It is possible to use your IRA to get into real estate wholesaling? In this episode, Don Costa answers this question with wealth lawyer and award-winning entrepreneur Mat Sorensen of Directed IRA. He presents how to use your retirement accounts to put your self-directed IRA into action, securing financial freedom for your later years in life. He explains how to effectively work with private money lenders, the right way to avoid Unrelated Business Income Tax, the benefits of putting up an LLC, and how to think outside the box to find more real estate opportunities.

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Can You Wholesale Houses With your IRA? With Mat Sorensen

In this episode, I have Mat. Mat, how are you doing? What’s going on?

I’m living the dream every day but excited to be here and talking about some of my favorite things. Maybe we can get to it using an IRA or 401(k) to buy real estate. You don’t just have to buy crappy stocks, bonds, and mutual funds with an IRA. You can buy real estate if you want.

Backstory And Career Path

We’re going to dive into that. Tell me a little bit about your backstory. What got you to where you’re at?

I’m a business and tax lawyer by trade. That’s what I went to law school for and what I did for years. I still have a law firm. We have 60 employees and 4 offices. We primarily represent entrepreneurs, real estate investors, and business owners. That was our niche. Even within that, I have clients coming to me like, “I want to use my IRA to buy real estate.”

It’s a common thing for particularly entrepreneurial people. We have a lot of real estate investor, developer, and contractor clients. I had never even heard of it. It wasn’t on the bar exam. I didn’t hear it in law school. I had never even heard of that strategy. I had to freaking figure it out. It was in 2006 when there wasn’t a lot out there. What I eventually ended up doing was figuring out there was nothing out there on this. There’s not even a good book on it.

 

 

I decided to become a subject matter expert on it. I spoke at all the conferences, ended up representing half of the industry as a lawyer, and wrote the number one book in the space. We have our company where we custody the IRAs and have $1.5 billion in assets and 15,000 accounts. We open 30 new accounts a day. I’d say about half of those clients are investing in real estate in some form or fashion with their retirement accounts.

I was attracted to it because there was this untapped demand and there was no messaging out there about how to do it. There wasn’t a lot of guidance that was very good. I felt like I could bridge that gap. There’s $35 trillion in US retirement accounts. I knew it was a huge opportunity. I freaking chased it down. I do this myself. That’s the other thing.

I love real estate as an investment. I’ve always performed better in my investments in the real estate space. I invest my retirement account in real estate deals, too. That’s the Reader’s Digest version of it about how I got to where we’re at, running our company on directed IRAs, still having a little offer, and having business and company compliance. I have a lot of stuff going on. That’s the gist of it for me, where I started, and where I’m at.

I’m going to hit you with some questions. I know some things you probably can’t go into full detail on seeing as how the subject matters. If I hit on something and you’re like, “It’s better to have a one-on-one conversation,” that’s a fair answer. I want to let you know that. We’re talking about using IRAs. The three things I want to hit on in this conversation are using your IRAs to invest in real estate and also using it to loan.

Using Retirement Account To Invest

In that same conversation, I’m going to want to know how people can approach potential lenders. The last one is something that comes up a lot in conversations. Can you wholesale out of your IRAs? The first question is if somebody wants to utilize and start a retirement account to invest in real estate, what are some of the ways that they can do that?

The first thing is most people who are coming to this strategy already have retirement account dollars. They’re like, “I got that old employer 401(k) that has mutual funds in it. I don’t even know the names of it. I got these IRAs at TD Ameritrade. I bought a Tesla.” They’re like, “I never knew I could even do real estate. I’ve got this pot of money.”

Some people already have a little sliver of the $35 trillion like themselves. For them, my message is, “If you think you’re better at real estate, you have a competitive advantage.” You believe in real estate, whether it’s cashflow, appreciation, or however you’re going to make money. This could be short-term or long-term deals. You’d be flipping a property or doing buy-and-hold rentals. Think of that money as a vehicle you could use to grow and have a bigger retirement account.

