How can I use a self directed ira

Question

Matt Faircloth · Answer

Thanks for the shout out on the webinar @Alexander Wardell

@Quintin Gulley Jr ,I can sumarize it here but you are welcome to listen to the webinar for the full story.  My book Raising Private Capital goes into a deep dive on the topic as well.

Your dad can covert his IRA to a Self Directed IRA by rolling it over to a custodian that does this.  We use CAMA Plan but there are others out there also.  Once it's in a Self Directed, he can invest in almost anything he wants - direct stocks, bars of gold, and he can loan it out on real estate deals or invest in equity deals also.  That's the good news.

The bad news is that he can't invest with you.  You are considered a "Disqualified Party" because you are his son.  You can't invest your IRA with your children or your parents, or their spouses.  You can invest with siblings, cousins, though.

If he wants to invest in real estate in general, he can roll it over and then expore options from there.

Good luck!

Matt

Alexander Wardell · Answer

@Quintin Gulley Jr

https://www.biggerpockets.com/rei/self-directed-ir...

skip to minute 20 of the How To Fund Your Deals With Other People's Money webinar and @Matt Faircloth will explain it a little.

Good luck!

Dmitriy Fomichenko · Answer

@Quintin Gulley Jr,

Self-directed IRA can be a great way to diversify out of the stock market into alternative assets such as real estate. This is a topic of frequent discussions here on BiggerPockets, there is actually specific forum category dedicated for this called "Tax, Legal Issues, Contracts, Self-Directed IRA" you can access it here:

https://www.biggerpockets.com/blogs/2810/51528-how...

If you do a simple search with this keyword you will find many discussions as well as blog articles related to this, some of them are very educational, results will keep you busy reading for hours but you will learn a lot.

As @Matt Faircloth mentioned it is very important to understand who disqualified person is to your IRA, any transaction between an IRA and such person is considered prohibited and will disqualify the IRA.

Also remember that retirement accounts are meant to be invested passively (rental property, private lending, syndication, tax liens, etc), any gains or profits from an active business inside of an IRA will result in Unrelated Business Income Tax which tops at almost 40%.

Hope this helps!

Joe Tomko · Answer

@Quintin Gulley Jr, like @Matt Faircloth, I also use CamaPlan and like working with them.  A good organization.  There are others as well.

Quintin Gulley Jr · Answer

@Matt Faircloth thanks for the reply that information was very helpful. I had it backwards I thought I heard that he wouldn't be able to invest it only someone else can. I will check out the webinar I was registered but missed it and the book I've seen you on a few thanks for taking the time to reply thanks

Quintin Gulley Jr · Answer

@Alexander Wardell thanks for your time information and help I will be checking out that video

Sam Shueh · Answer

Yes you may use an ira to invest. Suggest you check the constraints or a cpa.

How can I use a self directed ira

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