A Self Directed IRA's ownership of a LLC, referred to after this as "ICO" ("I"RA "Co"mpany), is a special purpose limited liability company, which is either fully or partially owned by a self directed individual retirement account (IRA). Since the self directed IRA owns the ICO, IRA funds can be legally transferred to the ICO in exchange for member units (shares) of the ICO. After this funding, both traditional and non-traditional investments may be purchased by the ICO instead of directly in the IRA.
A Self Directed IRA via a LLC (ICO)allows you to hold real estate or other non-traditional investments in an IRA with checkbook control. Very few IRA custodians permit direct ownership of real estate or other non-traditional investments in an IRA, so indirect investment via the ICO is usually the only choice.
When the ICO sells real estate or other investments, the capital gains are deferred through the IRA, like any other IRA investment. The headaches of 1031 exchanges are never necessary.
Ownership of the property in an ICO allows you, as manager, to have direct, hands-on control of and investment decisions over ICO assets, including control of the checkbook. Custodian involvement and hassles are eliminated, regardless of whether the investments are in securities, real estate or other assets.
An ICO can use its IRA funding as a down payment for a real estate purchase, with the ICO financing or borrowing the balance. But an IRA cannot directly participate in such a financing arrangement.
Since you control and handle all ICO transactions, the custodian for the IRA can be paid an inexpensive, flat fee, typically under $200 per year
Litigation threats which accompany investments such as real estate are substantially reduced. This is done by isolating the investment inside the ICO, and away from the rest of your IRA funds and estate.
Continues to provide deferral of income and gains inside the IRA.
Create the LLC (NAFEP Creates the LLC along with a very unique and special operating agreement). You can operate as the Manager.
Transfer IRA to custodian (NAFEP helps you do this)
Setup checking account at a local bank
Direct the ira custodian, American Estate & Trust, to transfer money to LLC in the form of purchasing membership units in the LLC
Direct investments from the LLC
Investments
Real Estate
Hard money lending
Precious Metals (Gold, Silver, Platinum)
Private placements or offerings (oil & gas, real estate, etc)
Foreign Real Estate
Funding a business
Trust deeds
And Many Others!
IRA Custodian
The use of a qualified IRA custodian is required to complete this process. NAFEP uses the services of its sister company American Estate & Trust. The benefits to using us and our Trust company as your IRA custodian are:
Experience - dedicated to dealing with self directed IRA accounts
Flexibility - focused on providing self directed IRA account services tailored to the needs of the self directed IRA account holder
Seamless integration - NAFEP and American Estate & Trust are owned by the same principals with common support staff, so you will get a completely integrated, one-stop solution for your self directed IRA needs
