You might consider using a specialized Limited Liability Company (LLC) to invest in real estate or other non-traditional investments with your IRA funds. There may be some grand benefits for you and your IRA with this type of option. The following is valuable information regarding five of the benefits that an LLC enjoy in conjunction with IRA investing:
CONTROL
It is possible to have your IRA invest in an LLC managed by you. As the manager, you decide which investments the LLC will make, and there are no fees for each and every investment by the fund administrator. Once you become the manager of the LLC, you hold the checkbook and can now make timely investments that otherwise would be difficult to make. When structured correctly, an IRA LLC should not pay any transactional, asset or holding fees.
FLEXIBILITY
With a self-directed IRA LLC, or real estate IRA you have the ability to choose from many investments and execute them quickly. If you find the perfect investment and need to put money down immediately, you can. There is no waiting for a Custodian to approve the paperwork. This allows you to participate in investments like tax liens, which are difficult to invest in without the flexibility provided by an LLC. Additionally, if you want to trade futures or options, you can establish a brokerage account for your LLC. You would not be able to do this directly using your IRA funds.
LEVERAGE
Using leverage can increase the buying power of retirement account funds. Kenton Becker, an investment mortgage specialist with experience in loans to IRAs explained "Using an LLC structure enables an investor to obtain higher loan amounts at better interest rates. Additionally, it allows for the building of credit within the LLC. That means as time passes, an LLC is able to garner more leverage and even better pricing, allowing for even greater returns inside a tax free or tax-deferred retirement account."
ASSET PROTECTION
An LLC is governed by state law. In every state neither the LLC manager nor the LLC members have any personal liability for liabilities incurred by the LLC... if you are personally sued, the assets in the LLC are protected. This protects your retirement!
MULTIPLE INVESTORS
Through an LLC, any number of investors can purchase unit interests. This can give your retirement funds extra buying power. If structured correctly, you can even personally participate as an investor in the LLC, as well as your friends, family, and business associates.
If you are going to use this strategy, make sure you enlist the help of a company that has experience setting up these types of structures for self-directed retirement accounts. Making a mistake with retirement funds can be costly. Guidant Financial Group is the nation's leading Retirement Account Facilitator and has specialized knowledge in this area. Our structures include continuing legal support and handle the process from start to finish so there is no room for error.
More Information: Self Directed IRA LLC & Small Business Financing
