Thursday, March 10, 2011

Self-Directed IRA Is Now Profitable

Last year, I started the process of converting one of my IRAs to a self-directed Roth IRA. It took about 5 months to get it all set up, but it's been rolling along for a while now. I'm pleased to say that, as of last month, it has become profitable. What I mean by that is I incurred about $3,500 in setup expenses to get the everything transferred and the LLC set up. With last month's hard money payment, I have now recouped all those setup expenses and the IRA is now out of the red.

I also recently changed jobs and am now working on rolling my Roth 401(k) from the old job into my self-directed IRA to give me some more capital to invest with.


Reno Real Estate Blog said...


Thanks for the tip. I already studied the benefits of a ROTH IRA but need to convert to action, sooon!

Wouldn't it be awesome if we could put more than $5,000 per year? =(

But oh well, can't complain.

Anonymous said...

Hi Shaun,

Do you lend to the San Jose - Peninsula area. If not, is there any hard money lender you would recommend?


Shaun said...

My partner works that area. Leave me your email in a comment (I won't publish it so no one but me will see it). Give me some background as to what you are doing and the property in question. I should point out we almost never lend more than 70% LTV.

Bob said...

Hi Shaun,

I notice a lot of your Bay Area investors get their properties through the foreclosure auction. Is that the most efficient way to get discounted properties when using cash? Do you know if other methods have any success in the Bay Area such as direct mail to defaulting home owners, bandit signs or even out of the MLS?


Shaun said...

Yes, most of the people we work with get their properties via foreclosure auctions. It's probably easier for them. No need trying to track down homeowners or working with emotional people. It's a pure business deal.

Here in AZ, I did try going the route of sending postcards to people about to be foreclosed on and didn't get a good response. Many of those people are in denial and may be emotionally attached to their home. It's more work to deal with people like that. I wrote about my postcard efforts here, so if you are interested, do a search.

Auctions also wipe out all subordinate debt, so if the first is foreclosing and doesn't sell for enough to pay it off in full, the second is wiped out. That helps the buyer/investor too.

Personally, if it we me, I'd stick to auctions.

I also forwarded your email to my partner in CA.

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