Loaning Out Own Funds: IRA.Llc vs Roth
We're evaluating loaning out some of our funds for investors seeking only wet funding/transactional:
For those of you with experience loaning out your own funds for short term transactional funding, if you were setting up today, knowing what you now know, would you go with the IRA.LLC [Guidant's or someone else's ]
or a SD IRA--
and why?
And did you decide you needed a mortgage broker license when lending your own funds to non-owner occupied borrowers?
Thanks
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#3 Real Estate Deal Analysis & Advice Contributor
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- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
I think you may have three questions.
Roth vs. Traditional. IMHO if you can come up with the cash to pay the taxes I think you should convert from Traditional to Roth. I just don't think tax rates will stay where they currently are. So, while this really deserves a detailed analysis rather than a quick answer like this, I think you end up having to make a lot of guesses about the future in any analysis. So, just based on a general feeling, I'd pay taxes at todays rates rather than bet on my taxes being lower in the future.
Guidant's fees are horrible. I'm glad I paid them. I made several loans with an SDIRA with Sterling trust. Getting a loan funded in under two weeks was a push. With the IRA LLC you can fund in a day. Where this really came to a head was when I had to repossess a property. I had to pay back taxes, buy insurance, hire contractors and landscapers. If I would have had to make a check request for each of these items and wait for their OK it would have been a nightmare.
I use a broker but I'm not sure that's required.