of me as one who puts out wild fires before they start. :)