Any real estate investor knows that making a real estate investment sometimes requires you write a few checks. You may have to pay for repairs. To fix things up. And when you’re investing using a Self-Directed IRA, that can sometimes get tricky. How are you supposed to make quick fixes to an investment property if you can’t write a simple check? If you find yourself asking that question far too often, there’s a solution: Checkbook Control IRAs. But what are Checkbook Control IRAs, and how can you use them as a real estate investor?

What is a Checkbook Control IRA?

A Checkbook Control IRA is a type of Self-Directed IRA that allows you, the account holder, to have direct control over the investments within your retirement account. The main advantage? Instead of going through the IRA custodian every time you need to make a transaction, you can write checks or make wire transfers directly from an LLC owned by your IRA. This structure provides real estate investors with speed and flexibility. And using that speed, you can respond quickly to opportunities or handle expenses without any delays.

Here’s how it works: When you set up a Self-Directed IRA with checkbook control, you create an LLC that’s owned by your IRA. You, as the account holder, are the manager of the LLC. This means you have “checkbook control” over the funds. Additionally, you’ll have the freedom to make investments or pay for expenses directly through the LLC, without needing approval or intervention from the IRA custodian.

Why Real Estate Investors Need Checkbook Control

Real estate investing often demands immediate action. Whether you’re making a down payment, covering repairs, or handling emergency maintenance, the ability to move quickly will be essential. What if you need to fix up a property before a potential renter talks to your property manager to visit it? Without checkbook control, every transaction involving your Self-Directed IRA requires you to go through your custodian, which can result in significant delays due to paperwork and processing times.

Checkbook control solves this issue by allowing you to write checks or transfer funds on the spot. Need to pay a contractor for repairs? You can do so directly from your IRA-owned LLC account. Have an opportunity to buy a property at auction? You don’t have to wait for custodian approval—you can act fast. That’s always a competitive advantage in a fast-moving market.

The Benefits of Checkbook Control for Real Estate Investors

There are lots of benefits to investing this way. For instance, with checkbook control, real estate investors can immediately access their retirement funds to seize investment opportunities or cover expenses. This means no more days or weeks waiting for a custodian to process your request, especially during time-sensitive situations.

Additionally, Checkbook Control IRAs empower you to take control over your real estate investments. You decide when and where to invest, for example. This autonomy is especially useful for investors who prefer a hands-on approach to managing their properties and finances.

Of course, it will help if you know how to avoid the pitfalls of holding a business within your account to attain checkbook control. You can’t simply use it to write checks for anything, because you have to avoid self-dealing within such an account. Have questions? Want to learn more about the benefits and the pitfalls to avoid? We at American IRA will be glad to talk to you. Just reach out to us here at American IRA by dialing 866-7500-IRA and we’ll tell you more about Checkbook Control IRAs and what they might mean for you.