Self-directed IRA input

[Pamela Starnes]

Hi BP members....Wanting to get some feedback from those who have used a self-directed IRA for REI:

- any particular companies you would recommend working with (or would not recommend)

- has anyone used this with an IRA that MRD's were already required to be taken each year, specifically how did you work it to have liquidity to take that MRD each year or does cash flow meet that requirement

- any additional limitations or considerations when it comes to financing in this situation?

- any other considerations I might not be even aware of are appreciated.....

Thanks!!

[Brian Eastman]

@Pamela Starnes

I cannot recommend specific firm(s), but would encourage you to evaluate the various business models available, between having a 3rd party IRA custodian, establishing a Checkbook IRA LLC or a Solo 401(k). All such plans will allow for real estate holdings, but have different functional characteristics and you will want to choose the correct platform for your situation and needs.

We have many clients taking Minimum Required Distributions from IRA and 401k plans. Any liquidity you maintain in the plan will suffice. If you are generating cash flow, this is typically the #1 option, but you always want to have contingencies. The key is understanding what your expected distributions will be and planning ahead.

There are a ton of considerations when setting up and using such a plan.  As you educate yourself, the picture will become more clear as to which considerations apply to your specific situation.

The key is that the plan is invested at arm's length with no direct or indirect benefit to the account holder or disqualified parties (largely lineal family).