Real Estate IRA Custodians
Traditional IRA custodians (usually large financial institutions offering investment or annuity products of their own) are usually quite strict when it comes to investing IRA funds in real estate. They would prefer you to choose simpler investments in which they have more experience (like their own financial products or those of a subsidiary). With the recent round of corporate financial shenanigans, however, more people are looking at non-traditional IRA investments.
The largest class of non-traditional IRA investments is real estate. It is also the one that has generated the most interest. Real estate has the advantage of being more than numbers on paper representing commercial potentialities. The trick to investing IRA funds in real estate lies in finding an appropriate custodian. You want a company that will allow you freedom in investing without over-charging you to death.
The most popular type of retirement account for investing in real estate is a self-directed IRA LLC. Such a structure allows you to have checkbook control over the account and the assets therein. You can move swiftly on real estate opportunities without having to run them by your IRA custodian. You can also pay all related expenses directly from the IRA without incurring numerous custodial fees.
IRA Custodians Versus IRA Advisors
A custodian controls your account and tells you what you are allowed to do with it. An advisor gives you control and dispenses advice for keeping within the bounds of the law. Do not expect an advisor to hold your hand and walk you through every step of each investment, though. Self-directed accounts can be favorable to everyone but if you do not have at least some experience and understanding of the law you can get yourself into trouble.
Written By Scott Janko, The National Association of Financial and Estate Planning (NAFEP)
For more details on the Self Directed IRA -ICOSM Click Here.