27d • General discussion
If you have an old 401k or SDIRA and you're planning to use it on your own real estate deal, STOP.
You're about to disqualify your entire IRA.
Most people don't know this rule. Self-dealing is a prohibited transaction under IRC 4975. If you use your IRA to buy a property you'll live in, fix and flip yourself, lend to your own LLC, or invest in any deal where you or your family benefits personally, the IRS treats the whole account as distributed.
Translation: you owe income tax on the full balance. Plus a 10% penalty if you're under 59 and a half. The retirement money you spent 20 years building, gone in one transaction.
The right move isn't to do your own deal with it. The right move is to lend or invest passively into deals that are arms-length from you. Stable yield. Quarterly distributions. Tax-advantaged inside the IRA wrapper. Zero operating burden.
Take Ellen, as an example, a high-income corporate professional. Had $100K parked in a money market inside her SDIRA, doing nothing. We placed it into our cash-flowing real estate business at a fixed yield. Quarterly distributions on schedule. No phone calls. No K-1 surprises. She goes back to her career and the money works.
We can help you do the same.
If you've got retirement funds sitting idle and you've been wondering how to put them to work without blowing up the account, drop "SDIRA" in the comments.
I'll DM you the plain-English guide on how to do this, plus the structure we used for Ellen.
Doug
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If you have an old 401k or SDIRA and you're planning to use it on your own real estate deal, STOP.
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