Are you tired of earning less than 1/% interest on your bank CD or deposits? Or are you tired of the
volatile and erratic stock market? Real inflation is over 3% so receiving 1% or less on an interest
rate from a bank is only slightly better than hiding the money under the mattress.

This article will explain how you can redeploy your cash from bank deposits to buying single family
rental homes in an all cash transaction or utilizing an existing IRA into a self directed IRA in real
estate (single family rental homes). The cash return on at $135,000 investment would be between
6-8% annually. These home prices are generally need to be under $300,000 to make this model
work. Therefore houses should be in areas like Colton, (Inland Empire) or Stanton (lower priced end
of Orange County). Condo’s would likely be excluded due to their $300-$400 monthly association
dues.

Self Directed IRA or 401K Retirement Plans
Many of us have an IRA, 401K, Simple Plan retirement plans floundering in the stock market.
Mutual Funds, bank brokerage companies such as Merrill Lynch do not want you to roll these
existing plans into self directed purchases of single family rental homes as they are not capable of
managing or administering real estate investments. If the roll over is properly handled there is no tax
ramifications. Accredited Management Organizations (AMO) like JD Property Management, Inc. can
handle the rental, rent collections, maintenance, bill paying and supply you with a monthly income
statement and year end statement for your taxes and Plan Administrator.

Prohibited IRA Transactions

  • Cannot convert existing property into self directed IRA’s
  • No Collectibles (artwork, rugs, stamps)
  • You may not personally guarantee payment of loan on these properties
  • Any debt financing is subject to Unrelated Business Taxable Income (UBTI)
  • Cost must not exceed Fair Market Value
  • Owner or Family members cannot collect rents or pay expenses (need unrelated property
  • management co.)