I just bought my first deal a little while back and have people interested in my next deal. How do I raise money? PPMs & Term sheets? How do self directed IRAs work? Open to any and all suggestions!
What kind of deals are you getting into?
Self-directed IRAs... yes, you can do it... but it is filled with hazards if you don't do it right. The biggest risk is "self-dealing" and can get tricky when you have a leveraged investment and if you intend to self- manage. My opinion is I don't like them, but I'm sure you can find others who do. Review the link to the BP article if you are still interested...
congrats on your first deal Matthew, I grew with Andrew I'm not a big fan of self-directed Aire's but partially because I've never done one. I invest in stocks in my IRA which allows me to have somewhat of a balanced portfolio. To raise money from the private sector I would think you need to bring the deal to some individuals that have money. The deal would have to be attractive enough for them to invest in you. The Minnesota multi housing association has a meeting on November 10 which might be a good thing to bring to that group and discuss it. I'll be at that meeting if you're interested I'd be happy to look at the deal for you in person. To find out about the meeting go to bigger pockets/events. It's under MMHA meeting in Bloomington Minnesota.
I will "3rd" the advice that Self Directed IRAs can work but I would avoid it if possible. There are a lot of tax traps and self-dealing issues and there is a LOT of bad advice on BP about self-directed IRAs. Just because someone is doing something doesn't mean it is correct. An IRA is a retirement account, if you have enough money in a retirement account where you can invest in RE and if you plan to use ALL earnings for retirement purposes, it is perfectly fine. You cannot pay yourself a wage or use an IRA for current income purposes which is where many people on BP fail.
If you have a good enough deal a hard money lender may bite.
You can also setup a partnership and have individuals contribute money to invest with your but if you get to the point of raising a lot of cash you may run into securities regulations and you may need accredited investors.
Thank you both. @Brian Doyle what event are you attending on the 10th?
here is a link to the flyer
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