Wholesaling with A Self-Directed IRA (Avoid Any Traps Waiting for You!)

[@ClareMartinez-mj6qe]

I am so glad that I ran across these videos when I did. I'm a rookie real estate investor. I haven't inked a deal yet so there's no room for any of the pitfalls Mr. Coons detailed. I will definitely be working with Anderson Business Advisors. I hired a two coaches and paid for two courses from a couple of industry giants. They were brilliant in teaching how to identify motivated sellers and what types of land to prospect and sell to a variety of buyers. The cursory get an LLC because you're a homeowner was the only advice I received regarding structuring the business. After watching these videos I now know I need a C Corps in my home state a Marketing LLC in Wyoming and a wholesale trust in the states I work in. I binge watched these videos. Best time investment I made in furthering my business development.

[@ClintCoons]

Clare Martinez Thanks for watching.

[@Real.Estate.Report]

I've never heard of this concept before! I knew you could buy real estate out of a self directed IRA just didn't know you could wholesale. Awesome!

[@ClintCoons]

Glad it was helpful!

[@glenmatthes8839]

I've been looking at using my IRA funds to invest in real estate. I saw all the problems you mentioned here. The biggest tidbit I saw was that if anything even looks like it's a "straw man", where you control the IRA and you "control" whatever entity is doing the investment, there's a high likelihood that the IRS will say "game over" and destroy your IRA in the process. That puts even the C-Corp suggestion at risk since it's still a "straw man" between your IRA and your active investments. One thing I did learn is that it's only the specific IRA that engages in the prohibited transactions that gets blown up. So if you're not sure or you're feeling sorta lucky, you could put *some* of your retirement funds in a self-directed IRA. Then, if that does blow up, you don't zero out all your retirement funds. Compartmentalizes the risk. The biggest thing I took away from all of this is that you cannot in any way, shape, or form, actively manage your real estate investments if your IRA money is involved. EDIT: Found this after some looking: www.irs.gov/pub/irs-wd/9936012.pdf It's the interpretation of "Step Transactions" . Basically everything Clint describes in this video becomes that. In my opinion, I believe the C-Corp scenario would also be a step transaction since, as the owner of the IRA and controlling part of the C-Corp are the same person. "The step transaction doctrine is a rule of substance over form that treats a series of formally separate but related steps as a single transaction if the steps are in substance integrated, interdependent and focused towards a particular result. Penrod v. Commissioner, 88 T.C. 1415, 1428 (1987)."

[@Jfacc333]

Clint, great video, what about assigning contracts in a "Roth IRA LLC" product? Any advice there?

[@ClintCoons]

This would be a PT. I would recommend against it.

[@starr8111]

Clint is soooo sharp hope that never ends

[@ClintCoons]

😂😂

[@samdarnold3563]

Nice video!

[@sambutta]

Great info!!!

[@ClintCoons]

Glad it was helpful!

[@miker8527]

Thank you for mentioning the committee change over. Yes, he who controls the purse strings makes the rules. Either way, I would not use IRA or this types of vehicles in any format. You dont want that letter, We would like to inform you we are auditing recent activities and transactions.....

[@ClintCoons]

I agree and it is why I prefer a Solo 401k.

[@deanmarten]

Very good video

[@ClintCoons]

Thanks

[@JUICYTBONE]

So what's the best way to set this up if your a wholesaler? Paying least amount of taxes of course.

[@ClintCoons]

Use an LLC owned by your SDIRA. The LLC should be treated as a C-Corp for tax purposes.

[@FreddyPoveda]

Hi Clint. Thanks for a great video..What do you think of wholesaling done with an LLC owned by a solo401k ?

[@ClintCoons]

Same issues as I raised in the video. It could be construed as active income.

[@starr8111]

Off topic if i have a solo 401k do i really need to open a self directed roth ira for anything even real estate investing

[@ClintCoons]

No you can invest through the solo 401k.

[@chrisbusuego]

Can’t I just wholesale deals thru my LLC and then higher contributions to my Solo 401k?

[@ClintCoons]

Yes you can.

[@eldonbirth5429]

Can't you wholesale in a LLC and sell the contract to the IRA and flip the property in the ira

[@ClintCoons]

No that would be a prohibited transaction. You would need to run the entire transaction through the IRA

[@bstanart]

Wow! I’m thankful that I have a solo 401(k) after watching this video

[@jerrykid4972]

how about cryptocurrency investing and buying real estates with those gains?

[@ClintCoons]

Not an issue.