Entrust Learning Center > 1. Self-Directed IRA Basics > Howdy Partner!

Howdy Partner!

The benefits of partnering your retirement plan with others.

By: J.P. Dahdah, Entrust Arizona

IRA Insights

Partnering is one of the most overlooked aspects of self-directed retirement plans. Your self-directed retirement plan can partner with other IRAs, entities, and/or private investors to purchase an asset that one plan may not be able to afford. This can be done by utilizing an investment holding company, such as an LLC, or by simply owning an undivided interest on the actual title of the asset.

Partnering can be a wonderful solution for account holders with smaller balances,  who still desire to invest in alternative assets with a higher price tag.  For example, a husband and wife have their own IRAs with a balance of $100,000 each. They want to purchase a distressed rental property, rehab it and flip it.  The property is for sale for $150,000. Neither one of them can purchase the property from their individual account, because their balance is insufficient.

If the couple decides to partner their IRAs on this deal as 50/50 partners, each IRA can place $75,000 in the transaction and still have enough cash available for potential rehab expenses and maintenance. The family’s investment plan is successful and they can flip that property for a tax-free profit. Ah, the beauty of having control of your retirement plan.

To increase your financial literacy about partnering strategies, please attend our “Got Expertise?” workshop, offered every Thursday morning from 9-10am.