Self Directed IRA and BRRR Strategy

[David Winston]

Buy and Hold - Can I use the BRRR Strategy with my Self Directed IRA purchase? if so Can I put back just the moneys used for the purchase from the IRA and take the cash out refi and reinvest it OR does all of the funds have to go back to the IRA and then reinvest from my self directed IRA?

[Justin Windham]

@David Winston

Self-directed IRAs and Solo 401ks can be used in the BRRR strategy. You'll want to have a good understanding of the prohibited transaction rules with either structure. Between the two, the Solo 401k offers many additional benefits if you're eligible:

• Compared to an IRA, Solo 401k contributions limits are roughly ten times higher.
• There is no custodial requirement for the 401k.
• You don't need the additional expense and administration of an LLC to have checkbook control.
• There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.
• A spouse can also participate in the same Solo 401k plan.
• The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.

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