 

If you’re thinking about your retirement account in real estate, it’s the same thing as your retirement account for stocks, funds, and mutual funds. This is long-term wealth building. You can access it at $59.5. I’m trying to make it a bigger retirement account when you’re in your 60s, 70s, and on than by using real estate because it can buy better returns in a bigger account.

That was me at first. When I got into this strategy for myself, I bought a buy-and-hold rental. I have 150-plus employees. I can’t go out and do deals. I’m not a deal-maker in real estate. That’s not my thing but I love real estate. I buy-and-hold rentals and did well. That increased the return and made my account bigger than if I had stayed in the crappy mutual funds that I was in before.

Honestly, I couldn’t even tell you the name of what those funds were. They have hundreds of thousands of dollars invested in this. People put it off the table and don’t think like, “I can’t move the needle on that. It is what it is.” No, you could get control of that and put it into real estate. That’s that first category there, thinking about growing your account so you have a larger retirement account later on. There are other facets of that but that’s the first facet to it.

My understanding is that you can’t lend to yourself out of your retirement account. Can you buy an asset like real estate out of your retirement account, like you’re directly buying it?

Yes, that’s what I did with the first rental with my retirement account. We’re doing this every day. We’re opening up 30 new accounts a day and half of them are doing real estate. Every day, we have 15 people at least buying real estate in their IRA. What they’re doing is saying, “I’m over at Fidelity. I have an old 401(k) at Fidelity. I can buy stocks and mutual funds. I want to buy real estate, Mat. I want to buy a rental or flip a property. It doesn’t matter what the strategy is.”

I was like, “Let’s get that $200,000 that you have over at Fidelity over to a self-directed IRA where you can buy real estate.” It’s still an IRA or a retirement account. You’re not paying taxes or loaning yourself the money. You’re just saying, “I’m going to move my retirement account to a place like a directed IRA,” and that’s what we do, “Where they’ll let me buy real estate with it. My retirement account goes and buys the real estate. It puts the money down and owns it.”

It will get the income on it if it’s rental income or gets the gain when you sell it. It’s going into your retirement account. It’s not going in your 1040. You’re not reporting anything to the IRS. It’s not taxable yet. Your stock trading account or 401(k) grows and invests but it doesn’t hit your tax return. How to think of it is we’re still using a retirement account. It’s just self-directed in the sense that you have a provider that says, “I’m not going to force you to buy stocks, bonds, and mutual funds because we’re a broker-dealer, and that’s all that we sell,” which is what most people have.

We’re going to say, “Buy real estate, invest in a private fund or private equity deal, buy crypto, or invest in a VC thing or a startup.” That’s what you can do with a self-directed IRA. Your account owns the asset. It gets the income and pays the expense but also, this is growing off of your tax return for long-term wealth billing that you’ll draw on later in retirement once you hit 59 and a half.

I’m sure there are layers because my first thought is, “I’m going to flip a property and buy the asset in the IRA. I need the funds for the rehab. Does the IRA cover those as well? Is that a loan? What happens if I use my funds personally for the rehab expenses?” I’m sure there are a few landmines there that somebody’s going to watch out for in that strategy.

You have to learn the rules for this. I like to tell people that self-directing IRA isn’t rocket science but it’s at least a board game. You got to read the rule book and the board game before you play it. You want to know some of the rules. Yes, your IRA could go buy the property and you could get a loan to fund the rehab, whether it’s from a private investor or a bank but that loan needs to be what’s called a non-recourse loan.

Self-directing IRAs are not rocket science but a board game. Click To Tweet

One of the rules when your IRA is getting debt to either acquire or improve an asset and buying that house you’re going to flip, and you need to rehab it, is you cannot guarantee the debt. That causes something called a prohibited transaction. You can’t go sign and get the debt under your name, Don, but your IRA can get the debt and do what’s called a non-recourse loan. If the IRA defaults and doesn’t pay the lender back, the lender’s recourse is only against the asset they lent on.

They can foreclose and take the asset. They can’t come after the IRA or Don personally. That’s the type of debt you can get. You have a partner in it that puts in cash. It gets a share of the equity. There’s lots of different ways you could do it. If your IRA has the cash entirely to do it, it could do it but if you can get mortgages and private lenders, it has to be what’s called this non-recourse loan if you bring in debt, though.

