MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Pretax money for homebuild??

20 Jan 2021 · 1 min

Watch on YouTube

1:09

In this short YouTube Q&A, Speaker B asks for creative ways to use pre‑tax money for a home build. Speaker A explains that "pre‑tax money" refers to traditional IRAs or 401(k)s, which can be self‑directed through a company like Directed IRA. A self‑directed retirement account can own real‑estate: it can purchase land, pay a contractor to construct a building, and then either hold the property as a rental or sell it. The key restriction is that the property cannot be used for personal residence; it must remain an investment asset. Speaker A also mentions the Directed IRA weekly podcast (co‑hosted with Mark) that dives deeper into these strategies. The conversation emphasizes that real‑estate is a common asset for self‑directed IRA clients, but personal use is prohibited.

Any creative ways to use pre tax money for home build? Haha. I know you guys are creative. Oh my gosh, this isn't fair. Okay, Any creative ways
for a home build?
Yep.
Okay. Yeah. All right, so when you say pre tax money, I believe you mean a traditional IRA or traditional 401k, which by the way, you can do what's called self directing. You can self direct those dollars in your IRA or 401k. We do it at Directed IRA, that's our company, Direct Calm. And you can basically have a retirement account that owns real estate. And one of those things could be a new build, your retirement account, your pre tax dollars. Again, another way to say it is traditional IRA or $401. Could buy land, pay a contractor to build on it, hold it as a rental, or turn around and sell it. Absolutely. Real estate's one of the most common assets. We have thousands, tens of thousands of clients that self direct and do this. And building a property is absolutely one of the things you could do. 10 seconds left.
What can't he do? What can't he do with that home build? 10 seconds
left. Can't do it. Is living it. Okay. You're not doing it for personal use, you're doing it for investment. So self directed IRAs and stuff. We have a separate podcast, by the way, called the Directed IRA podcast. Mark and I do once a week where we get into that in a deep way. But the overriding principle is when you buy assets with your IRA, they can't be for personal use, therefore investment.
70 seconds. But you know what, we gave you rollover minutes on that last one. That's true. Shameless. And there was a shameless plug in there, so that's true. We can't count that. Okay.