Category Archives: Health Savings Accounts

Real Estate Options Contracts In An IRA


I received a copy of the Notes from the Options seminar and in section II “Types of Options” you mention using an option with a Deed in Escrow. My question is would the Deed held in Escrow be signed/executed by the seller and buyers just as I would find any other typical deed in the county land records (of course it would not be filed).   If the option is not exercised, is the deed simply torn up or is there a clause in the Deed that nullifies the Deed if the Option is not exercised…  And with IRA’s and HSA’s, would the escrow agent/company be Quest IRA, Inc…or any agreed upon third party escrow agent?


Yes, the deed would be signed, notarized and escrowed.  The deed in escrow language outlines the procedure.  Since Quest IRA, Inc. in this case is only a representative of your IRA we would not be an appropriate escrow agent.  You would need to find an independent third party such as an attorney.

Follow Up Question:

Is the deed in escrow language found in the Option or in a separate document separate from the deed.  And does the language govern the signed deed whether the deed is good(valid) or not based on the Option being exercised?   And if not valid, does the signed deed get shredded by the escrow agent?

Follow Up Answer:

Ultimately it is up to you and your lawyer to decide how to handle it.  On our options disk of forms, which are for example purposes only and are not to be confused with legal advice, I have the attached examples of additional paragraphs you might or might not want to include in your option agreement.  The deed in escrow is paragraph 5.

I sense that you are seeking absolute answers on options.  Unfortunately there are none.  Options are simply too flexible.  You have to structure the option for the way you want to use it. 

If you are interested in purchasing the disk, please contact Ryan Kimura in our Dallas office.  He can help you out.

The Amazing Health Savings Account – The Best of Both Worlds

By Nathan W. Long

By now most people have heard of using self-directed IRAs to make purchases other than stocks, bonds, and mutual funds.  Companies like Quest IRA, Inc., operating out of Houston and San Antonio, have been doing a good job, through a series of free education seminars, of teaching people about using self-directed IRAs to buy real estate, foreclosures, foreign property, invest in notes, deeds of trust, private stock, limited partnerships, LLCs, and other non-traditional assets.  In examining some of the other government sponsored savings vehicles available for investing in non-traditional assets I discovered the highly under-utilized Health Savings Account (HSA).  Before my recent employment with Quest IRA, Inc. I did not know that you could purchase non-traditional assets with a Health Savings Account (HSA).

A Health Savings Account is a powerful investing tool that many people overlook.  Because it is the only account where contributions are tax deductible and qualified distributions are tax free, it is the best of both worlds.  Furthermore, the definition of “qualified medical expenses” is fairly broad.  IRS Publication 502 has an available list of qualified medical expenses. These include a broad range of medical, dental and vision expenses, but generally do not include the cost of health insurance premiums.  You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law (COBRA) as qualified medical expenses for HSAs. If you are age 65 or older, you can treat insurance premiums (other than premiums for a Medicare supplemental policy, such as Medigap) as quailed medical expenses for HSAs.

In order to be an eligible individual and qualify for a Heath Savings Account you must have a High Deductible Health Plan (HDHP), you cannot be enrolled in Medicare, and you cannot be claimed as a dependent on someone else’s tax return.  Recent changes in HSA rules allow you to contribute the maximum amount to your HSA even if your deductible is less than that amount.  If you are an individual the amount you can contribute for the year 2007 is $2,850 and for a family it is $5,650.  In addition, if you are over the age of 55 you are allowed an $800 catch up contribution.  Unlike other plans you may have heard about, the amount you put into a Health Savings Account is allowed to rollover from year to year and the profits on any investments with the money are tax deferred.  When the money is used to pay or reimburse for qualified medical expenses the distributions are tax free.

The knowledge of how to invest with a self-directed Health Savings Account from Quest IRA, Inc. allowed me to do some amazing investments this year.  I have a High Deductible Health Plan (HDHP) for my family.  This health plan works well for me.  I personally like high deductible insurance policies. My family rarely turns in a claim on most of our insurance policies.  Because my family is financially stable, in the event of an accident or major illness paying a few thousand dollars would not be a problem. Over the years I have saved a lot of money by using high deductible insurance policies.  When I discovered that Quest IRA, Inc. offered self-directed Health Savings Accounts I saw a great opportunity.

