There is a great deal of information out now about Self Directed IRAs, Solo 401Ks, and IRA LLCs.  These are self directed retirement accounts and although they have been allowed since ERISA was passed in 1974, there was great mystery about these investment and retirement vehicles until just these past few years.

The first thing you MUST understand is that these IRAs and 401Ks MUST have all of the same rules followed as Custodial held and managed accounts.  IRS Publication 4975 and Circular 590 are critical to understand and follow if you plan to take on the world of self-investing.

What is self investing?
Just what it implies:  YOU make the decisions on investments, not a broker.  There is no list of investments on a website to choose from.  No one gives you advice or assistance unless you ask for help from a qualified investment advisor and pay for the advice and services.

So, why would folks want to set up a self directed retirement account?
Because there are many non-traditional investments available that may be quite lucrative and suitable for a retirement account which are NOT offered in managed accounts.  Examples of these investments are raw land, private placement investments, hard money loans, tax liens, precious metals, and even livestock.

What is an IRA-LLC?
 An IRA-LLC is a Self Directed IRA‘s ownership of a Limited Liability Company. Some in the industry also refer to this as an ICO, IRA Company, or ‘checkbook IRA’. An IRA-LLC is a special purpose limited liability company which is either fully or partially owned by an IRA. The self-directed IRA funds can be legally transferred to the IRA-LLC in exchange for member units, or shares, and then used within the structure for self-directed investment. Newman Asset Management has helped many clients set up an IRA-LLC.  Once set up, the client manages the investments.  Many clients have invested in areas such as real estate, hard money lending, life settlements, private placements and businesses, ETFs, opened brokerage accounts, and tax liens, just to name a few.

What are the Benefits of an IRA-LLC? 
Some of the benefits apply to all holders of an IRA-LLC and some are more investment related. Let’s take a look at a few:

  • A significant benefit, especially in today’s economic climate, is that you manage and have hands-on control of your money. So no more waiting on a custodian to close that deal on a tight deadline. Need to write a check today to get into a time sensitive investment? You can do it!  An example is for real estate transactions and tax liens.
  • An IRA-LLC allows you to participate in investments that may be considered “non-traditional” by the lay public. For instance, you can buy and hold real estate within an IRA-LLC, or purchase shares in a private placement investment. Of course traditional investments such as stocks, bonds, annuities, and mutual funds are still available investments, and highly recommended to balance the investment portfolio.
  • Just like more traditional IRA accounts, the IRA-LLC’s gains on investments are deferred within the IRA.  Since you are the manager of the IRA-LLC, you have direct control of what happens, or needs to happen, with your investments. Again, no more waiting on a custodian to get something done.
  • While an IRA cannot participate in a financing arrangement, an IRA-LLC can do so. This allows the IRA-LLC to put up a down payment and use financing for the remainder of an investment.   You do need to be aware of Unrelated Business Income Tax (UBIT), when financing is involved.
  • Unlike a custodial held self-directed IRA, where you are charged for every transaction, report, and a percentage of your assets, you only have a nominal $200-$300 flat fee with an IRA-LLC…even if you do 100’s of transactions.

What will Newman Assets help me with in this setup and investment process?
Quite a bit. Newman Assets, in conjunction with the IRA LLC vendor (NAFEP) – the National Association of Financial and Estate Planners (NAFEP) - makes sure all the following occurs so that you do not miss out on any opportunities:

  • Setup of the LLC
  • Filing of state articles
  • Filing of Tax Identification Number with the IRS
  • IRA, prohibited transaction compliant operating agreement
  • Setup and operating guide
  • Banking authorizations for checking account, and assistance with account setup
  • Handling your rollover with American Estate & Trust, the IRA custodian
  • Audit Support Warranty, provided with all IRA-LLC’s by NAFEP
  • Ongoing training and support services.

Sounds like what I need. What do I do now?
Great! This is the simple part. Contact us by phone (281-844-3615) or email ( info@newmanassets.com ) and our staff will get some basic information from you to get started. From there we will hold your hand through every step until you are setup. This usually takes a couple of weeks at most.

So, you mentioned real estate, but what else do your clients invest in?
As the saying goes, you name it. Being that an IRA-LLC is still owned by an IRA, it still has to follow the same rules as noted in publication 590 by the IRS. But here are some of the accepted investments clients have invest in:

  • Real Estate – residential, multi-family, large commercial, foreign
  • Funding a business or passive investment
  • Hard money lending
  • Private placements or offerings in a variety of fields
  • Precious Metals, such as Gold, Silver, and Platinum
  • Many more! (Would you believe race horses or fish farms? Don’t laugh – they are making a killing!)


Does Newman Asset Management help us purchase these investments?
No, unfortunately, we cannot assist with any investment purchases under Newman Asset Management.  Dianne Newman, via Lincoln Financial Securities, may only provide investment services and advice to clients on products and services offered by Lincoln Financial Services.  All other investment solicitation is strictly prohibited.  In addition, investment services can only be offered to clients in Texas, Florida, and South Carolina.

*Securities and advisory services offered by and through advisory representatives of Lincoln Financial Securities Corporation, Member SIPC.  Lincoln Financial Securities Corporation and Newman Asset Management, LLC are not affiliated.
Branch office:  3200 Southwest Frwy.  Suite 1420  Houston , TX  77027      Tel: (713) 659-1212