Self-Directed IRA for an Investor

[Account Closed]

Hi,

I know someone who wants to lend me money from his retirement account.

I have suggested that he set up a self-directed IRA, which could then put his money into an escrow account, where he could basically act as a mortgage broker, using his self-directed IRA to invest in trust deeds.

Would someone with knowledge and experience please provide more insight into this? I want to be able to walk him through it step by step.

Thank you

[David Beard]

@Ky Sharp, assuming your friend is in CA, those annual state LLC fees of $800 or so are also very nasty for the IRA/LLC. The much better avenue is the SD401k, which has checkbook control but does NOT require an LLC. I used www.mysolo401k.net to establish mine and have been very pleased. They have all kinds of great info on their web site to guide you.

For a "sponsoring business" for the SD401k, your friend can simply sign up to be a distributor for a great product (such as a nutritional product, for example, there are thousands of possibilities). This typically costs little to sign up.

The benefits of the SD401k relative to an SDIRA are huge. Search other posts for SD401k or Solo 401k if interested.

There also remains a bit of taint surrounding the IRA/LLC in terms of potential future IRS action against these arrangements, that you do not have to worry about with the SD401K.