Real Estate Investor · Kingsville, MD · Member since 2012 · 21 posts · 1 vote
Greetings,
This is my first post.
When the sale of the power plant I work in is final the old owners will give me my portable pension. I plan to roll that cash into a self directed IRA. I will roll my 401k into a rollover plan. I want to diversify our investment portfolio so my wife and I are looking at flipping houses with the money in the self directed IRA.
I know that we can use a custodian like Equity Trust or form an LLC. I like the idea of the checkbook IRA because it appears to be more convient than having to go through the custodian for checks. I know that like anything else there are pros and cons.
I am looking for feedback from people that switched between an LLC and custodian and why.
There are issues that make flipping with IRA money hazardous. PLease research more before you take that route. Before you choose to be your own custodian/trustee you should be very familiar with all the rules. I worked with Equity Trust for 3 years before being my own custodian and I don't think that was long enough. I still have plenty to learn. Checkbook control makes is VERY easy to cut corners on the rules and puts you in jeopardy of being penalized.
It's extremely easy to use Equity Trust to issue checks for payments. It's an online form and they just send out the check within 3 days at no cost (other than the annual maintenance fee).
For example let's say I hire the kid next door to mow the lawn of the flip house. With the LLC I can cut him a check that day it's mowed and the deal is done. Otherwise they have to wait for the money which they may not be willing to do.