Purchasing Tax Lien Certificates with SDIRA

[Sandy Uhlmann]

I would like to use my SDIRA money to purchase tax liens. At the moment, I am just looking at the online OTC liens but in the future, live auctions may be another option. I know people do use SDIRA funds to purchase these but with these needing near-immediate payment, I am struggling to figure out how this is accomplished outside of a checkbook IRA account. I have Equity Trust Company and I have a Tax Lien DOI. Each DOI has an area where you list addresses and Parcel numbers you are bidding on and then an area where you can request the amount of funding. I understand how this can work for a live tax sale but what about the online sales? Most require that checking account info to pay for the lien. I doubt that the county is OK with a certified check that would take days to arrive?

How do those of you that purchase online OTC tax liens through a SDIRA accomplish this?

Additionally, my SDIRA company requires the appointment of a tax lien servicer.  Do these exist?  I guess the statement from Equity does go on and say that the retirement account owner.  Does anyone use a tax lien servicer?

Here is the paragraph from the DOI:

"To purchase tax liens for a self-directed Retirement Account, Equity Trust Company requires the appointment of a tax lien servicer. The servicer may be an independent purchasing agent or the Retirement Account Owner, as long as the Retirement Account Owner does not receive any compensation for performing this service. The agent will be responsible for providing the custodian with the necessary information to properly administer the account. The following agreement lists the responsibilities of the Retirement Account Owner and/or the Tax Lien Purchasing Agent......."

[Mark Nolan]

@Sandy Uhlmann

The self-directed IRA LLC may be a better route, especially if the plan is to invest in multiple tax liens, to avoid holding fees, processing fees and process timely investments since one gains checkbook control over their IRA through the IRA LLC arrangement.