Self Directed IRA
Investment in an LLC
July 30th 2006
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Real Estate IRA |
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A truly self-directed IRA is one where the IRA owner does not have to
filter every decision through a self directed IRA custodian. The vast
majority of IRAs are not self-directed. Most banks and other, major
financial institutions only offer the traditional IRA custodian
relationship. This means that your investment actions are limited by
their plan documents more than by the actual IRA laws.
A self-directed IRA is governed by a plan document that seeks to comply
with the letter of the applicable federal laws while retaining as much
freedom as possible. One plan for expanding that freedom is the
formation of an LLC within an IRA. This arrangement gives the IRA owner
the ability to write checks for investments rather than having to ask
the IRA custodian to write checks--and then paying the required fees.
Such self-direction can be a powerful tool in the hands of an
experienced investor. It can also be a powerful tool for
self-destruction in the hands of an inexperienced, "whim" investor. To
get the most from a self-directed IRA, an investor has to be willing to
perform due diligence on every investment opportunity. You may have a
good advisor who can help you avoid costly mistakes but they will not
take the time to do your research for you.
When Is the Time to Open a Self-Directed IRA?
Any time is a good time to open a self-directed IRA, but you should not
start wheeling and dealing with retirement until you have learned how to
consistently make money with your money. Starting a relationship with an
IRA advisor is a good idea because they can help point you in the right
direction. You cannot expect them to do your work for you, however, so
you have to want to study and learn the ins and outs of investing in
alternative investments.
Joshua Geary
For more
information on how to invest in real estate with a Self Directed IRA,
then visit
http://www.MyRealEstateIRA.com. Asset Exchange Strategies, LLC is
currently featured in Forbes - see the June 2006 Forbes Investment Guide
on newsstands right now or you can search for "The IRA Steps Out" in
Google.
Books on Investing
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Bufett
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