You might consider using a specialized Limited Liability Company (LLC) to invest in real estate or other non-traditional investments with your IRA funds. There may be some grand benefits for you and your IRA with this type of option. David Nilssen, CEO of Guidant Financial Group, Inc, whose company specializes in structuring self-directed accounts, provided valuable information regarding the five benefits of entities in conjunction with IRA investing:

CONTROL It is possible to have your IRA invest in an LLC managed by you. In this way, you as manager decide which investments the LLC will make, and there are no fees for each and every investment by the Fund Administrator. Once you become the manager of the LLC, you hold the checkbook.

FLEXIBILTIY With an LLC you have the ability to choose from many investments and execute them quickly. If you find the perfect investment and need to put money down immediately, you can. There is no waiting for a Custodian to approve the paperwork. This allows you to participate in investments like tax liens, which are difficult to invest in without the flexibility provided by an LLC. Nilssen pointed out, “Additionally, if you want to trade futures or options, you can establish a brokerage account for your LLC. You would not be able to do this directly using your IRA funds.”

LEVERAGE Using leverage can increase the buying power of retirement account funds. Kenton Becker, an investment mortgage specialist with experience in loans to IRAs explained “Using an LLC structure enables an investor to obtain higher loan amounts at better interest rates. Additionally it allows for the building of credit within the LLC. That means as time passes, an LLC is able to garner more leverage and even better pricing, allowing for even greater returns inside a tax free or tax-deferred retirement account.”

ASSET PROTECTION Nilssen indicated that, “An LLC is governed by state law. In every state neither the LLC manager nor the LLC members have any personal liability for liabilities incurred by the LLC…if you are personally sued, the assets in the LLC are protected. This protects your retirement!”

MULTIPLE INVESTORS Through an LLC, any number of investors can purchase unit interests. This can give your retirement funds extra buying power. If structured correctly, you can even personally participate as an investor in the LLC, as well as your friends, family, and business associates.

Nilssen did provide a warning. “If you are going to use this strategy, make sure you enlist the help of a company that has experience setting up these types of structures for self-directed retirement accounts. Making a mistake with retirement funds can be costly, so seek the help of a company with knowledge and experience. If you can, find one that includes continuing legal support with their fee and handles the process from start to finish so there is no room for error.”