In this episode of the High Return Real Estate Show Jeff Schechter, Jack Gibson, and special guest Tim Berry discuss the checkbook IRA and how to multiply the returns of your retirement account.

Questions Asked:

  • How did you get into this line of work?
  • What is a self directed IRA?
  • How can someone convert their existing accounts into a self directed IRA?
  • What is the primary difference between a 401(k) and an IRA?
  • What are the rules around self directed accounts?
  • How does someone get started in setting up this plan?

Key Lessons Learned:

Self Directed Retirement Accounts

  • Most people get their investment knowledge from financial advisors that are more focused on making money than giving the best advice.
  • A checkbook IRA is simply giving you the control of what is within the IRA.
  • 97% of all money in retirement accounts is in other areas other than real estate.
  • Chances are, if there is something you want to invest in a Checkbook IRA can do it. The only thing it can’t do is buy life insurance.
  • If you’ve left a previous employer where you had a 401(k) there is a good chance you can roll the account over to a self directed IRA. It may be trickier if you still work for that employer but the older you are the better your chances. If you’re self employed you will have no problem.
  • You have to find a trustworthy self directed IRA custodian and transfer the assets from the old account to the new account. With a self directed 401(k) you are already your own custodian.
  • The stock market is a fool’s game. Real estate is a great, stable investment.
  • You may run into issues at tax time trying to find a CPA that will do your taxes but if you have a IRA, your custodian will take care of it.
  • It’s very simple to get started in setting up either plan. There is 250k benchmark of value before you have to really start doing some paperwork for this kind of investment account.
  • An Excel spreadsheet may be the only tracking you need for your investment account.


  • You can’t invest in life insurance and collectibles.
  • You can’t engage in a prohibited transaction which means engaging in an investment with anyone related to you.
  • Certain transactions will generate taxable income which you have to account for.
  • If you flip real estate within the retirement account, you can use the depreciation to offset the potential tax implications.

Self Directed 401(k) vs IRA

  • A self directed 401(k) is the best route to go.
  • A self directed IRA requires a third party custodian, a 401(k) does not.
  • Inside an IRA, you will have to pay taxes on leveraged real estate deals. With a 401(k), you won’t.
  • You can borrow money from a 401(k) without paying taxes on the borrowed money which isn’t the case with an IRA.
  • The only restriction to a self directed 401(k) is that you can only establish one if you have an active business or stream of self employed income.
  • The penalties for a 401(k) are typically lower than than an IRA.

Resources Mentioned

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