Becoming A Private Money Lender

Going to lending, you can be a private money lender out of your retirement account. Let’s talk about that. How does something like that work? On the flip side, how would somebody find people who have retirement accounts and go about doing it ethically to work with people who have retirement accounts?

This strategy is big, not just for people who have retirement accounts. If you’re like, “Don, I don’t even have a retirement account. I’m 25 but I do real estate and I want to fund deals,” there’s $35 trillion in US retirement accounts that other people have to lend you money. These would be your private money lenders. They happen to have it in an IRA or 401(k). Where everybody’s money has been invested in America. There’s more money in US retirement accounts than in any other place.

Knowing the strategy lets you tap into that $35 trillion so that they can be a lender to you. If you’re in real estate and you’re like, “I got a deal and I need $150,000 to fund this rehab,” I want you to think of the ten people you might know in your network that you would go to ask for that money, especially if you’re brand new. I’m telling you that you’re going to get the money way faster if you ask if they have an IRA or 401(k).

If you’re looking for the $150,000 they have sitting in a savings account ready to go to invest it to you, it’s maybe if you have a high net worth group of friends but otherwise, it’s likely in an IRA or 401(k). I was sitting at this desk here doing a webinar with one of my clients. He’s done over 250 flips here in Phoenix. He says 2/3 of the money that he uses to fund his flips is from IRAs. That’s just because he knows the strategy. He asks them, “Do you have an IRA or 401(k)? You could use that in this deal and I’ll pay you 12% interest.” They’re like, “I don’t think I’ve ever broken 10% in my 401(k) or IRA. Please.”

The nice thing about that money, if you’re on the other end of borrowing it, is this is long-term money. When someone’s lending you money from their IRA or 401(k) and plans the bank, when they’re done with that deal, they don’t want that money back to buy a car, go on a vacation, or start a business. They’re like, “Can you put it in the next deal? Do you have another one?” It’s long-term money for them. They can’t touch it until they’re 59 and a half.

 

If you’re someone doing deals, work with these people who have IRAs or 401(k)s. Let them lend the money to you and pay them interest in points, whatever you negotiate. That’s an amazing source of capital to get deals done. I won’t give his name but I had one of my pretty well-known clients in the real estate space who raised money for a fund on multifamily. Ninety percent of the money he raised came from IRAs and he was blown away. This is just where people have their money. Knowing this strategy will help you unlock that and get your deals funded faster.

You can be a little more competitive in the terms you can get because you’re going to have more access to capital. I love the strategy from that standpoint of accessing the capital to get deals for you. You’re doing the deal in your LLC and business. You’re making money and tapping into other retirement accounts. They’re getting a win because they’re getting a higher rate of return than they could have gotten by being in the stock market or whatever they were doing before. It’s a win-win. You’re getting deals done and making money. They’re getting a better return than they’d otherwise typically get in the stock market. It’s freaking awesome.

You asked, “How do you find those people?” It’s funny. I spoke at a conference called Real Estate Investing for Dentists, the most generic and boring name. There were 500 dentists in a room who invested in real estate and were interested in it. There’s a Facebook group of 10,000 plus of them. It’s a pretty awesome group. I taught them this strategy. I’m like, “You can use your IRA or 401(k), real estate, and lend other people money that wants real estate.” After I was done, I was back at my table.

I’m telling you, there was a line of people lined up. These are dentists. Most of them have pretty big retirement accounts. They were like, “How do we find people that have deals that we can lend our money to?” The next week, I go speak to a group of real estate investors and they’re like, “We got deals. How do we find people that will lend us money?” I’m like, “You guys are hanging out with the wrong people and going to the wrong conferences.” If you want to fund deals, go show up at the Real Estate Investing for Dentists Conference or find those people who have that money.

 

It’s maybe the next conference I go to.

Yes, seriously. I think of it that way. Don’t think of your other group of people who are doing real estate deals that also are trying to get real estate deals that might be your circle. They might have networks and other people that they found a good lender for that could be a great reference, and that’s possible. You need to go to the place where they’re looking for people like you. They don’t have that.

