Prohibited Self-Directed IRA Investments
Since the launch of Freeland Ventures back on June 1, we have been talking a lot about Self-Directed IRA’s and how can you invest in real estate with one and advantages that they have. Today, I wanted to quickly touch on some prohibited investments that you CANNOT use your Self-Directed IRA for.
When investing in IRA’s, most people think stocks, bonds and mutual funds. They never really think about other nontraditional assets because the big-time brokers can’t make money selling them so they only suggest big investments to get their commission.
For the most part, the IRS does not review or approve investments. They do not advise people on how to invest, but they are a few prohibited investments they do not allow:
- Collectibles – any tangible personal property like artwork, rugs, antiques, metals, coins, gems, stamps or alcohol.
- Life Insurance Contracts – according to the IRC 408 ruling, you cannot invest in life insurance contracts with an IRA
- Stock in a Subchapter S Corporations
These are really only the big prohibited investments, so virtually anything else is an option. My friends and I that use our Self-Directed IRA accounts will not invest in anything that yields lower than a 10-15% return. I enjoy investing in LLC’s and corporations and real estate, but I won’t look at something unless it’s getting a 12% or more return.
There are so many investments out there that can yield that kind of high return, why settle for anything less?
Freeland Funding Student Case Study
About a month ago, we introduced you to our Freedom Funding student, Nick Zalonis, who is currently working on his first flip at 2035 Clarence Dr. in Lakewood, Ohio. He purchased the house using a Freeland Lending loan for $65,000 and we are putting $42,000 worth of work into. Comps in the area show the list price will be around $174,900 when complete.
The home used to be a multifamily, but we are going to turn it into a beautiful, big single family home. The houses in Lakewood have a lot of old charm like beautiful hard wood floors and built-in’s that will remain to keep the old charm of the house.
Let’s take a walk through the property with Nick now to see how it’s coming along:
We will be following up soon with the progress of this property.
Exclusive Invite to SREC’s Flip & Fund Summit in Dallas, TX
If you haven’t heard already, SREC is hosting their next live event in Dallas, Texas the weekend of August 28-30. This is an exclusive event that we hold just students and only 80 spots are available based on the size of the ballroom we booked.
This is an event any real estate investor does NOT want to miss – you will spend the weekend with me and my team reviewing everything you’ve learned through SREC, comparing notes and master minding new techniques and ideas.
I’ll be sharing the stage with 13 experts that are made up of faculty and advanced students and we will be able to answer any questions you may have because chances are, we’ve ALL been there.
I also want to share with you four FREE videos I just created that covers raising private money and how to obtain high value private lenders. There is SUCH a high demand for training on these topics, so if you want to learn even MORE, using the promo code “SEC70” purchase your Dallas Flip & Fund Summit ticket for 75% off!
Watch my four videos on the blog site now.
Hopefully I’ll be seeing you in Dallas!
Be Daring,
Josh
CEO Strategic Real Estate Coach
CEO Freeland Ventures and Freeland Lending
CEO Yellow Jacket Properties
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