How do I? Roth 401k and Roth IRA

22 Replies

I currently have a Roth 401k and a Roth IRA. I need somebody local who can help me figure out how to put those funds to work in REI. Any advisors in INDY that members can refer me to?

@Aleks Gifford , I am sure that you will find someone who can assist you.  First, what areas interest you and how much are you able to invest.  Knowing this is half the battle.

@Aleks Gifford

When you say you are looking for someone to help, are you looking for help getting the 401k and IRA into a self directed plan that can invest in real estate, or do you have self directed plans and are seeking help investing with those funds?

To my knowledge, there is no sizable firm offering self directed plan services in the Indy area.  This is a pretty specialized field with a handful of reputable firms (and some not so great, as with any field).  Expertise and quality of service will definitely trump geography when it comes to selecting a provider of self directed plans.

Medium safeguard rgb stackedBrian Eastman, Safeguard Advisors | [email protected] | 855‑997‑2298 | http://www.ira123.com

The Roth IRA is a semi self directed through TD Ameritrade but will not let me hold real estate. The Roth 401k is from my old company and is not self directed per say. Can I merge the two funds? If not how can I / where can I place them so I can use them to invest in properties?

@Aleks Gifford

You should have the ability to move both sets of funds to a new Roth IRA that can be self directed and provides the ability to invest in non-traditional assets such as real estate that are not handled by the Wall St brokerage houses.

There is a lot of good information here on BP on the topic. There are two types of IRA plans, those where a trust company serves as custodian and processes all investment transactions, or the Checkbook IRA LLC format, where such an IRA is subsequently invested into a specially created LLC that allows you to execute plan transactions out of a bank account of your choosing.

Do some reading here and on the internet at large and then call a few of the firms that specialize in this field to get a feel for which plan type will best suit your investment goals and which provider will give you the best overall value of business model, access to advisory services, and cost.  And of course, always check references and have your CPA take a look at your plans.

Medium safeguard rgb stackedBrian Eastman, Safeguard Advisors | [email protected] | 855‑997‑2298 | http://www.ira123.com

Excellent. Do you have names of some companies that I should consider?

@Aleks Gifford

the topic of self directed retirement accounts have been discussed here on BP forum many time. To start I suggest you search the forum using related keywords. There you will see investor's comments and recommendations. 

Medium logo 19 1Dmitriy Fomichenko, Sense Financial | [email protected] | (949) 228‑9393 | https://www.sensefinancial.com/free-consultation/ | CA Agent # 01876563

Check out their site they have helped alot of investors in my REI groups

https://www.trustetc.com/

@Aleks Gifford

Option 1: Take title to the property under a tenants in common arrangement. 

  • Therefore, the deed is recorded in the name of the ROTH IRA and the ROTH Solo 401k based on the ownership percentages.
  • All expenses are divided based on the ownership percentages.
  • Profits are also divided in the same fashion.

Option 2: Form an LLC and have have the Roth 401k and the Roth IRA as the members.

  1. Title to the property is taken in the name of the LLC.




Medium mysolo 401k logoMark Nolan, My Solo 401k Financial | [email protected] | 800‑489‑7571 | https://www.mysolo401k.net/

I found an interesting article on this:

http://www.marketwatch.com/story/how-to-buy-real-estate-in-an-ira-2013-04-02

One thing it seems is that with a trust company they have to review each transaction and with a financial planner/advisor you can control the transaction with out custodial approval. At least this seems to be my understand based on the 5 web pages I have read through.

How much do you have in ROTH IRA contributions? Withdrawing your contributions and using them as a down payment might be much simpler than using the IRA to hold Real Estate.

@Aleks Gifford - welcome to BP!

All good advice above.

I recently setup my Solo401k with the help of @Dmitriy Fomichenko .

I've used it to do some wholesale and have grown it over 25% in under 4 months.

Originally posted by @Jesse T. :

How much do you have in ROTH IRA contributions? Withdrawing your contributions and using them as a down payment might be much simpler than using the IRA to hold Real Estate.

Between the two accounts I have $5k. I have not made this years contribution yet.

@Aleks Gifford there is a presentation at the INREIA meeting next Tiesday evening covering SDIRA 

Don Harris, Jamison Realty Keller Williams | [email protected] | 704‑962‑0979 | NC Agent # 289021

Originally posted by @Don Harris :

@Aleks Gifford there is a presentation at the INREIA meeting next Tiesday evening covering SDIRA 

I am planning on attending that meeting. As well as the Thursday Meetup. Will I see you there?

Originally posted by @Aleks Gifford :
Originally posted by @Jesse T.:

How much do you have in ROTH IRA contributions? Withdrawing your contributions and using them as a down payment might be much simpler than using the IRA to hold Real Estate.

Between the two accounts I have $5k. I have not made this years contribution yet.

 With relatively little money in the account, I would look at REITs if you are looking for Real Estate Exposure.  REITs are pretty well suited for a tax advantaged account since they would be normal income if you had them in post tax account.

If you keep up contributions and get good returns, in a few years you could enough earning to keep a decent size account and use your contributions to fund a down payment or 2.

I am currently looking to buy more via tax sale especially vacant land. I have bought some and had good return. I actually doubled my property size on my primary for $700 via a tax sale.