All Forum Posts by: Matt Calhoun

I am an employee of a custodian. Certain family members are considered prohibited parties to your IRA account. As for the deed, It will show the owner as something like XXXXX Trust Company As Custodian FBO John Tomassacci. Your IRA account is the owner of the property. The IRA custodian holds custodianship of the IRA and acts as the administrator of the account. If you choose to transfer the holdings or take personal ownership later, you have the ability to do so.

Hello John, This would not be a requirement of the IRA custodian. Not to say it may not be a good practice. Are you thinking of self-managing or having a friend or family member manage? 

Hey Kevin, Congrats on starting in real estate. As far as the SDIRA options. REITs are definitely an available option. Some publically traded or large REITs are available through non "self-directed" custodians. However, if you are looking at smaller or private REITs this can be done through an SDIRA that you set up.

From an SDIRA, your IRA can lend out funds on non-prohibitive parties' deals. but you would not be able to lend money to yourself for your own investment opportunities. IRAs can own physical property. There are some guidelines that apply to all IRA investments that you will want to pay particular attention to when investing in physical property. As for the custodian, If you are limited to SDIRA accounts a custodian will be necessary for any of the investments. If you are eligible for a Solo 401k you may not need one, depending on the set up.

Hello Cesar, I have House hacked a few duplexes, and I always start with running the number as if it was purely a rental property. I look at Net Cashflow, cash on cash. Although the plan is to house hack now, you may want to move out in the future and will want the property to continue to cash flow if you hang on to it. But know that house hacking can be a bit forgiving because you should be reducing your overall expenses, favorable financing, cheaper insurance, etc either way.

As far as property types, small muti families are good options. If you go the SF route, try to find a place that you would be able to live comfortably with roommates.

Hello Ronald,

Unfortunately, for a property you own personally, you would not be able to put this into a self-directed IRA account to get the benefits. If you set up an SDIRA for your wife, you can use it to purchase a new investment property. Then you would be able to defer taxes on sales.

Separately, a 1031 exchange could be an option for you to defer the capital gains tax, by exchanging this property for another investment property. This wouldn't help much in paying off your primary home but would save you from paying the taxes now.

Hello @Karen Salem, Definitely speak to a professional CPA or Tax advisor in the SDIRA space, so they can guide you in the direction you would like to go. From what is described in your post, Checkbook control/ IRA LLC would help alleviate the pain points you mentioned. There is nothing that prohibits you from picking finishes or shopping at Home Depot. The issue is related to the feasibility of the custodian correctly issuing payments/ investment expenses, and Home depot wanting an immediate payment.

Yeah, obviously advice may vary based on the attorney or advisor. I understand the arguments as to why they are cautious. However, nothing expressly prohibits the IRA from owning a MH. As Taylor L mentioned, Only life insurance and collectibles are prohibited asset classes.

Hello, John

There is nothing that would not allow for a SDIRA to own a mobile home. The Custodian for your SDIRA may have a hard time administering that asset for a couple of reasons. I would think most would recommend holding the MH in a checkbook control LLC for your SDIRA. This way the LLC manager has the ability to sign for title, or go to DMV/ government office in person for the MH. Something your IRA admin would not be willing to do.

Hello Amanda,

The JV agreement could be a viable option. You could also look into making the IRA account a debt partner, structuring the investment as a promissory note.I have seen notes that will add language about receiving an upside based on the returns of a project. Either option should eliminate the issue of IRA holders not being able to personally guarantee financing (non-recourse).

Hello Jon,

This may be a policy of the custodian you are working with. From personal experience operating agreements can vary greatly. The most important factors for the operating agreement for the LLC owned by your SDIRA are correct IRA vesting as the owner of the LLC. Clearly defined that the LLC is 'manager managed' and the manager listed. There are some other details but this should be the two main things the custodian is looking for. The ERISA/LLC attorney requirement may be there way of mitigating any risk to them.