Check Book IRA to Syndication

[Lyndon Timbang]

Hi BP, Just need your input about this: i am planning to rollover my 401k (from previous employer) to a Check Book IRA, LLC then after, i am looking at joining Syndication. Is this a good move? If not, what can you recommend? Thanks.

[Brian Eastman]

@Lyndon Timbang

Apologies, but this really is an unanswerable question.  There are so many factors that would help you to determine if this is the right direction to move, based on your situation, goals, type and amount of retirement funds available, other investment goals, etc.

From a purely IRA perspective, I would look at the following:

What is the nature of the syndicate? Is it passive income generation such as rental property or an active trade or business such as new real estate development or the like? Active businesses generate UBIT tax exposure for an IRA. Will there be debt-financing used? If so, there may be exposure to UDFI taxation for an IRA. And most importantly, what is the quality of the team and the project - basically is it a good investment for any kind of money (IRA or otherwise).

Also, if your non-traditional asset investing goals will only be a single static investment such as a private placement syndicated deal, do you really need checkbook control? We specialize in such plans, but would generally refer someone only looking at one static deal to just go with a custodian. The benefits of a Checkbook IRA LLC come into play when the investments will be static but in multiples, or individually transaction intensive.