Frequently asked questions
Jeff answers
If you’re serious about protecting and growing your wealth, then you need to arm yourself with the right information. That’s exactly why I put together these FAQs.
Over the years, I’ve worked with countless investors who had questions about Self-Directed IRAs, real estate strategies, and how to structure investments the right way. Instead of searching for answers in all the wrong places—or worse, making costly mistakes—take a few minutes to explore these FAQs.
They’ll help you avoid common pitfalls, understand the rules that can either work for you or against you, and ultimately, put you in a stronger position to make smart, informed decisions.
Investing isn’t just about taking action—it’s about taking the right action. So start here, and if you still have questions, let’s talk.
What is a Self-Directed IRA (SDIRA)?
A Self-Directed IRA is a type of Individual Retirement Account that allows investors to invest in and hold a broader range of investments, including real estate, private placements, loans, syndications and other non-traditional assets, beyond standard stocks and bonds.
How does investing in real estate through an SDIRA work?
Investing in real estate via an SDIRA involves purchasing property using funds from your IRA. The property is owned by the IRA, and all expenses and income related to the property must flow through the IRA to maintain its tax-advantaged status.
What are the benefits of using an SDIRA for real estate investments?
Benefits include portfolio diversification, potential for higher returns, and the ability to invest in assets where you may have far more knowledge, understanding expertise or control.
Are there risks associated with SDIRA investments?
Yes, risks include potential IRS penalties for prohibited transactions, lack of liquidity, and the need for thorough due diligence on investments.
What is an IRA-Owned Entity?
An IRA-Owned Entity, either a Limited Liability Company (LLC) or a revocable Trust, are established by the IRA to facilitate certain investments, providing more control and potentially reducing administrative delays.
How do I set up an IRA-Owned LLC?
Setting up an IRA-Owned LLC involves creating the LLC with the IRA as the member, executing a carefully drafted operating agreement with the correct terms and structure, obtaining an Employer Identification Number (EIN), and ensuring operational and investment compliance with IRS regulations to maintain the IRA’s tax-advantaged status.
What is the "10-for-12 Lending" program?
The “10-for-12 Lending” program is a specific investment secured lending strategy that involves lending money where investors receive high returns over a short period of time. For precise details, contact Watson Invested directly.
Can I use my SDIRA to wholesale real estate?
Yes, but it requires careful structuring to ensure compliance with IRS rules. Consulting with a knowledgeable attorney is advisable to navigate the complexities.
What services does Watson Invested offer to SDIRA investors?
Watson Invested provides guidance on investing with SDIRAs, structuring IRA-Owned Entities, and ensuring compliance with IRS regulations.
How can I schedule a consultation with Jeffery S. Watson?
Appointments can be booked through Watson Invested by visiting the scheduling page. You will be redirected to the Jeff Watson Law Firm website to book your appointment.
Is Jeffery S. Watson available for speaking engagements or events?
Yes, Jeff frequently teaches, attends events, and represents real estate investors in various forums. To inquire about booking Jeff for your next event visit the Media page.
How can I stay updated with the latest insights from Watson Invested?
You can join the Watson Invested newsletter by providing your first name, last name, and email address in the SUBSCRIBE button at the top of most pages.