Get Self-Directed!

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I have been a contractor/investor for over ten years. I have used other people’s money to buy, rehab and resell homes. I sometimes pay my investors a pre-determined rate of interest for the use of their money. Sometimes I pay them a piece of the action. For example, if I make a profit of 20%, I pay them 20% on their money. Needless to say I have many repeat investors.

I was working with a new investor the other day. She said that she needed a couple of days to transfer money from her retirement account. I was surprised to hear that one could use retirement money for investments. I was under the impression that once one touched the money, one would be penalized and have to pay taxes to boot!

She said that her retirement plan was self- directed. I have never heard of such a thing. She said that she could buy and sell real estate and not have to pay any capital gains. She said that she even owned income-producing property and that the monthly income went right into her retirement account.

She said that I should set up my own self-directed IRA because I do so much flipping. She said that I wouldn’t have to pay capital gains tax every time I sold a property. It sounds really good to me. Almost too good to be true!

Have you ever heard of such a thing?

Contractor Carl

Dear Carl,

Local icon, Wendell Robie once told me, “Sue, it’s not what you make, it’s what you keep!”

Selling real estate in a self-directed IRA allows you to keep 100% of your profit. Your new investor friend is right-on. You can buy and sell real estate without paying any taxes as long as the money and or property remains in your self- directed IRA.

A self-directed IRA is ideal for your particular situation because you “flip”. For those of you that invest in real estate, you know that in order to defer taxes, a holding period of at least a year is required.

You cannot only sell real estate, you can make loans, buy a business or even stocks.

I use PENSCO out of San Francisco. Their company was referred to me by an investment person from Bank of America.

I would suggest getting online and getting started today. It will be a matter of good Home $$s and Sense!