This year my wife needed extensive dental procedures.  The cost went well over $5,650.  The insurance company did not pay because it was a dental procedure and I don’t carry any dental insurance.  I opened an HSA with Quest IRA, Inc. with a maximum deposit of $5,650. I could have immediately taken a distribution for my wife’s dental expenses, effectively negotiating a discount on the dental bill equal to my marginal tax rate.  Instead I chose to leave the money in the HSA and invest the money in partnership with my son’s Roth IRA and my wife’s Roth IRA to purchase a note secured by a first lien on real estate.  The note was for 12% with a 2% origination fee and all costs were paid by the borrower, including Quest IRA Inc., fees, with an 18 month balloon.

I can add $5,800 again to the HSA in January of 2008.  As the money grows I can take any amount of money out of the account as long as I have qualified medical expenses, including dental or vision expenses, to be reimbursed.  Since I already have a large amount of dental bills I just keep these bills along with any others in a file.  When I want to withdraw some money for any reason I just request a reimbursement for the expenses regardless of the year the expenses were incurred, as long as the expense was incurred after opening my HSA.  That being said, don’t make the same mistake I made.  I opened my HDHP at the first of the year but waited to fund my Quest IRA Inc. HSA until I could fund it fully.  My wife had some of the dental work done before I opened the HSA.  The work done before the HSA was opened will not qualify for a tax free reimbursement.  If I would have simply opened the account with a small amount then funded the rest later in the year I could have used those expenses as well.

If in the future we decide that a HDHP is not good for our family we can switch to another plan.  We will not be able to continue to contribute to the HSA, but we can keep the HSA open and withdraw the money out as needed tax free for qualified medical expenses.

If I had just paid for the dental expenses out of my pocket like I originally planned to, I would have lost the opportunity for a $5,650 deduction on my taxes and the opportunity to make a great investment. Remember, I can take the money out as my investments mature and gains on the investments can be withdrawn tax free. Like we always say here at Quest IRA, Inc., “You don’t have to think outside the box, just realize the box is bigger than you think!”

Self-Directed Health Savings Accounts – Building Wealth Through Health

By H. Quincy Long

By now you have probably heard of the Health Savings Account (HSA).  What you may not know is just how amazing this type of account actually is, in terms of premium savings, tax savings, and, most importantly, what you can invest in with your HSA.

Qualification Requirements.  In order to have a Health Savings Account, you must be an “eligible individual.”  To be an eligible individual, you must 1) have a High Deductible Health Plan (HDHP); 2) have no other health coverage, with certain exceptions; 3) not be enrolled in Medicare; and 4) not be claimed as a dependent on another person’s tax return.

While a full description of a HDHP is beyond the scope of this article, its key features are a higher deductible than many insurance policies and a maximum limit on the out-of-pocket expenses (including the deductible and co-payments, but excluding the premium payments).  For 2008, the minimum deductible is $1,100 for self-only coverage and $2,200 for family coverage, and the maximum out-of-pocket expense is $5,600 for self-only coverage and $11,200 for family coverage.  All major insurance companies offer HSA compliant plans.  Employers may also offer an HSA compliant plan, since these policies tend to be less expensive.  If the employer makes contributions to your HSA it is excluded from your income.

Premium Savings.  Because of the higher deductibles and plan features, HSA compliant plans tend to cost less.  When I switched from a policy with a $2,000 general deductible and a $200 drug deductible to an overall deductible of $2,200, the premiums for my family were reduced from $754 per month to $450 per month.  That’s a total premium savings of $3,648 per year!

Tax Savings.  One of the best features of an HSA is the tax savings for contributing to the account.  Beginning in 2007, the contribution limit is no longer tied to the deductible.  The contribution limit for 2008 is $2,900 for self-only coverage and $5,800 for family coverage.  To the extent you make the contribution (as opposed to your employer), these amounts are fully tax deductible, no matter what your income.  If you are age 55 or older, you may contribute an additional $900 for 2008.  There is even a one time ability to take a distribution from your IRA to fund your HSA with no taxes or penalty.

In my tax bracket, the ability to deduct my contributions is significant.  I will contribute $5,800 for 2008 and save $2,030 on my taxes.  The total benefit to me for switching to an HSA compliant health plan, considering the premium and tax savings, is $5,678 for 2008, which nearly covers my $5,800 contribution!
Distributions from an HSA for “qualified medical expenses”, which are broadly defined and include expenses for yourself, your spouse and your dependents, are tax free forever!  Because the expenses only have to occur after the HSA has been established, virtually everyone will end up with qualified medical expenses at some point in their life.  You can take a qualified distribution at any point after the expense is incurred, even in later years, provided you keep track of the expenses.