These are people you know, particularly if you breached the IRA or 401(k) topic. If you’re like, “Do you have $100,000? I need that to fund a rehab,” someone might be like, “Maybe I could peel that off. I don’t know. My wife might get a little angry at me.” If they’re like, “It’s in my IRA or 401(k) in a mutual fund I don’t even know about,” you’re much more likely to convert that person because they’re like, “This money I’d had, I haven’t even thought I could use it or burn it. It was sitting in a 401(k) in a mutual fund or an IRA in stock I don’t even follow.” Knowing the strategy also opens up the network of people you know.

The takeaway I got from that one was to think outside the box about where you’re going and make sure that you’re looking for opportunities to put yourself in the room where people have a need for what you have to offer.

I’ve transitioned too from point number one where we talked. I use my retirement account, as an example here, to go buy buy-and-hold rentals. What I’m doing is I’ve sold those deals. I’m privately lending my money to other real estate investors. I deposited a check and it only got paid off. Luckily, it’s clearing but I’m wiring it right back out. I’m going to walk to the bank. This is in my retirement account, which owns an LLC 100%. It’s called an IRA LLC. We do this structure.

That LLC is going to lend the money right back out on the next deal to the same investor on a new deal. It’s another property but a new deal. It’s 12% interest in two points. When I find a good operator like this, I’m like, “Get the money back out.” For them, they don’t need to go find someone else again. They’ve got enough deal flow. I got the money.

Once you get that locked in, it’s a great relationship because, for the retirement accounts, it’s long-term money. Your friend might want that money back to go do something else, buy a second home, improve their house, buy a cool new car, or go on a cool vacation. With the retirement account, I’m like, “Can I get the money back out tomorrow? Seriously, I want to get a return on it.” Once you get that lined up, it becomes easier.

Setting Up An LLC

You hit on something and I want to unpack that a little bit. I’m not as familiar with it as I probably should be but you’re talking about setting up an LLC. When I borrow from lenders, in 100% of the rehabs I do, I always do private money. A lot of them use their IRA accounts to lend. There’s a process you have to go through to make that happen. If you have the LLC structure in place, then you have a little more freedom about how quickly you lend that money out, is what I’m hearing.

I’m the CEO of the company. I sit in the chair and I can push the buttons. We have two-party controls. One of the personnel has to authorize. I can send them money easily. I use an LLC because it’s easier and faster. It’s an easier process at title, XYZ investments, and LLC. It’s so simple. What you can do is have your retirement account own an LLC 100%. This would be a newly set up LLC. It’s called an IRA LLC. My law firm sets them up in connection with our trust company-directed IRA. He does the IRA account.

You still have two things. You have a self-directed IRA that invests into an LLC 100%. That LLC has a checking account. That cash goes into the LLC business checking account. You’re the manager of the LLC and also the signer on the checking account. You don’t own the LLC at all. Your IRA owns LLC 100%. The IRA will put its money in the LLC. When I’m going to fund a deal, I wire the money from the LLC business checking account. I got paid off. They send a check and I hate it.

I deposit that in the LLC business checking account. That money is so much easier for me to do a deal because it’s in my LLC’s name. I wire it back in and out. It’s a faster process even for me, let alone a customer outside. If you have a private money lender, there’s a form they have to submit and authorize it. They review the note and maybe the mortgage or deed of trust. There’s a little process and delay in it. That’s us, too. We’re doing that. We try to be very fast and efficient. We have a lot of clients that still have private money lent out of their account without an LLC.

If you’re someone who lends regularly and you want to do that, use an LLC. If you’re someone flipping a property, and we talked about scenario one earlier, or even doing buy-and-hold rentals, use an LLC. Especially if you’re going to rehab a property, you’re going to be paying a contractor, paying this person, and buying materials. You would want to do an LLC bank account. It’s so much easier. That’s a pretty cool strategy.

The nice thing about the LLC is it’s a single-member LLC disregarded entity. There’s no tax return to the IRS. You have to keep the LLC active in whatever state you’re in. It gives you this “checkbook control” where if you own the retirement account, that IRA money gets into the LLC business checking account. You’re the manager of the LLC. You don’t own it. You’ve got control of the LLC to enter into deals, wire the money, and control the checkbook.

