All Forum Posts by: Brett Synicky

Hey everyone,

I'm looking to learn how investors raise private capital from Self-Directed IRAs (SDIRAs) or HSAs for real estate deals. I know custodians like Equity Trust, Quest Trust, and Advanta IRA allow this, but I'd love insights from those who've done it.

- Best way to approach potential lenders?

- Key things to present the opportunity properly?

- Common hurdles when working with SDIRA lenders?

- Any recommended books, courses, or experts to learn from?

I’m raising funds for new construction projects and want to fully understand the process before talking to lenders. If you’ve structured deals this way, I’d love to connect. Appreciate any insights!

@Brett Synicky Thanks for providing these links. I probably did not make my situation clear as I am just starting to learn the lingo. I'm retired, and have rolled most of my 401K assets over to IRA's, but those IRA's are not performing. I'm going to ask my finance guys if any of them are setup as self-directed, but I doubt it. I'm not really interested in cash flow. I'm interested in capital appreciation. Can someone tell me what the options are for that?

Thanks Philip. If I am forming an LLC to be the lending entity, and the members of the LLC will be my Solo 401k Trust and a SMLCC I already own (since I do not have enough funds in my 401k alone to fund the loan), are you saying using personal funds to setup the new LLC and associated loan docs must be paid by the 401k?

Recently retired, looking to invest 401k assets outside of the public markets.

Thank you for your response. You seem to be quite the SDIRA expert. That's exactly what I was looking for. Please refer me to the tax codes that make any of these things a violation. Those are the answers I'm looking for: legal ones, not moral ones. All great deals should be based on what specific laws/rules pertain to that specific arrangement. Afterall, you wouldn't play baseball using the rules of football. Thank you in advance for pointing me towards the codes that make it a violation to do any of these things with a property my SDIRA does not own and with a person not considered disqualified. 

I'm interested in opinions regarding the tax laws of SDIRA's.

I'm considering loaning my fiancé $100k from my SDIRA so she can pay off the current short-term loan she used to purchase an investment property. This loan would be an 18-month, interest only, with ballon payment, promissory note secured by deed of trust on this investment property. 

Because we are engaged but don't plan to actually get married, therefore not disqualified, I want to help her as much as possible with the property and finances. Will any of the below items I plan on doing be considered self-dealing or prohibited transactions?

1. Provide myself as "unpaid" labor for the renovation process.

2. Manage the purchase of materials for the renovation.

3. Upon renovation completion, give her my furniture to furnish the property as a short-term rental.

4. Help to clean the property between guests.

5. Spend nights together at the property.

6. I also plan to insist she stop making the interest payments since it's all our money anyway. Nor will I require her to make the ballon payment although the promissory note will stay in place indefinitely.

I know all of these would be self-dealing/prohibited transactions if my SDIRA had purchased the property, but it didn't. The only connection is that it's the security for the promissory note so that's where the confusion is. I've also heard reference to "sweetheart deals" not being allowed but I've only seen that in relation to the percent of interest charged on the loan. I will be charging a market rate although I won't be enforcing payment.

I know the violation penalties are stiff, so I definitely want to stay within the laws. That's why I'd like to find out what I can and can't do and I haven't been able to find any answers online for this type of transaction. The one thing that would make the answers simple is, does the IRS consider the SDIRA the owner of a property that is only the security on a promissory note? That would make all my concerns violations of tax laws. 

Thanks for any input and especially if you can point me towards the specific tax code addressing a situation like this!

I'm looking at moving my 401K into a self directed IRA. I wanted to see if anyone had any recommendations on which company is the best to do this.

After calling around, Equity Trust seems like it offers the most benefits to it's customers by allowing for a wide range of investment opportunities and they definitely seemed to have the best customer service for the companies that I called. 

They do seem to have some high fees though ($750 annually and $1,295 LLC setup if you want to use the funds for real estate). I'm ok with that if the customer service is good.

Does anyone have any recommendations for companies that you use for self directed IRA's that might be a better fit than Equity Trust?