Have you ever heard your broker tell you that you can buy stocks, bonds and mutual finds inside your retirement account? Of course, just about all of us that have retirement accounts are told by the account team what we can and cannot buy.
My retirement account custodian, Charles Schwab, told me (well not Chuck himself) that I can by anything in my Schwab IRA as long as it was stocks bonds, mutual finds or CD's.
Great, I bought guaranteed 5% CD's that mature in 5 years.
That was 4 years ago.
But did anyone every tell me that if I had a retirement account with another company that I could by real estate or anything - including stocks, bonds, etc? Nope! I came across this by accident and haven't looked back since.
Now I buy and sell real estate and my retirement plan is the owner.
I write checks for down payments from the retirement account without waiting to talk with a custodian.
Let me explain.
I am a real estate investor in PA.
I have bought apartments, single family homes, vacant land, REO's, Short Sales and I currently own property in CA, FL and PA.
Until about two years ago, I used to buy real estate in my own name (actually as joint tenants with my wife of 35 years).
I came across the notion of a self directed IRA.
I thought cool, I can make my own decisions on what to buy, even on weekends when the broker is closed.
SO I signed up with one of these providers called Equity Trust.
Many of you may have received their spam to become clients.
I soon found that in addition to their very high yearly account fees that I have to get them to do the paperwork for all my real estate transactions and even though I can buy real estate inside their version of the self directed IRA it is actually very far from being truly self directed.
I still have to work on on weekdays during their business hours, their timing, they have to issue checks - it's not much better than the IRA at Schwab.
So I went on a search again only this time I wanted to find out for sure if there was a truly self directed, custodian-free account with any one out there.
To my dismay, there is not.
However, there is little known statute that our senators and congressmen and women take advantage of to use for themselves to stuff away (contribute) almost $50 grand a year into the account and at the same time they can write a check to buy things from the account including real estate or anything except "collectibles".
The name is familiar sounding yet a bit of a twist on what you've heard before.
It is a 401(k) plan called a "Solo 401(k) Plan" that is for small business owners only (you know, those of us that buy and sell properties periodically).
Our congress made this for themselves.
I say this accusingly because they did it so quietly that hardly anyone noticed it.
They can start up a new business, say SenatorGeorge, LLC.
to do business in DC.
They have no full time employees - a few unpaid interns and most likely their spouse is a member of the LLC.
(If you don't know what this paragraph means - do a Google search on LLC's).
Then they apply for the "Solo 401(k) and in a few weeks they get an IRS letter with their new identification number for their newly formed Solo 401(k) plan.
Now the senator and his or her spouse can "contribute" up to $49,000 of their pretax income into their new Solo 401(k) plan and they can even rollover their old 401k plans into this new one.
If they are over 55, they can jointly "contribute" over $100,000.
to their new solo 401(k) plan.
Now they also have a checking account at a regular FDIC insured deposit institution (bank) that they can write check on to put a deposit down on a property or to buy the precious metals or diamonds or whatever they choose.
Then when the property that is in their plan is worth more than when they bought it hey can sell it with zero taxes.
Is this cool or what! If you have a 401k or other retirement account and would like to open the flood gates to buy real estate, please sign up on my buyers list below and I will point you to the attorney forms that set these up for me.
My retirement account custodian, Charles Schwab, told me (well not Chuck himself) that I can by anything in my Schwab IRA as long as it was stocks bonds, mutual finds or CD's.
Great, I bought guaranteed 5% CD's that mature in 5 years.
That was 4 years ago.
But did anyone every tell me that if I had a retirement account with another company that I could by real estate or anything - including stocks, bonds, etc? Nope! I came across this by accident and haven't looked back since.
Now I buy and sell real estate and my retirement plan is the owner.
I write checks for down payments from the retirement account without waiting to talk with a custodian.
Let me explain.
I am a real estate investor in PA.
I have bought apartments, single family homes, vacant land, REO's, Short Sales and I currently own property in CA, FL and PA.
Until about two years ago, I used to buy real estate in my own name (actually as joint tenants with my wife of 35 years).
I came across the notion of a self directed IRA.
I thought cool, I can make my own decisions on what to buy, even on weekends when the broker is closed.
SO I signed up with one of these providers called Equity Trust.
Many of you may have received their spam to become clients.
I soon found that in addition to their very high yearly account fees that I have to get them to do the paperwork for all my real estate transactions and even though I can buy real estate inside their version of the self directed IRA it is actually very far from being truly self directed.
I still have to work on on weekdays during their business hours, their timing, they have to issue checks - it's not much better than the IRA at Schwab.
So I went on a search again only this time I wanted to find out for sure if there was a truly self directed, custodian-free account with any one out there.
To my dismay, there is not.
However, there is little known statute that our senators and congressmen and women take advantage of to use for themselves to stuff away (contribute) almost $50 grand a year into the account and at the same time they can write a check to buy things from the account including real estate or anything except "collectibles".
The name is familiar sounding yet a bit of a twist on what you've heard before.
It is a 401(k) plan called a "Solo 401(k) Plan" that is for small business owners only (you know, those of us that buy and sell properties periodically).
Our congress made this for themselves.
I say this accusingly because they did it so quietly that hardly anyone noticed it.
They can start up a new business, say SenatorGeorge, LLC.
to do business in DC.
They have no full time employees - a few unpaid interns and most likely their spouse is a member of the LLC.
(If you don't know what this paragraph means - do a Google search on LLC's).
Then they apply for the "Solo 401(k) and in a few weeks they get an IRS letter with their new identification number for their newly formed Solo 401(k) plan.
Now the senator and his or her spouse can "contribute" up to $49,000 of their pretax income into their new Solo 401(k) plan and they can even rollover their old 401k plans into this new one.
If they are over 55, they can jointly "contribute" over $100,000.
to their new solo 401(k) plan.
Now they also have a checking account at a regular FDIC insured deposit institution (bank) that they can write check on to put a deposit down on a property or to buy the precious metals or diamonds or whatever they choose.
Then when the property that is in their plan is worth more than when they bought it hey can sell it with zero taxes.
Is this cool or what! If you have a 401k or other retirement account and would like to open the flood gates to buy real estate, please sign up on my buyers list below and I will point you to the attorney forms that set these up for me.
Source...