My secret mentor hit me with an honest curveball!

[Timothy Riley]

My secret mentor hit me with an honest curveball!

SDIRA Consultants, SDIRA Holders, Real-Estate Tax CPA’s, Attorneys, Chime in:

First - my secret mentor is my attorney which sounds odd seeing that we have two different paths in life.

The reason he is/was my secret mentor is because he’s the first that gave me real honest advice and asked me the first meaningful question that lead me on my path. That advice was “quit playing” and that question was “why are you using your money?”

That wasn’t totally it, this person gave me several pointers on the process of purchases and made every transaction an ease for me and empowering me on who I was with each deal and that this was a business “MY BUSINESS”. He instructed me on getting a team, not just knowing the names of people in the fields that I needed but befriending them. Breaking bread with my Tax CPA (still working on this @Steven Hamilton II LOL), Golfing with my Banker, Watching the game with my contractor…

With all this said I forwarded him some paperwork from my SDIRA to format my LLC to purchase property through that LLC. My original question to him was; my plan is to go with a series LLC is it possible to create a unit (separate llc) within that for the SDIRA to have for the purchases I make for that account or does it have to be a total separate LLC?

His answer was "What's a SDIRA? Speak to a CPA and whatever you do don't let the SDIRA Company create your LLC."

Now shocked that the person I thought knew it all didn’t but thankful for an honest answer rather than being misled, BUT I’m back to square one where all of you come in.

1. Is purchasing a real-estate in this format a good way to go (not everything just one or two for my later years)?
2. Can it be done as a unit within my upcoming Series LLC?

One question that I searched but never found the answer to is:

1. How to cash out when the time comes with the properties in the SDIRA (cash out the balance and take control of the properties, sell the properties within and then cash out)?

[Timothy Riley]

@Dave Toelkes 

I fund my SDIRA with a percentage of my passive income profits. How I take make the purchase when ready depends on the deal and options at that time. Like @Brian Eastman 

mentioned this is a small step in the education process. @Lumi Ispas 

im with MidlandIRA and happy with them just reaching everyway possible for advice. @Crystal Smith 

Points taken and yes my plan to withdrawal was based on after the retirement age.

Thank you all...

[Lumi Ispas]

Hi @Timothy Riley,

You are in good hands. That's my company also. Call their office and Kristin will share with you how to set up all the LLCs and what is allowed and what not, so you don't mingle founds or personally benefit in any way from the properties that are inside the SDIRA.

Good luck to you!

[Timothy Riley]

@Account Closed 

Yes Melanie please do get back to me on any views you might have after going over the tax time process.

@Mark Whittlesey 

im looking towards notes myself as a start.

@Daniel Dietz 

thanks for the input and @Lumi Ispas 

I think I will go with the direction of Kristin on at least setting up the LLC.

[Account Closed]

@Timothy Riley I've started doing some research on my own. Just read Diane Kennedy's "The Insider's Guide to Tax Free Real Estate: Retire Rich Using Your IRA." Suggest you check it out - it answers some of your original questions. It helped me gel the pros and cons in my mind, though I still have a situation-specific question I'm going to put to the BP community soon before I talk to my CPA. =)

[Account Closed]

@Timothy Riley talked to my cpa. Long story short I'm opting to do an SDIRA for passive investments only. Putting rental properties in there doesn't really meet my goals (cash flow for early retirement) so I'm using alternate funding sources to do that outside of the ira.  My cpa's advice was if at all possible to do rental properties outside of a SDIRA, though as everyone here has also said there are a few ways it is possible. But my strong sense is - find another way to get into rental properties, especially if you're going the RE Professional route. Good luck!

[Timothy Riley]

@Account Closed 

Thanks for the update...