Investment Opportunities.  Even better than the premium and tax savings is the ability to invest your HSA funds in non-traditional investments, just as you would in a self-directed IRA.  Many banks and other companies offer the convenience of an HSA account with a debit card for you to pay medical bills with.  However, if you are healthy and don’t have a lot of expenses or you can fund the expenses out of pocket, you can make your HSA account grow much faster with investments other than mutual funds or savings accounts which may pay very little.

With a self-directed HSA, you choose your HSA’s investments.  Common investment choices made by self-directed HSA participants at Quest IRA, Inc. in Houston, Texas include real estate, both domestic and foreign, options, secured and unsecured notes, including first and second liens against real estate, C corporation stock, limited liability companies, limited partnerships, trusts and much more.  For example, I combined my 2007 HSA contribution with my 401(k) and other self-directed accounts to fund a hard money loan with 2 points up front and 12% interest per year.

The Health Savings Account is truly the best of all worlds.  It can significantly reduce your health care premiums, reduce your taxes, and produce tax free wealth through non-traditional investments in a self-directed HSA.  With a self-directed HSA (or IRA), you don’t have to “think outside the box” when it comes to your HSA’s investments.  You just have to realize that the investment box is much larger than you think!

How to Pay for Education Expenses With Tax-Free Dollars

Many people are under the mistaken impression that a Roth IRA is the only type of self-directed account from which tax free distributions can be taken.  However, distributions from Health Savings Accounts (HSAs) and Coverdell Education Savings Accounts (ESAs) can be tax free if they are for qualified expenses.  In this article we will discuss the benefits of the Coverdell Education Savings Account and, more importantly, what investments you can make with a self-directed ESA.
Contributions.  Contributions to a Coverdell ESA may be made until the designated beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary.  The maximum contribution is $2,000 per year per beneficiary (no matter how many different contributors or accounts) and may be made until the contributor’s tax filing deadline, not including extensions (for individuals, generally April 15 of the following year).  The contribution is not tax deductible, but distributions can be tax free, as discussed below.  Contributions may be made to both a Coverdell ESA and a Qualified Tuition Program (a 529 plan) in the same year for the same beneficiary without penalty.
To make a full contribution to a Coverdell ESA, the contributor must have Modified Adjusted Gross Income (MAGI) of less than $95,000 for a single individual or $190,000 for a married couple filing jointly.  Partial contributions may be made with MAGI as high as $110,000 for an individual and $220,000 for a married couple filing jointly.  Since there is no limit on who can contribute to a Coverdell ESA, if your MAGI is too high consider making a gift to an individual whose income is less than the limits, and they can make the contribution.  Organizations can make contributions to a Coverdell ESA without any limitation on income.

Tax Free Distributions.  The good news is that distributions from a Coverdell ESA for “qualified education expenses” are tax free.  Qualified education expenses are broadly defined and include qualified elementary and secondary education expenses (K-12) as well as qualified higher education expenses.

Qualified elementary and secondary education expenses can include tuition, fees, books, supplies, equipment, academic tutoring and special needs services for special needs beneficiaries.  If required or provided by the school, it can also include room and board, uniforms, transportation and supplementary items and services, including extended day programs.  Even the purchase of computer technology, equipment or internet access and related services are included if they are to be used by the beneficiary and the beneficiary’s family during any of the years the beneficiary is in elementary or secondary school.

Qualified higher education expenses include required expenses for tuition, fees, books, supplies and equipment and special needs services.  If the beneficiary is enrolled at least half-time, some room and board may qualify for tax free reimbursement.  Most interestingly, a Qualified Tuition Program (a 529 plan) can be considered a qualified education expense.  If you believe that contributing to a 529 plan is a good deal, then contributing that money with pre-tax dollars is a great deal!

One thing to be aware of is that the money must be distributed by the time the beneficiary reaches age 30.  If not previously distributed for qualified education expenses, distributions from the account may be both taxable and subject to a 10% additional tax.  Fortunately, if it looks like the money will not be used up or if the child does not attend an eligible educational institution, the money may be rolled over to a member of the beneficiary’s family who is under age 30.  For this purpose, the beneficiary’s family includes, among others, the beneficiary’s spouse, children, parents, brothers or sisters, aunts or uncles, and even first cousins.

