Kaaren is founder and CEO of uDirect IRA Services and was recently elected to the Board of Director of
RITA (Retirement Industry Trust Association).
IRAs (Individual retirement accounts) come in the form of traditional, Roth, SEP, Simple, spousal, and
inherited and they have different rules for contributions and disbursements.
Self-Directed means you choose the assets such as precious metals, real estate, notes, businesses, etc.
Not just investing in mutual funds and the stock market.
Two reasons to utilize and benefit from Self-Directed IRA accounts as a real estate investor:
1) For your own IRA to buy rentals, flips and other real estate
2) For you to bring investors into your real estate investing business with THEIR Self-Directed IRA
funds. You can ask friends and family if they have any retirement funds they might want to
invest with you (IRAs, 401(k)s, etc.)
When purchasing real estate in your IRA the IRA goes on title, not you. For instance it would say UDirect
IRA custodian FBO Holly McKhann’s IRA. Fbo stands for For Benefit Of.
You must set up your Self-Directed IRA before going into contract on a real estate purchase so there are
funds for your deal and so that the IRA can go on the contract and title. Remember you do not sign the
documents. The custodian signs on behalf of the IRA.
If you’re flipping houses full-time and you flip in a Self-Directed IRA it may be subject to UBIT (unrelated
business income tax). Consult with your CPA to learn if this applies to you.
You can learn much about UBIT rules in IRS Pub 598 at IRS.gov.
Prohibited transactions can disqualify your entire IRA account so learn what the rules are and follow
them carefully. Prohibited transactions include hiring a parent, grandparent or child (lineal
descendants) to work on your properties or sell them as a realtor. You MAY hire nieces, nephews,
uncles, aunts though.
For instance, if your IRA buys a house near the college your son goes to, your nephew can live in it, but
your son can’t. Your nephew can mow the lawn, but your son can’t.
Do proper due diligence on any companies you want to invest your Self-Directed IRA with to ensure they
have not committed crimes, fraud, etc. You can check them out through the SEC and googling “their
Kaaren’s two biggest advice points are
1. Save for retirement
2. Protect that money
Kaaren has offered a free book to our listeners called The Self Directed IRA Handbook by Mat Sorenson.
To receive your free book by mail, email her your name and shipping address at firstname.lastname@example.org
and type BOOK in the subject line.
Call Kaaren and her team at (714) 831-1866 uDirect IRA Services, LLC, www.uDirect.com