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How It Works

How a Self-Directed IRA Works

Investing with a self-directed IRA isn’t much different than investing outside of an IRA. There are a few minor differences and some rules to be aware of, but Equity Trust, with our nearly 40 years of self-directed IRA experience, strives to make the process easy.

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6 Steps to a Self-Directed IRA Investment

  • Establish and Fund an account with Equity Trust Company – For most accounts, all you’ll need is a signed application, copy of your driver’s license, and method of payment. To fund your account, deposit new cash or move funds from an existing 401(k), IRA or other retirement savings plan to your new account.Rollovers and transfers can take time so it’s important to initiate funding immediately. Investment opportunities come and go quickly and preparation is everything.
  • Identify Your IRA Investment – After you’ve identified your preferred investment and are ready to make a purchase, complete a direction of investment form with details about the investment. Details should include a description of the investment, how much it costs, and where to send the funds – and we can take it from there.Before investing make sure you know and understand self-directed IRA rules and regulations.
  • Ensure Correct Title of Your IRA Investment – You and your IRA are two separate entities, and as such, the investment needs to be titled in the name of your IRA and not you personally.The correct title for most real estate IRA investments is:
    Equity Trust Company custodian FBO (for benefit of) YOUR NAME IRA
  • Request Funds to Purchase IRA Investment – Once we review and process your direction of investment form, we send funds from your IRA to purchase the investment per your instructions. For safekeeping, we retain all important records like deeds, notes, and operating agreements.
  • Maintain Your IRA Investment (How Income and Expenses Flow)
    All payments/profits related to an investment in your self-directed IRA must be made from your IRA and return to your account. In addition, all expenses related to your investment must be paid from your self-directed IRA.
  • Sell Your IRA Investment – Negotiate the sales terms and complete an investment form instructing us to sell on behalf of your IRA. Proceeds from the sale return to your self-directed IRA tax-deferred or tax-free, available to you again for future investments.
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Let’s talk about your financial future.

Schedule a one-on-one session with an expert alternative investment counselor. We’re here to answer any questions, help guide you through the process, and provide more detailed information and education specific to your journey.

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