Investment Opportunities.  Many people question why a Coverdell ESA is so beneficial when so little can be contributed to it.  For one thing, the gift of education is a major improvement over typical gifts given by relatives to children.  Over a long period of time, investing a Coverdell ESA in mutual funds or similar investments will certainly help towards paying for the beneficiary’s education.  However, clearly the best way to pay for your child’s education is through a self-directed Coverdell ESA.

With a self-directed Coverdell ESA, you choose your ESA’s investments.  Common investment choices for self-directed accounts of all types include real estate, both domestic and foreign, options, secured and unsecured notes, including first and second liens against real estate, C corporation stock, limited liability companies, limited partnerships, trusts and much more.

With the small contribution limits for Coverdell ESAs, you might wonder how these investments can be made.  Often these accounts are combined with other self-directed accounts, including Traditional, Roth, SEP and SIMPLE IRAs, Health Savings Accounts (HSAs) and Individual 401(k) plans, to make a single investment.  For example, I combined my daughters’ Coverdell ESAs with our Roth IRAs to fund a hard money loan with 2 points up front and 12% interest per year.

One client supercharged his daughter’s Coverdell ESA by placing a burned down house under contract in the ESA.  The contract price was for $5,500 and the earnest money deposit was $100.  Since the ESA was the buyer on the contract, the earnest money came from that account.  After depositing the contract with the title company, the client located another investor who specialized in rehabbing burned out houses.  The new investor agreed to pay $14,000 for the property.  At closing approximately one month later, the ESA received a check for $8,500 on its $100 investment.  That is an astounding 8,400% return in only one month!  How many people have done that well in the stock market or with a mutual fund?

But the story gets even better.  Shortly after closing, the client took a TAX FREE distribution of $3,315 to pay for his 10 year old daughter’s private school tuition.  Later that same year he took an additional $4,000 distribution.  Assuming a marginal tax rate of 28%, this means that the client saved more than $2,048 in taxes.  In effect, this is the same thing as achieving a 28% discount on his daughter’s private school tuition which he had to pay anyway!

The Coverdell ESA may be analogized to a Roth IRA, but for qualified education expenses only, in that you receive no tax deduction for contributing the money but qualified distributions are tax free forever.  Investing through a Coverdell ESA can significantly reduce the effective cost of your child or grandchild’s education.  As education costs continue to skyrocket, using the Coverdell ESA as part of your overall investment strategy can be a wise move.  With a self-directed ESA (or a self-directed IRA, 401(k) or HSA for that matter), you don’t have to “think outside the box” when it comes to your ESA’s investments.  You just have to realize that the investment box is much larger than you think!

H. Quincy Long is a Certified IRA Services Professional (CISP) and an attorney.  He is also President of Quest IRA, Inc., with offices in Houston Dallas, Texas.  He may be reached by email at .  Nothing in this article is intended as tax, legal or investment advice.

How Do I Invest Thee? Let Me Count the Ways!

Many people find it very easy to see the benefits of self-directing their Roth and Traditional IRAs, SEP IRAs, SIMPLE IRAs, Individual 401(k)s, Coverdell Education Savings Accounts (ESAs) and Health Savings Accounts (HSAs) into something other than the same old boring stocks, bonds, annuities and mutual funds.  The central idea of a self-directed IRA is that it gives you total control of your retirement assets.  With a self-directed account you can invest your IRA funds in whatever you know best.

When I spoke recently at John Schaub’s Real Estate All Stars conference in Las Vegas, Nevada, I outlined some of the top strategies our clients have actually used to build their retirement wealth.  A brief description of these strategies is included in this article.  This shows the tremendous flexibility of investing through a self-directed account.

Strategy #1 – Purchasing Rental Real Estate for Cash.  Even the IRS acknowledges on its website that real estate is an acceptable investment for an IRA.  In answering the question “Are there any restrictions on the things I can invest my IRA in?” the IRS includes in its response that “IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option.”  One of our clients purchased a 10 unit apartment complex for $330,000 cash.  In April, 2008 his total rent collection was $5,235.  Even after payment of taxes and insurance, his cash on cash return is excellent, and the client believes that the value of the property will increase significantly over time.  A discussion of the relative benefits and disadvantages of owning real estate directly in an IRA is beyond the scope of this article, but for those who know how to successfully invest in real estate it is great to know that real estate is an option for your self-directed account.

