All Forum Posts by: Brett Synicky

@Devin Basile Current LLC's should not be part of this. What's the nature of that LLC, what's it used for currently? For the IRA LLC it's a special purpose LLC that's created to be designed by the IRA. This is the Checkbook control style LLC. You can learn more here: IRA LLC

You are a disqualified party to your retirement account so you cannot transfer any assets you personally own or a company of yours owns into your retirement account.  

Learn more here:  Disqualified Parties and Prohibited Transactions

IRA can transfer to SDIRA just like any other IRA to IRA transfer, this is not a taxable/penalty event.

@Denice Contreras you can hire anyone to work on the property as long as the person is not disqualified. You your spouse, your children and their spouses your parents and grandparents think of a vertical line.   additionally any company that they own would also be disqualified  

Talk with @Michael Plaks he’s a great cpa and knowledgeable in this arena.  

@Sheryl Black You can do "white collar" work not "blue collar" work. So yes, you can guide the contractors, you just can't swing a hammer yourself. You cannot do any work on behalf of the IRA so you would not be able to use your license to facilitate a sale on either side of the transaction, even if you don't take any commission. Best to refer it out to a 3rd party real estate agent.

Yes, with checkbook control you will have a checking account that allows you to invest in as quickly as you can write a check or do a wire transfer or online bill pay.   This will avoid time delays and potential transaction fees associated with having to go through the custodian when needing any type of transaction done.  Different companies have different fee schedules...with checkbook control, it's generally more to establish and less over time...do your homework and decide which is best for you.   

Quote from @Avery Robertson:

I recently left my W2 and am now self employed. I had previously used the loan option on my 401k when I needed additional liquidity. Is there anyone that has experience with a solo 401k provider that provides a loan option? 

Solo 401(k) allows for participant loan of up to $50k or 50% of the plan assets whichever is less.  Paid back over up to 5 years or up to 15 if used for personal residence. 

You can learn more here:  solo 401(k)

@Kevin S. That's the custodian who has those limitations.  

Quote from @Kevin S.:

Hi BP members,

Anyone know why certain states are excluded from RE investment in SDIRA account?  My state is on the list.

Is Checkbook IRA breaking IRS rule in any way? It is offered as a way to bypass buying RE in SDIRA? How is that?

I read that companies offering a checkbook IRA LLC set up package cost more than that set up by an(my) attorney or CPA. Is that true?

Last question is within the previous question. I didn't know CPA can set up LLC? Is that true?

Thanks in advance.

Can you share the source of that information about not being able to invest in certain states using your ira LLC?  

To address your other question about pricing: there are full custodial IRA’s and there are checkbook IRA’s, aka IRA LLC.  Typically when getting checkbook control you will have a higher establishment fee but less ongoing fees and delays when having to go through the custodian each time you need to perform a transaction.  

Compare the two options and see which one works best for you.  

Not exactly. The special purpose LLC is designed solely for being owned by the IRA. You are the manager of the LLC which gives you checkbook control. I'll assets and everything within the retirement account will be opened up in the name of the LLC, including the checking account. You will work with your, custodian on any transfers into that new checking account. the plan document provider you choose will handle everything with the irs and state as far as the set up is concerned.

Hope that helps.  

@Kingston Yi Something else to look into is the difference between custodial and checkbook control. The SDIRA can own an LLC that you're the manager of giving you checkbook control allowing you to invest in as quickly as you can write a check or do a wire transfer. With Custodial SDIRA/Solo 401(k) you have to go through the custodian for all transactions. Note, you still have to have a custodian for all IRA's but the LLC gives you the ability to bypass them when making investments etc...One isn't right or wrong they're just different. Different fee schedules, different setup process. One puts you completely in the driver seat and one doesn't. Do your homework and reach out to some of the companies that offer these types of self directed retirement accounts for some free consultations...

Quote from @Kingston Yi:

Self directed IRA's can be used for investing into homes...so I've heard. I have a 401(k) that I'm currently looking to use for my next property and would love to move that into a SDIRA towards an investment. How does this work and what are some key strategies for this?

You can roll that into an sdira or solo 401K and invest in real estate.  The solo has advantages the ira doesn’t but comes with the requirement of self employment and no w2 employees other than spouse or partners in that business.  
SDIRA can be owned by anybody.  You can learn more about each one here: 

https://www.biggerpockets.com/member-blogs/2810/blog_posts/2...

https://www.biggerpockets.com/member-blogs/2810/21298-solo-4...

Ira will have ubit on leveraged real estate where the 401K won’t.  Otherwise they’re essentially the same on owning real estate. 

Hope that helps.