Question for those who are interested or who have a self directed retirement account

Lender · Clermont, FL · Member since 2020 · 168 posts · 88 votes

After opening a SDIRA or Solo 401k, what's some information you'd find helpful? Would it be information about how to deploy your cash, investment types, additional information about your current retirement account?

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John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

The rules about what you can and can't do with your account.

The best way to use the money in your account to grow it.

For me I used SDIRA ROTH accounts so that the money grew tax free and not just tax deferred. I also bought property tax liens at auction that turned into tax deeds and rental properties that my IRA owned.

It's important to keep cash reserves to pay for taxes, insurance and unexpected repairs.

It's also important to realize that you can't be over working on these properties. All repairs and maintenance needs to be hired out.

Know the rules to make sure you don't do anything to put your IRA in jeopardy.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
1y
The rules about what you can and can't do with your account.
The best way to use the money in your account to grow it.
For me I used SDIRA ROTH accounts so that the money grew tax free and not just tax deferred. I also bought property tax liens at auction that turned into tax deeds and rental properties that my IRA owned.
It's important to keep cash reserves to pay for taxes, insurance and unexpected repairs.
It's also important to realize that you can't be over working on these properties. All repairs and maintenance needs to be hired out.
Know the rules to make sure you don't do anything to put your IRA in jeopardy.
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Rohullah Sharifi
Dr · VA · Member since 2025 · 154 posts · 35 votes
1y
1. SD-IRA: you can do invest in real estate and defer the taxes on your retirement account
2. when your heirs get the inheritance, that would Step UP basis
3. flexibility on the investment management
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Jason MalabuteBusiness Member
Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 914 votes
1y
Quote from @Jonathan Chan:

After opening a SDIRA or Solo 401k, what's some information you'd find helpful? Would it be information about how to deploy your cash, investment types, additional information about your current retirement account?

When using a self-directed IRA (SDIRA) to invest in real estate, it's important to be aware that there are certain restrictions on what you can and cannot do with those funds. The IRS has rules around prohibited transactions and disqualified persons, so you'll want to make sure you don't accidentally run into issues by using the account in a way that isn't allowed.
Another thing to keep in mind is that if you invest in properties with leverage (meaning you’re using a loan or mortgage in the deal), the income generated from that portion of the investment may be subject to UBIT (Unrelated Business Income Tax). In some cases, that tax can be significant—rates can go as high as 37%.
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