Strategy #2 – Purchase, Rehab and Resale of Real Estate.  In this case study, our client decided not to hold onto the real estate purchased with his IRA.  The client received a phone call one evening from an elderly gentleman who said he needed to sell his home quickly because he wanted to move to Dallas with his son.  After a quick phone conversation, it was clear that the price the seller wanted was a bargain even considering the needed repairs.  Our client dropped what he was doing and immediately headed over to the seller’s house with a contract.  The buyer on the contract was our client’s IRA, and of course the earnest money came from the IRA after the client read and approved the contract and submitted it with a buy direction letter to Quest IRA, Inc.  They agreed on a sales price of $101,000.  Approximately $30,000 was spent rehabbing the property with all funds coming from the IRA.  The property was sold 6 months later for $239,000, with a net profit after sales and holding expenses of $94,000!

Strategy #3 – Purchase and Immediate Resale of Real Estate (Flipping).  The previous two examples show the tremendous power of buying real estate for cash with a self-directed IRA.  However, both of these strategies require a significant amount of cash in your account.  How else can you invest in real estate if you have little cash?  One of our clients was able to put a commercial piece of vacant land under contract in his Roth IRA.  The sales price was $503,553.60 after acreage adjustments.  Using his knowledge of what was attractive for a building site, our client was able to negotiate a sales price to a major home improvement store chain for $650,000.  On the day of closing Quest, IRA Inc. received two sets of documents, one for the purchase of the property for $503,553.60 and the other for the sale of the same property for $650,000.  After sales expenses, the IRA netted $146,281.40 from the sale with only the earnest money coming from the account!  A word of caution in this case is that if property is flipped inside of an IRA the IRS may consider this to be Unrelated Business Taxable Income (UBTI), causing the IRA (not the IRA owner) to owe some taxes on the gain.  Even if taxes had to be paid, it is hard to argue that this transaction was not beneficial to the IRA and ultimately the client!  It should also be noted that in this situation everyone involved in the transaction was aware of what everyone else was doing, so there was no “under the table” dealings.

Strategy #4 – Assignments and Options – Getting Paid NOT to Buy!  Another favorite strategy for building tremendous wealth without a significant amount of cash is the use of options and assignments.  One of our clients put a property under contract in his daughter’s Coverdell Education Savings Account for $100.  The sales price was a total of $5,500 because the house had burned down.  The seller was just getting rid of the property for its lot value since he had already received a settlement from the insurance company and had purchased another house.  Our client then used his contacts to find a person who specialized in rehabbing burned out houses.  The new buyer was willing to purchase the property for $14,000 cash.  At closing one month after the contract was signed, the seller received his $5,500 and the Coverdell ESA received an assignment fee of $8,500 right on the settlement statement.  That is an astounding 8,400% return on the $100 investment in only 30 days!  Even better, our client was then able to take a TAX FREE distribution from the account of $3,300 to pay for his 10 year old daughter’s private school tuition.  In a similar transaction, another client’s Roth IRA recently received an assignment fee of $21,000 plus reimbursement of earnest money for a contract.

Strategy #5 – Using the Power of Debt Leveraging.  One of my favorite true stories of building wealth in a Roth IRA involves purchasing property subject to a debt.  If an IRA owns debt-financed property either directly or indirectly through a non-taxed entity such as a partnership or LLC taxed as a partnership, profits from that investment are taxable to the same extent there is debt on the property.  One of our clients used her knowledge of real estate investing and what she learned from a free Quest IRA, Inc. educational seminar to tremendously boost her retirement savings.  After noticing a large house in downtown Houston which was in bad shape but in a great location, our client tracked down the owner in California who was being sued for approximately $97,000 in delinquent taxes on the property.  She negotiated a deal with the seller for her Roth IRA to purchase the property for $75 cash subject to the delinquent taxes.  With closing costs her Roth IRA’s total cash in the transaction was only around $3,000.  Within 4 months she was able to sell the property for a profit to her Roth IRA of $43,500!  Because the property had debt on it and because her Roth IRA sold the property for a short term capital gain, the taxes on the profit were approximately $13,500.  Still, using the power of debt leveraging her Roth IRA was able to achieve a 1,000% return in less than 4 months even after paying Uncle Sam his share of the profits!

