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IRAAdvantagesThe self-directed IRA LLC provides an investment platform where you can manage your retirement investments with the same flexibility and control you use when managing your non-retirement investments. Our self-directed IRA LLC includes a self-directed account and a customized and conforming Limited Liability Company (LLC), which gives you:
How it Works!Our self-directed IRA LLC provides an investment platform where you can manage your retirement investments with the same flexibility and control you use when managing your non-retirement investments. Our self-directed IRA LLC includes a self-directed account and a customized and conforming Limited Liability Company (LLC), which gives you:
Who Can Benefit?
Self-directed IRA LLC is a smart investment choice for investors who have around $50,000 or more in their retirement account or less if the investor intends to make numerous smaller investments that would typically incur substantial transactional, holding, and administrative fees with a custodian. FAQ's
Without question! The Employee Retirement Income Security Act of 1974 (otherwise known as ERISA) essentially passed the responsibility of retirement saving from the employer to the employee. IRAs were created in 1975 to provide individuals a chance to direct where their retirement funds were invested. Rather than delineating which investments are allowed, the IRS code instead identifies which investments are not permitted under these laws. There are only two types of investments excluded under both ERISA and IRS Codes: Life Insurance Contracts and Collectibles (such as works of art, rugs, jewelry, etc). Refer to Internal Revenue Code Section 401 (IRC § 408(a) (3)). If my brother is not a disqualified party, can I buy a house and let him rent it from me? Theoretically, yes. Your brother is not a disqualified person. However, as in the scenario mentioned above, if he occupied a rental property owned by your IRA and could not make the payments, you could run afoul of the exclusive benefit rule. This could cause your IRA to have participated in a prohibited transaction. It is important that you treat every investment the same, to benefit your IRA and only the IRA. Can my IRA buy real estate that I currently own? Even though there are companies which claim you can, this is strictly forbidden under IRC § 4975. There are many great real estate transactions available so do not put your retirement account at risk by engaging in a "self-dealing" transaction such as this. Can I use leverage to buy real estate? Yes! Leverage is a very powerful tool when purchasing real estate. However, there are unique requirements when using a self directed IRA and leverage. The "prohibited transaction" rules state that you as a disqualified person cannot extend credit to an IRA or IRA asset. This means that if your IRA gets a loan on a piece of real estate –you cannot personally guarantee the loan. This would be viewed as extending credit. Refer to IRC § 4975(c) (1) (B) for more specific information. An IRA must secure what is called a non-recourse loan. This type of loan is given solely based on the property. A bank who lends money this way is lending money based on the investment rather than lending to a borrower who has a great credit score. Because banks do not have any recourse against the IRA or IRA holder, they typically require a high down payment. In the past we have seen banks require 50% down with marginally high interest rates. Banks are not in the business of foreclosing on homes, so they need to make sure if your self-directed IRA cannot make the payments that it is in a protected position and will not lose its investment. To rectify this type of situation, facilitator has built a working relationship with a national banking institution which will require as little as 30% down with very reasonable interest rates for non-recourse loans in all 50 states. Can I be the property manager for real estate held by my self-directed IRA? If you have a "traditional" self-directed IRA then the answer is no. Using our Self-Directed IRA LLC, you can manage the property, collect the rent, screen tenants, perform general maintenance, and more. This can save your IRA hundreds of dollars each month and ultimately provide more investment capital for ongoing investments. Can I mix personal funds with IRA funds to purchase a piece of real property? Yes, if it is structured correctly. You must be very careful to whom you are listening. The prohibited transactions code prohibits an individual from using personal or IRA cash to benefit the other. This can be easily violated through "formation issues". If you are considering using your personal funds to invest in real estate with your IRA either through Tenant-in-Common or a Partnership Entity, consult with our group first. Do not be a test case for an inexperienced professional. How do I find a realtor, CPA or mortgage lender in my area who knows about self-directed IRAs? Costa Rica Retirement Vacation Properties has been doing self directed IRA's for years. We are aligned with the best sources for a seamless and careful execution of these programs. Once we are contacted our people will identify the best course of action for you and you will connect you directly with our professionals who handle your specific. You will deal with one person and will be walked through the entire process very smoothly and properly. |
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