There is no tax return to IRS LLC. If you keep it active regardless of the state you are in, it gives you checkbook control. Click To Tweet

I’m assuming there are some things somebody would need to make sure they’re properly doing. They probably can’t utilize the funds for anything personal and different things like that. You always make sure you cover before they do anything like that. If you’re going to do that, I want to say on the show, from my point of view, you need to operate one of these and be very diligent about operating it properly.

I wrote a book called The Self Directed IRA Handbook. It sold 30,000 copies. It’s the number one book in the space on this. I got a whole chapter on the IRA LLC and how to operate it properly. My law firm is KKOS Lawyers. It’s $1,200 to set it up. We do a consult. We have a lawyer who goes over what you’re doing and the rules. They make sure you understand what you’re doing, which you need on the front end. This is what I’m saying. You don’t need a lawyer all the time.

This isn’t rocket science. Think about it more like a board game. You just need to know the rules. Once you know the rules for the type of deals you’re trying to do, it’s the same thing over and over again. A little education on the front end is critical because if you screw it up, you can have what’s called a prohibited transaction and that ends up disqualifying your retirement account. It becomes taxable. You could have penalties. It’s nasty. You want to make sure you’re following the rules and not jacking it up.

Wholesaling From An IRA Account

The last question that I have is the concept of wholesaling from your IRA account. I’ve had people say that it can be done and I’ve had people say that it can’t be done. I’ve heard probably everything in between. The idea is we enter into a contract to buy a property. We use the IRA funds for the EMD. We go ahead and assign that to an end buyer. The end buyer closes and the assignment fee goes back into the IRA. Is that something that, in your opinion, can be done? Is that an offline conversation? What is that?

We don’t need to go offline with that. You can do that. You could do a wholesale deal. There are a couple of things you want to know but you could do it. We’ve had thousands of clients do that with their retirement accounts. I would do the LLC structure for that too because a lot of times, you’re moving fast on those deals. It’s easier at title, get paid off, and everything. You could do it right out of the IRA but I recommend the LLC. You get an IRA that best sets up an LLC 100%.

The LLC is on a contract with the buyer. It could be assigning the contract or getting a wholesale fee. That goes right back into the LLC bank account and go do the next one. It gives you that transactional flexibility that you’re going to be faster to execute on a wholesale deal. There’s one thing to know, though, with wholesale deals. There’s this tax that can sometimes hit an IRA called UBIT or Unrelated Business Income Tax. When Congress created it, they said, “You don’t have to pay taxes on your retirement account when it makes money.”

Think of you flipping a property with your retirement account. The IRS said, “Let’s say you make $10,000 on it and that goes back into your retirement account. It doesn’t go on your 1040.” Congress has said, “As long as that is income investment, we don’t make you pay taxes. If that deal causes business income, and this is the unrelated business income tax that applies to IRAs, we will charge you a tax of 37% on the income.” This is the tax return the IRA ends up having to file. It’s not on your 1040. It’s a separate return. You have to pay this tax. It’s a pain in the butt.

In real estate, you can run into this UBIT issue if your retirement account is deemed to be in the business of real estate as opposed to investing in real estate. Investing in real estate is easy on buy-and-hold. It’s rental income when you own it. It’s capital gain income when you sell it. That’s investment income. When you’re private money lending, it’s interest income or points. When you’re flipping a property, it’s short-term capital gain. When you’re wholesaling a property, it can also be short-term capital gain.

On flips or wholesale deals, you just can’t do a lot of volume because the IRS can look at that and say, “That IRA is in the business of flipping or wholesaling properties. It does 1 a month and it’s done 12 this year.” Our rule of thumb is if you’re in the 2 to 3-a-year flips or wholesale deals in the retirement account, you’re not going to hit this UBIT issue at all because it’s going to be investment income. It’s a short-term capital gain. If you’re doing a deal a month, you’re going to have UBIT.