Strategy #6 – Hard Money Lending.  Another excellent strategy for building your retirement wealth is through lending.  Loans from IRAs can be made secured by real estate, mobile homes or anything else.  Some people even choose to loan money from their IRAs on an unsecured basis.  As long as the borrower is not a disqualified person to the lending IRA, almost any terms agreed to by the parties are acceptable.  In many states there are limits to the amount of interest that can be charged, and loans must be properly documented, but IRA law does not impose any limits other than the prohibited transaction rules.  For those wanting to avoid the direct ownership of real estate within their IRA, a loan with an equity participation agreement is often used.  Several of my own self-directed accounts combined together recently to make a $25,000, 7 1/2 year, 12% first lien loan against real estate with 6% in points up front.  True, this is not exactly setting the world on fire as far as return on investment goes, but I was very pleased with a safe return on a relatively small amount of cash.  If I get to foreclose on the collateral my accounts should be able to make a substantial profit, since the land securing the loan was appraised at $45,000.  At my office we routinely see hard money loans secured by first liens against real estate with interest at 12%-18% for terms ranging from 3 months to 3 years.

Strategy #7 – Private Placements.  Many of the best opportunities for passive growth of IRAs include the purchase of private limited partnership shares, LLC membership units and private stock which does not trade on the stock market.  Let me give you two examples from my own retirement account investments.  In one case my 401(k) plan invested in a limited partnership which purchased a shopping center in northern Louisiana.  The initial investment was $50,000, and in a little over 2 years the partnership has returned $59,321.  The plan’s remaining equity is estimated as of 12/31/2007 at $31,598 and the return on investment will be around 82%.  Even though the property is debt-financed the taxes on the profit have been almost nothing since the plan has taken advantage of depreciation and all of the normal deductions.  Once your IRA or other plan owes taxes due to debt financing, it gets to deduct a pro rata share of all normal expenses.  Another of my 401(k) plan investments is bank stock of a community bank in Houston, Texas.  The initial shares were sold at $10 per share in February, 2007.  The book value after less than 1 year of operations was $11 per share, and shares have recently been selling to other private investors for as much as $14.25 per share!  That is a great return for a completely passive investment, and when the bank finally sells the shares are expected to sell for well above these amounts.

Strategy #8 – Owning a Business in Your IRA.  One of the most innovative strategies we have seen is the ownership of a business by an IRA.  Although neither you nor any other disqualified person may provide services to or get paid for working at a business owned by your IRA or other self-directed account, this does not mean that your IRA cannot own a business.  Some companies do market the ability for you to start a C corporation, adopt a 401(k) plan, roll your IRA into the plan, and purchase “qualifying employer securities,” but this is different than an IRA owning a business directly.  For example, my Health Savings Account invested $500 for 100% of the shares of a corporation which arranges for hard money loans to investors.  The company is fully licensed as a Texas mortgage broker.  The structure of the company is a C corporation.  Since being a mortgage broker is a business operation, profits from the venture would have been taxable to my HSA if the entity formed to own the business was not taxable itself, and the tax rates for trusts such as IRAs and HSAs are much higher than for corporations.  While normally dividends from C corporations are taxable a second time to the shareholder, dividends paid to an IRA or HSA are tax free as investment income.  The corporation is run by non-disqualified persons who handle the due diligence on the loans and the legal work, as well as by a licensed Texas mortgage broker who sponsors the corporation’s mortgage broker license.

Strategy #9 – Using OPI (Other People’s IRAs) to Make Money Now.  Even if you have not found the investment strategy of your dreams among the strategies discussed in this article, or if you have no IRA or if you are more focused on making money now to live on, your time spent reading this article can still be of great use to you.  For each of the above strategies I have focused on the possibility that your IRA could be the investor.  But what if you are the recipient of the IRA’s investment money?  Are you a real estate investor having a hard time finding funding for your transactions?  If you know people with self-directed IRAs or people who would move their money to a self-directed account, you can borrow their IRA money and virtually create your own private bank!  You can also partner with OPI where the IRA puts up the money and you share in the equity for finding the deal and managing the project.  Simply by explaining to people that they can own real estate in their IRAs you may be able to sell more property, either as a real estate broker or as the seller.  You can even provide financing for your sales by having OPI make loans to your buyers.  Finally, OPI can be a great way to raise capital for your business venture, although you must be aware of and comply with all securities laws.  One bank I know of told me that 42% of their initial capital came from retirement accounts!  Although you cannot use your own retirement account to benefit yourself at present unless you are over age 59 1/2, these are just some of the ways you can use OPI to make money for yourself right now.  A good network is the key to your success.

What I have discussed in this article have been some of the more common investment strategies actually used by our clients.  The only restrictions contained in the Internal Revenue Code are that IRAs cannot invest in life insurance contracts or collectibles.  Almost any other investment that can be documented can be held in a self-directed IRA.  As long as you follow the rules and do not invest in prohibited investments, your only real limitation is your imagination!