Investor's IRA to Self-Directed IRA and Application

[James Letchford]

I have a friend who would like to put some of his money to work in my real estate investments. He currently has an IRA with ~$55K in an UBS account with a number of market investments. The investments are marginally performing.

Because he wants to invest in what I'm doing, I'd like to make this process as smooth as possible. Here are my questions:

1. What does he need to do in order to convert the current UBS funds into a Self-Directed IRA?
2. Any recommendations on who to convert with?
3. What type of fees, tax implications, etc are associated with this conversion?
4. How long does this process normally take?
5. How soon after can he start using the funds to invest?

Thanks in advance for any help you can

[Bryan Scrivener]

I just went through this process and for me, it took close to 3 months from conception to actually being able to invest the money. There always seems to be another step, another form, another fee. I went through a financial adviser and that added some layers of time and expense that aren't necessarily required but, if you aren't an expert, are probably a good idea. There are a lot of rules you need to be aware of to protect yourself from prohibited transactions. The consequences of which are your IRA being declared no longer an IRA so you get to pay taxes and early withdrawal penalties on the entire value of the account.

If there is a way for a novice to get this done in a day I'd sure like to see that in action.