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Using self directed IRA to purchase Land
Can I use funds from my self directed IRA to purchase a piece of land. I believe I can.
Can I build several homes (i.e a subdivision or apartments ) on that land and sell the homes? I'm not a builder, so someone else will be building it. Technically, I wouldn't be working on it myself. If I can't build on, what are things I can do on it?
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Either structure can work. Which will be best will depend on your situation and goals. Get on the phone with providers of both services and see which suits you best.
With an IRA custodian, you have a processing agency. Think E*Trade but with different paperwork so as to be able to document the individual transactions that occur off-exchange in alternative assets like real estate. They hold the funds, sign every document, cut every check, and receive every deposit. If your transaction activity is low, this can work.
With the Checkbook IRA LLC, the IRA is still there, but pushed to the back end. The IRA makes one investment into a LLC entity. You can then control that IRA owned LLC and use the LLC as your transacting layer. You now hold the checkbook and can sign contracts, issue funds and receive income directly, without the 3-5 day process queue and per-transaction fees typical of most custodians. With investments that require rapid action or frequent transaction activity, this is a greatly superior option.