Self-Directed IRA's
“Self-Directed” has be come a generally accepted term used by the industry to indicate that an IRA custodian or facilitator will allow an IRA owner additional control over their investment decisions.
The buzz words “self-directed IRA” or “truly self-directed IRA” are often misinterpreted. It is important to understand from the start that all IRAs must adhere to the same IRS rules. Whether or not you can invest in high yielding trust deeds or a mortgage pool is determined by the capabilities of your custodian or facilitator.
When custodians claim that an IRA account is self-directed, the IRA owner performs his/her own due diligence and instructs the custodian to act. Each custodian varies in the degree of control allowed its IRA owners. Larger broker dealers sometimes say they have a ‘self-directed’ IRA, but continue to limit the owners’ investment options to traditional stocks, bonds and mutual funds.
In order to invest in California Trust Deeds and Mortgage Pools, an IRA owner should search for either an IRA custodian or facilitator that sponsors a diversification of investments.
Again, the main difference between a custodian and a facilitator is the degree of control the IRA owner has over their investment decisions. With a custodian, the IRA owner instructs the custodian to act on their behalf.
When an IRA owner would like to invest in a Vanguard Funding Corp. first trust deed or mortgage pool, the appropriate forms are completed and then the custodian will act. Below is a partial list of custodians offering self-directed IRA investing.
Begin investing with Vanguard Funding Corp. using your IRA:
1) Verify that your custodian or facilitator will allow trust deed and Limited Liability Company (LLC) investments.
2) IRA owners must show proof of California residency and meet one of the two following suitability requirements:
a) Have a net worth of at least $500,000 [excluding home, furnishings and automobiles].
b) Have a net worth of at least $250,000 [excluding home, furnishings and automobiles] and an annual gross income of at least $65,000.
3) An investor's subscription will be limited to ten percent (10%) of the investors's net worth.
4) Fill out the appropriate approved investment or authorization to invest form from your custodian or facilitator
5) Contact a Vanguard Funding Corp. investment representative to help answer any questions you may have.
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