Once you’re over five or more deals, we’re going to have this UBIT issue and you should probably talk to a competent tax lawyer or CPA like, “Do I need to worry about this or not?” If you’re doing a few of them a year, I wouldn’t even worry about this. It becomes a volume issue. Yes, you can wholesale. I would use that LLC structure to put you in control to do the deals. Be careful of doing too many deals per tax year because you could roll into this unrelated business income tax, which is a 37% tax, which sucks.

When using an LLC structure to take control of your deals, be careful of doing too many deals per tax year. Otherwise, you could roll into unrelated business income tax. Click To Tweet

The strategy that I see most of the time is they’re running a wholesale or flipping operation. Every once in a while, they peel one off and do one through their IRA.

They pull the best ones out. It’s not the dollar amount you’re making. It’s the volume. Don’t do the one you’re going to make $1,000 on. I’ll give an example. One of the reasons I decided to write my book, and I’ve told the story before, but I had this client who had $10,000 in a Roth IRA. There are different types of IRAs. There are traditional accounts. You get a tax section and put it in. It grows but when you pull it out, you pay taxes as you’re drawing it out at retirement. In a Roth account, you put your money and don’t get a tax section but it comes out tax-free at retirement.

I had this client. He ended up having some traditional dollars. He converted them to Roth, which you could do. He’s like, “I want to get an option on a piece of property.” This was a real estate developer. He put $10,000 down from his Roth IRA with an option to purchase a property. This was agricultural land up against a highway. What my client knew was that the county and state were going to put an exit off of this highway right there. It was planned to happen in the next five years. My client got the option to purchase this property for $450,000 from the landowner.

At the time, the property was maybe over $350,000. The guy that owned the property was like, “You want to give me $10,000 and I’ll give you the right to buy this property for $450,000 and that expires in 5 years.” My client was like, “That’s the deal.” He’s like, “Done. Let’s do it. I’ll take your $10,000.” My client didn’t do that personally. He did it from his Roth IRA. He put the $10,000 down.

2 to 3 years passed and he had the right to buy it at $450,000. The highway exit comes in. This property went from agricultural to highway commercial. There’s a service station there, a subway, and the typical things you see off a highway exit. That property went from being worth $350,000 to being worth $1.5 million, just land. My client’s a developer but he didn’t want to develop it. He only had $10,000 in Roth. He sold the option to another developer for over $1 million profit. That $1 million went back into his Roth IRA, zero tax. This client was in his 50s.

That was a cool deal. I was like, “He only put $10,000 in.” He was a sophisticated investor. He was choosing the right deals to put in that account, particularly a Roth, which he paid zero taxes on. I remember when this was closing at the end. He called me and was like, “Go over and make sure I did it all right because I don’t want to blow this up with the IRS. I want to make sure I’m doing it right.” I’m like, “Yes, it’s all good.” We finished the call and he was pissed off.

I was like, “How could you be upset? We rock this, zero tax.” He was pissed off because nobody told him about this very early. He’s like, “I’ve been in real estate for this long. I have a financial advisor, a CPA, and a top law firm. Not one of those morons told me, ‘You’ll make money in real estate. Did you know you could use your retirement account to do this and even use a Roth IRA to do it tax-free? These idiots are telling me to buy mutual funds. I have no idea which ones to buy.”

It was this connection of all these different things that happened. In real estate, you have a competitive advantage there. Invest in that. If you’ve got good deals, you can cherry-pick, like what we were talking about the wholesale deals or this little option to an example I gave. Put those in a Roth account where you pay zero tax on it. It’s a pretty cool strategy.

For people who are new to it, it’s like, “This is a lot.” Once you learn it, there are a lot of different facets to it. Invest in what you know and grow your wealth in real estate if that’s what you know. Access other people’s retirement accounts. There’s $35 trillion in it. Use the Roth account. Your money can grow tax-free and you can make money tax-free, and not hit your 1040 at all, by doing strategic deals that are the big windfalls in your Roth account. Rather than personally, that’s going to hit your 1040.

