Self directed IRA and compound interest

[Simon Stahl]

I am evaluating if it would make sense for me to move my 401k into a self directed IRA and use it to invest in a turn key property. The one thing that is bothering me is that I feel like I cannot use the profit for quite a while. If I have enough money in my IRA to buy one property with, say 50% leverage and then I am making a 10% ROI. That means that it will take me 10 years until I have enough cash in my IRA to buy the next property. During this 10 years, my cash just lies in the account and does nothing, when I would prefer to invest it right away.

Anyone in the same boat? What would be the smartest thing to do in this situation? I understand that there are other ways to invest like notes or syndicates, but that is not what I am asking about.

Simon

[Gail Greenberg]

A few thoughts - you can have a self-directed 401K plan - no need to open an IRA. If you're combining IRA cash with a non-recourse loan on a rental property, you're going to have to pay UBIT which will eat into your returns rather dramatically. And - really shaking my head on this one - why would you NOT be looking at notes and other types of investments that could not only be something for your money to do while waiting for their next outing as a down-payment on a rental but could actually speed you to that destination by growing your money pretty predictably?

Signed,

Confused