All Forum Posts by: Jordan Archer

woah woah @Jeff S. calm down with the assumptions and condescension. I am not associated with Ron Legrand, and the purpose of my question was to see if my partners could get further protection and security on their investment. 

@Taylor L. Your clarification did help with my question. I asked this question while I was sitting through an IRA seminar, and heard the speaker mention lenders insurance. However, the speaker was talking about a scenario where he would be acting as a lender and not as an equity partner.

@Jay Hinrichs thanks for your response. 

Should a private lender, using money from their ira account, get lenders insurance when investing in buy and hold syndication deals?

@Bill Brandt

What kind of tax and how much do you pay when using financing? Is this a unique tax that's only applicable when using an ira as the down payment?

@Aaron K. 

I'm not sure what you mean by no point in making higher returns on an IRA. Why wouldn't you want your retirement account to make a 10% return (from RE investments) rather than a 2% return (from safe stock options)?

If your property experiences marginal returns in general, I can see what you mean about the tax advantages inherent to RE (depreciation and expense reductions), but if you have an actual cash flowing property (such as a larger commercial property), then you'll still have profits that would benefit from tax deferment. 

Also, there is a yearly maximum of $6,000 for which you can invest in an IRA.

No.

You're money would need to be in a self directed IRA, which by nature is designed to save on taxes. Next, you would set up an LLC owned by your IRA. This is called an IRA LLC or a Checkbook IRA. You would act as manager of this LLC, and would have the ability to make purchases and sign documents on behalf of the LLC. Having this control allows you to save money on the transactional fees associated with a traditional SDIRA. You can not withdraw money for yourself or for personal purchases. You can only use the money for authorized investment purposes specified by the FED.

Who's the host of that REI meeting? I'm going to one tonight Hosted by Chris McClatchey at Keiser University.

Let me know when you're back and we'll get together. 

@Steven Gralow

Using your SDIRA account in conjunction with an IRA LLC will allow you more control and reduce your vendor fees for real estate deals. It will cost you more upfront fees to establish an IRA LLC, but the savings in the long run will be substantial. Normally, with a regular SDIRA, you would have to submit a request to your vendor when ever you want to use the money in the account. This will take time (sometimes causing deadlines to be missed) and cost money for each request. Where as with the IRA LLC, you are in control of the funds and don't have to pay a fee for each time they are used. You still need to follow all the rules established by the Fed for using IRA's to make sure it remains tax free.

At the level of cash you have, the transactional fees associated with your vendor may really diminish your returns. Using your IRA to invest in RE is a great strategy if you are looking for higher returns than your standard stock-based options. Once you have a little more cash, say 50k, then you can start speaking with people who know what they're doing and are working with SEC attorneys to make sure you're within federal guidelines as a lender.

I don't think @Aaron K. is saying using an IRA to invest in real estate is a bad idea. I think he means that the amount of money you have to invest at this point is just a little too small.

@Jermaine Chad Ingram Welcome to BP. I'm in Stuart, and do a lot of business in Fort Pierce, both as a realtor and as a flipper. 

It's cool to hear that you're purchasing properties using your IRA, and what you're doing seems pretty unique to me; I had to google dog trot stye.

I'm going to be syndicating commercial multifamily deals using IRA accounts, so I don't think what you're doing is silly at all. We should get together. I'd like to hear more about what you're doing.