Pros of Your SDA

Self-Directed IRAs can be awesome.

If you’re familiar with what it is, you’re probably saying, “No kidding, Lee. I love using my SDA to buy real estate.”

Well, we have that in common.

But if you aren’t familiar with a Self-Directed IRA, it’s an IRA where you’re allowed to invest in nontraditional assets like real estate, private notes, and more (like private stock in companies and precious metals…anything you can think of that isn’t prohibited by the IRS). The Securities and Exchange Commission defines a self-directed IRA as “an IRA held by a trustee or custodian that permits investment in a broader set of assets than is permitted by most IRA custodians.”

And SDA can be a great tool to set you up for retirement and real estate success. Let’s talk about how you can make the most out of your SDA.



Easy To Set Up - Cogo Capital 1. It’s easy to set one up. Other than a few forms to file and a copy of your driver’s license (depending on the requirements of your custodian), you’re basically good to go.


 Easy Funding - Cogo Capital2. They are easy to fund. You can make a one-time contribution or set it upas an automatic investment You can even use an employer’s pension plan from which to transfer money directly, or you can roll the money in. Be sure to deposit the money within the 60-day time frame required by federal rules. Otherwise, you can face penalties and taxes.

Any qualified retirement account can be rolled over into a self-directed IRA. 401k from an old company, thrift savings plan, 403B, 457 plan, any qualifying retirement plan; they’re all permissible to transfer into an SDA.

Pros Three people - Cogo Capital3. You get to be creative. You can’t invest in life insurance or No rugs, artwork, stamps, etc. You also can’t do any business with disqualified parties or use your SDA to invest in real estate that you will personally use. Otherwise, you’re are free to be creative. Having a self-directed IRAs allow you to leverage your expertise into your investments. So guess what? If you’re killing it in the real estate investing arena, you could be using an SDA to increase your advantages.

Can Be Lucrative - Cogo Capital4. It can be lucrative. You have the opportunity to make high returns on investing and lending money. It isn’t always the case, but the opportunity is out there. Again, if you’re already making great real estate decisions, this can be an added bonus to all that profit.


Percentage icon - Cogo Capital5. You don’t owe the experts. In many cases, many IRA custodians don’t charge commission. When you manage your account yourself, my institutions won’t charge you a percentage of the earnings. Most SDA have flat annual fees and small fees based on your number of transactions but don’t charge custodial fees or percentages of your assets.

Check with your local IRA custodian for their guidelines. SDAs can incur higher administrative costs (due to an increased level of administrative oversight and required paperwork required). Those costs can often get passed along to you.

You Be In Charge - Cogo capital6. You get to be in charge. I don’t know about you, but I’m not content letting others make choices when it comes to my investing. Call me old school, but I don’t want my success in the hands of anyone else. I became an expert in my field to keep by making bold moves, and I continue to make them, proving to you that if I can walk the talk, you can do the same. Take charge of your finances, but first, take charge of your education. I became a pro in real estate investing first.

If you’re feeling lost without guidance, let us help you get back on track to your investing success.

Call (800) 473-6051 to speak with a Business Development Consultant today about the training you need to succeed.

Like most things, your five pros also come with a few cons.

There can be more pressure on you as a client. You have to find your own investments as your IRA custodian won’t offer investment advice on an SDA. However, with proper training, coaching, and council, you won’t miss the investment advice you got on your old IRA.

Also, just like cash, when you use money from your self-directed IRA for investments, that money isn’t insured. If you’re even on the fence about getting an education to go with using your SDA for investing

You’ll have to do more research and due diligence, but you’ll be able to perform the legwork on any piece of real estate you might invest in. It’s what we teach! Get plugged into the right training with LAS, and we’ll help! You can also speak with your CPA and tax attorney about how to better use SDAs for your investing benefit.

Be aware of the rules

You may get to be creative with a self-directed IRA, but that doesn’t mean you get to do whatever you want. Make yourself acquainted with the rules, especially at your custodian of choice. Understand each fee and why it’s being charged, know what you’re allowed to do, and avoid anything that might be considered prohibited.

It’s wise to also consult your CPA and tax attorney before making substantial changes to your portfolio.

Know Who to Go To

The majority of IRA custodians and trustees come from banks, insurance companies, mutual companies, and brokerage firms. These firms invest in the marketable securities they offer or sell; stocks, bonds, CDs, annuities, and mutual funds among the winners here. That means they may advise you against opening an SDA because they make little to no money when you invest in an SDA.

Do your research to find an approved institution so you can invest in the assets you prefer.

However you invest, invest smart. If you need help, we’re here to guide you.

To Your Success;

Lee A. Arnold


The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

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