All Forum Posts by: Fanof Mawson

Hi Kevin,

I have a simple suggestion that can help, although ET cannot provide it to you. Anyway, here it is: The Entrust Group offers what is called a myDirection asset card. It is essentially a debit card that you can use to pay your IRA's expenses, pay an earnest money deposit, or even make investments. It's $25 per year and $3 per month. It's great for anyone rehabbing properties in their IRA, because you have immediate access to funds without delay.

Additionally, I agree with the comments above that you should not be handling your IRA funds in your personal name. You can setup the LLC with checkbook control, as Dmitriy suggests, but I think the debit card is simpler, easier, just as effective, less complicated and less expensive. This link will tell you more about it:

http://www.theentrustgroup.com/product/mydirection-asset/

Good luck!

Gary

You might try Entrust. I and a number of others I know have been very pleased with them. If you're investing in real estate, they have a dedicated team focused solely on RE transactions.

Hi Charles,

You're taking the right course by checking with your 401(k) provider to begin. I don't believe you would be allowed to invest in real estate or to transfer funds out to an IRA prior to separation of employment. It's generally after termination of employment that people rollover their 401(k) from a former employer.

That said, on the off-chance you're able to do so, it actually [/i]is permissible to "partner" your IRA funds with personal funds to make the investment. The key is that the only time you're able to do this is at the time the home is purchased. That is[i] allowable. But if you tried to invest personal funds into a home your IRA owned already, or tried to invest IRA funds into a home you owned personally, that would be a prohibited transaction as described by Mr. Beard. To read more on prohibited transactions, see Internal Revenue Code section 4975.

Another thing you would need to keep in mind is that, in order to partner your personal and IRA funds to make the investment (only permissible at the time the home is purchased), technically you would need to be able to demonstrate the means to purchase the home personally, without using your IRA. (Being able to purchase it personally would include purchasing it with a down payment and bank loan; it would not have to be all-cash). As Mr. Beard mentioned, the "self-benefit" rule restricts you from personally benefiting from your IRA; were you unable to make the purchase without using the IRA, then its usage would mean you were benefiting from it.

I hope this helps. You might give the folks at The Entrust Group a call. They can talk this through with you.

Gary

Try Entrust. They are terrific.
http://www.theentrustgroup.com/

As Scott Hubbard said, you'll need to have an operating agreement, usually prepared by an attorney.