To Ron Guy - Posted by Stephanie

Posted by Ron (MD) on August 29, 2003 at 09:05:51:

Stephanie,

I was out of town for a few days. I responded last night to your earlier post below.

Ron Guy

To Ron Guy - Posted by Stephanie

Posted by Stephanie on August 28, 2003 at 09:50:11:

Mr. Guy,
I posted a message below, perhaps you did not see it. Thanks again.

Ron,
This was an excellent thread on IRAs and your experience with Entrust. I do have a few questions that I hope you can answer. I have visited the Entrust and Equity Trust web sites, read all the info they offer on doing deals in the IRA but I still haven’t set up my IRA since no one in the customer service department of either company has adequately answered my questions. I want to do some wholesale and retail rehab deals within a Roth IRA or SEP IRA but am confused as to how to get all the money I need for the deal into the IRA. My understanding is that I am limited to a $3,000 contribution per year in a Roth. Now that is fine if I am only wholesaling a deal to another investor but what about doing a rehab deal. On a rehab I usually need about $40,000 to buy the house and do the repairs. How can I do this if I am only allowed to contribute $3,000. I could lend the money to my IRA but that is illegal according to Equity Trust. They said I could borrow from another source but then I have to pay a UBIT tax (which I don’t fully understand). It seems to me that unless you already have an IRA with a lot of cash in it to cover the purchase and rehab costs, then it may not be possible to do a rehab in the IRA. Any insight you can provide would be appreciated. Also if you do your deals in the IRA, do you have use for any other entities such as LLCs or corporations. How have you structured your business using these entities? I have used a corporation for my rehabs but don’t see the need for one if I use an IRA. Can you draw a salary from your IRA or should I keep my corporation? Sorry this is so long but I am really confused and have been unable to get unbiased advice from Entrust or Equity Trust and my CPA never heard of doing deals in the IRA. Thanks for any help you can offer, you seem very knowledgeable.

Stephanie