I’ve heard an urban legend in a meeting years ago. I don’t know how true or untrue it is. In retirement accounts, you only have so much money you can put in each year other than what you’re making in returns. It was a situation where somebody had purposely overfunded their retirement account, used that money, turned it around and invested it, made a substantial profit on that investment, and then had to pull that money back out because they had gotten called out for overfunding it. They were able to keep the profits in their retirement account. That was a strategy that they had done every once in a while on purpose. It didn’t seem like that was possible but I wanted to throw it out if that was something in reality.

That’s not a strategy we promote. I’d put that in the urban legend category, too. You pay taxes and penalties when you do it but it’s not worth that. Some people have tried that and I’ve seen it promoted out there, too. That’s not something I would recommend. I do think there are vehicles, particularly for real estate investors, where you can get more money in and you don’t have to overfund it. You can put $7,000 in an IRA a year. That’s the 2024 contribution amount. You can still make your 2023 and 2024 contributions. You could do $6,500 or $7,000 in 2023. It’s $13,500 you could put in in 2024, assuming you didn’t put money in 2023. That’s not going to get you very far.

It’ll take you a while of contributions if you’re someone at zero. A lot of people have this old employer 401(k) or old IRA they’ve hired for twenty years or something. That’s, frankly, where most of the money is self-directing. For a real estate investor, that’s like, “I’m making money. I’m self-employed. I want to get money into this retirement account. I don’t have the old employer 401(k). I don’t have a retirement account. I’ve been a real estate guy. I haven’t cared about retirement accounts but now, I’m interested.” We get this all the time.

What I recommend for those clients is called a solo 401(k). It’s like a 401(k) plan for yourself because you’re self-employed. You have your business and such great employees. You can create this 401(k) plan for yourself. You can put $69,000 a year into those. That’s ten times what you could put into an IRA. I can go $69,000 a year into that 401(k). Within a few years, you could have a couple hundred thousand dollars of contributions in there, not to mention the investment returns where you could grow it, which is unlimited but there’s no cap on that.

If you’re someone that’s like, “I’m self-employed. I don’t have this old employer 401(k) or IRA I’ve had for years,” I would look to do the solo 401(k). It works best for self-employed people. You have to be self-employed with your business with no employees, other than spouse, partners, or family. That’s the solo 401(k). It’s pretty awesome. We set lots of those up.

 

Is there anything that I didn’t ask you that you feel we need to add to this?

Closing Words

Don, be careful with that question. I got a full-day thing on this. I’ll mention that I got my self-directed IRA summit, SDIRASummit.com. That’s a full-day conference on learning self-directing. We’ve got tons of free resources at DirectedIRA.com. We do webinars. I’ve spoken to your mastermind, Don. I’m out there speaking, too. I got my book that’s $20. You can buy it on Amazon or my site. It’s The Self Directed IRA Handbook. That’s a real book on this.

Some people frankly have crappy books. It sold 30,000 copies. Half the industry that does what I do buys my book to train their employees. The national association in my industry buys the book for their certification training program. I’ve got a good book out there if you want to dive deep into it. If you talk to your CPA, lawyer, or whoever it is and they’re like, “I don’t know if I can do that. I don’t believe what you’re saying,” get them in my book. I got all the citations and stuff to back it up.

If somebody wanted to reach out to you and had questions, where would they go? Are the websites the best place to go or email, phone number, or anything you want to add?

DirectedIRA.com is the best place. You can hit schedule a new account appointment right there and talk to one of our senior account reps or managers about setting up a new account. “Does this work in what I’m looking to do?” If you have someone who wants to lend you money on a deal and you need to help unlock that money, we do it for you. We’ll open the account and get their transfer and rollover done. Our team will take care of you there.

It’s an amazing conversation. I appreciate it. I would check out Mat and his team, what they have going on, and what they have come out with. He spoke at our mastermind or one of our meetings. It was a community member who brought him to my attention, which means he comes highly recommended by our community. Check out what they have going on. I appreciate your time, Mat. Thank you very much.

My pleasure. Thanks, Don.

 

Important Links

• Mat Sorensen
• Self-Directed IRA Handbook
• KKOS Lawyers
• SDIRASummit.com
• DirectedIRA.com
• The Self Directed IRA Handbook – Amazon