All Forum Posts by: William W. Humphrey

An IRA can take on debt, which could increase your buying power by more than double. Not all lenders will loan to an IRA that is buying a property, but New Direction IRA has a list of lenders that do. Also, keep in mind that your IRA can be a tenant-in-common with other owners (whether they be an IRA, a person, or a corporate entity).

When offering an investment to IRA holders, we have found that there are 2 criteria for choosing a provider (excluding fees which are always an important factor) that can make your and your investors' experience more successful.

1) Will the IRA company provide you with education services to help prospective investors understand how SDIRAs work, and 2) Customer service convenience - do they have an online application that they can customize for you (not a fillable pdf), do they answer the phone when your investor calls, do they have free online services like bill pay for IRA assets, etc. Finding an SDIRA provider that will collaborate with you is an advantage.

Self-Directed IRA holders come in all income brackets, some accredited and some, not. Industry practice at the moment is that accreditation of the IRA follows the accreditation of the account holder. And, of course, accreditation has more to do with who you can accept as an investor related to the setup of your offering.

Both accredited an non-accredited IRA investors are always looking for opportunities. One thing to keep in mind is that many investors are somewhat to completely unfamiliar with how IRAs, HSAs, and Solo 401(k)s invest in private assets. Finding an IRA provider that offers quality education and tech conveniences like an online application, etc. can be key to capturing these investors.

While there are some contribution restrictions for all tax-advantaged accounts, it is common for an investor to open an SDIRA and fund it with a combination of rollovers, transfers, and contributions.  Many accounts (401(k), 401(a), 403(b), 457, defined benefit, defined contribution, etc.) can be rolled over without tax or penalty to an SDIRA in order to access private investments, usually after separating from employment at the company that offered the plan (but not always).  

There are some due diligence questions on self-directed IRA providers that can reveal some differentiation. It always makes sense to find out about the creation of the company, who runs it, experience, etc. Who is the custodian is also a good question to ask so that you can check out their track record and whether they have experience with IRAs. Fees, of course. Customer service like can you get someone on the phone? And then there is technology: client portal, online services like bill pay, use of online or other electronic means of closing transactions.

While I don't offer investment advice, I will say that an IRA can offer financing in much the same way as a non-IRA entity. It may be a logical sequence to decide the type of deal that makes you comfortable and then run that scenario past an IRA expert to see if it violates any IRS rules for the account.

HSAs are an individual, custodial account and follows many of the same rules as Traditional and Roth IRAs.  Therefore, the process for investing it in real estate is to open an HSA with a self-directed HSA provider, fund that account with transfers and/or contributions, then invest in the asset.

Hello David,

Along the lines of creating strategies for your contribution dollars, an HSA (if you qualify) can be a powerful investing tool.  Most people are just unaware that their HSA can be a real estate investor.

Hello Jim and Rachel,

While an IRA holder is not allowed to be the formal property manager of record, they are certainly able to handle the decision making, and, depending upon the IRA provider's services, the paying of bills and the receipt of rent or loan payments can be online and for free.

@Marcony Simoes

You do have great information already, and there are lenders that will lend non recourse for a short term loan.  We have a list of non recourse lenders that can help get you started, should you decide to go this route.  I also suggest you call around to SDIRA administrators and find one that can walk you through your strategy and rules, including UBIT.

Let me know if you would like a copy of the list.

@Macy Lee  Glad to hear you have your account with us!  We have a list of attorneys that can help you with the letter.  Give the office a call or private message me with your email and we will get the list to you.