Frequently Asked Questions about CompleteIRA and Retirement Accounts with Checkbook Control

Our FAQ section was created so you can see common questions (and their answers) about self directed retirement plans in general, and why we are so confident that CompleteIRA is the right choice to make. Choosing an account type is another page designed to help you find what will serve your needs best amongst the various kinds of accounts.

We hope you find this very helpful and easy to use. If you are not able to find the answer to your question, please contact us so that we may answer you personally.

How does my IRA invest in real estate or other investments?
IRA/401(k)/403(b)/SEP/SIMPLE/ESA/HSA/MSA accounts can all be moved to a self-directed custodian allowing all sorts of investment options such as private stock, notes, tax liens, real estate, and businesses to name a few. All of these can be inside an account without tax consequences if done correctly. No capital gains tax on the sale of the land, no penalties for making such an investment. Just freedom.

Is this legal?
Yes it is. You may reference the IRS website directly at www.irs.gov. We've taken some relevant highlights from publications 560 and 590 and made them available near the bottom of our supporting documents section. The IRS is neither for, nor against, using your retirement funds in alternative investments. Just as they are neither for, nor against, stocks and bonds. The valuable tool of an IRA owned LLC has two decades of legal precedent to support it.

Why haven't I heard of it before?
Who would tell you? Your stockbroker? Wall Street will only let you invest your IRA in investments that pay their firm. A bank may suggest CDs while a insurance company will offer you an annuity. The traditional investment community has control of over 97% of retirement accounts; and they make their living off those accounts. Why would they let you know of alternatives that wouldn't benefit them? The accounts we create not only enable real estate, and physical metals, but all available investments.

How can my $50,000 IRA buy a $200,000 house?
Just as most people use a loan to get the property they desire, an IRA is able to get a loan (see our page on the topic for important differences between an IRA and 401(k) in this area). There is no limit to the quantity of properties your account can have loans on at once. No credit checks, no income requirements, and you are leveraging money. If $50,000 can secure a house for five or six years that you sell and make $100,000 on you've earned a 200% return that was backed by real property. How does the stock market compare with that?

How can I learn more about investing my funds in places other than the stock market?
"IRA Wealth" by Patrick Rice is an excellent first stop. It is a book that stands out in the self-directed world. The first edition does not cover the advanced strategy we employ of the LLC, but the principles are all applicable. If you'd like an autographed copy just send us an email and we'll get one on the way. It also talks about buying notes instead of property; something we have done with success and can recommend. "The RV Lifestyle" by Richard Parker is another great choice.

What is a Self-Directed Custodian?
A custodian is required by the IRS to "hold" your retirement account. A self-directed custodian allows you to fully direct the investments of your IRA or 401(k) that they are "holding" for you. Many custodians claim that they allow you to self-direct your IRA investments but then only let you invest in publicly traded assets (like stocks on E*Trade). A truly self-directed IRA allows you to make the decisions without restriction. It is important to have quality assistance (like CompleteIRA) to help stay in compliance.

What is a CompleteIRA retirement account?
It is the best tool for putting you in full control of your IRA or 401(k) assets. You won't have to ask your custodian to approve an investment, wait for a check to be written and mailed, or pay an annual filing or administration fee for each investment. You'll truly have a self-directed IRA or 401(k) because you'll have a checkbook controlling all your retirement dollars which are in a retirement account owned, specially created, LLC. Additionally, you'll save money each year as the custodial charges are much lower this way. An active investor will save thousands, or tens of thousands, over a decade with this approach.

What can I invest in if I have a CompleteIRA?
Almost anything. Your IRA LLC can make any investment a regular LLC can as long as you stay away from insurance policies, collectibles, and s-corps. Further, you may not have any "self dealings" without a DOL exemption, which is unlikely and rather expensive. Basically everything else on earth is allowed.

My IRA is small. Can I personally co-invest with my IRA?
It is not a prohibited transaction for you to co-invest with your IRA. However, there are certain formalities that need to be adhered to and it isn't advised. Most people who attempt it fail, and that spells disaster for the account. There are much better ways of co-investing than mixing IRA and personal funds. We will gladly assist in this area.

Can my IRA co-invest with friends?
Yes. IRAs may hold interests in various investments with other retirement accounts, businesses, or individuals. It is important to be aware who is a prohibited party to your IRA, as those people can't co-invest easily with your IRA.

Can I be the property manager of my IRA's Real Estate?
That depends. With just an ordinary self-directed IRA the answer is no. In fact you can't even change a light bulb on the property. The CompleteIRA LLC structure allows you to perform limited maintenance on the property, advertise for renters, collect and deposit the rent checks, pay the real estate bills, etc. This clearly saves your IRA a lot of money and helps provide a more comfortable and prosperous retirement for you. There are limits, and things that you can't do, so please talk with us prior to taking action.

May I use my IRA funds to make improvements or renovations?
Yes. In fact, you must use IRA funds to make any improvements and pay all expenses associated with the property. All expenses of the property are paid with IRA funds; and all profits made on the property become IRA funds. This makes sense because it is an IRA investment.

Can I buy vacation property?
Yes. Doing so would not constitute a prohibited transaction. However, you cannot vacation there. You must rent it out to other people until such time as you are retired and can take the home as a distribution. Anything your retirement account purchases must be an investment, and not something to benefit you now or in the future. Though in practice as long as the purchase is a legitimate investment, if you distribute the property and decide keep it at retirement there is no reason that would be faulted.

Can I buy my dream retirement home with my IRA and then live in it when I reach the age of retirement?
Yes. Your IRA would be the original owner. You would use your IRA money to make the purchase and maintain the property. Any rents generated would be returned to the IRA. Upon reaching retirement age the property could be distributed to you. Please review the prior question as the same caveat applies.

What's this all going to cost me?
A better question is "What's it going to save me?" We helped a client setup a real estate closing so that $100,000 of profit went into a Roth CompleteIRA. We had to hustle to finish the paperwork in time but that effort saved 35% in taxes meaning they had the entire $100,000 to reinvest as soon as the check from the Title Company arrived. A savings of $35,000 and they have checkbook control the rest of their lives! In another situation, a group of doctors were looking to open a new practice with 20% of the earnings going straight into their Roth accounts without having to worry about income limits or matching funds for employees.

Do you have any presentations or files I can look over?
Yes. Our presentations section has several excellent presentations to look over. The section also has several PDF files available for you to review; including supporting IRS code, and memos with related highlights to Roth owned LLCs.

We are the only firm that offers both basic self-directed accounts, self-directed accounts that feature checkbook control; and both in IRA and 401(k) form. This keeps our interests aligned with yours. Instead of trying to figure out how to get a square peg in a round hole, we just offer the option of a round peg too.

Our pricing is fair and reasonable. Our support, flexibility, and knowledge base set us apart from the crowd. We hope this has been helpful, and look forward to serving you.

Call us today to invest in your future; on your terms.