Strategies for Using IRA money to invest in real estate.

[Dan Velasquez]

Hi fellow investors. I haven't been on here in a while. I am trying to research different ways to use investor money. I have heard of folks using other investors selfie directed IRA money to invest in realestate and am looking for information on this strategy. Is anyone doing this right now? What are the rules and regs of this technique? Any info is appreciated.

Thx so much. 

[Brian Eastman]

@Dan Velasquez

Yes, you are simply looking for private lenders. 

You are an investment provider, with an opportunity for that investor to lend on.

An IRA may be a lender, whether the IRA is simply using the 3rd party processing services of a self-directed custodian, or whether the client chooses to create the more flexible Checkbook IRA LLC platform. For a lender just doing one longer term note, the custodial route is pretty simple and cost-effective. For a lender that will be doing multiple loans concurrently or a series of shorter term notes, then the Checkbook IRA LLC will reduce fees and paperwork, as they can lend directly from the IRA owned LLC instead of needing the custodian to do all the processing (and charge for such).

So long as the borrower is not a disqualified party to the IRA, this is a perfectly suited investment for an IRA. The earnings are passive interest, and fully tax sheltered to the IRA. Really no different than if a stock issued dividends to the IRA or interest earned on a CD, but I highly suspect the rate of return for rehab and new construction loans will be much better.

You want to get on the phone and speak with some plan providers.  They can help you be more conversant on the topic and then be someone you can refer potential investors to for plan services.