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Self-Direction Part 3 of 4

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Previously, we discussed retirement accounts in general and how to turn them into self-directed accounts. Once you’ve gone that far, you’re ready to invest. You can use those funds in the exact same way you’d use your personal cash to do any deal. There really is no limit to the kinds of investments you can make. However, “how” you make those investments IS a big deal and can get you into trouble.

NOTE: Self-Direction is an advanced real estate investing technique with a lot of nuances. This blog is meant as general information and not legal, tax or investing advice. You will certainly need more education and advice to truly understand this amazing technique.

If you do what is called a “prohibited transaction” you could face the possibility of incurring penalties, which for an IRA could be add up to the entire amount of your IRA. So this is a very important topic. And not one that can fully be explained in a short blog. This is meant to bring your attention to the issue. I always recommend seeking legal counsel if you are unsure about a certain investment.

At it’s core, the IRS does not want you to unlawfully
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Self-Direction Part 2 of 4

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This is Part 2 of our 4-part series on Self-Direction. In our previous blog we covered retirement accounts generally. Here, we’ll cover how to make them self-directed.

NOTE: Self-Direction is an advanced real estate investing technique with a lot of nuances. This blog is meant as general information and not legal, tax or investing advice. You will certainly need more education and advice to truly understand this amazing technique.

First, if you self-direct (we’ll call it “SD” from here on) an IRA, that account MUST sit at (be deposited with) an IRS-approved SD custodian. There is no way around this. So, your first step is to set up an account at a SD custodian. This is pretty easy, or even done online. You then either make a contribution and/or move (rollover) your current IRA money. Then, your IRA money is in place that will allow you to invest it in real estate immediately by “directing” the SD custodian to make an investment in your IRA’s name. This is usually a form to fill out, submit to the custodian that will then facilitate the transaction. SD custodians typically charge a yearly f
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