Turning Killer Deals into Tax-Free Wealth with a Roth IRA


Description

In this live case study, we dug into Teresa’s deal — buying a $39,000 house with minimal rehab that rents for $1,850 a month. That’s an incredible return on investment, and it sparked a bigger conversation: how to structure deals like this inside a self-directed Roth IRA so all that profit grows tax-free. We talked about short sales, land trusts, personal property trusts, overfunding strategies, and even how folks like Mitt Romney turned modest contributions into hundreds of millions.

By the end of this session, you’ll see how to take ordinary real estate deals and turn them into extraordinary, tax-free retirement wealth.


Key Takeaways

  • Killer deals can and should be structured to benefit your Roth IRA — don’t miss the opportunity.

  • With short sales, you’re at the mercy of the lender — so structure carefully to avoid killing the deal.

  • A personal property trust can be used to hold beneficial interests for your Roth IRA and even open a bank account.

  • You can overcontribute to your Roth IRA temporarily and correct it with rental income or withdrawals before year-end.

  • Overages that roll into the next year are subject to a 6% penalty — still often worth it for the long-term growth.

  • The “five-year rule” matters — a Roth IRA must be seasoned for five years to enjoy full tax-free benefits.

  • Contributions can always be pulled out, but investment growth must meet the seasoning and age requirements.

  • You can partner with your IRA (e.g., 50% IRA / 50% personal or spouse’s IRA), but you cannot transact directly with it.

  • Real-world proof: investors have turned less than $100,000 in contributions into $100 million+ tax-free inside a Roth.


Action Steps / Exercises

  1. Run the Numbers: Take one of your deals and calculate ROI if held personally vs. inside your Roth IRA.

  2. Create a Trust Flowchart: Sketch how a personal property trust could hold your deals with your Roth IRA as the beneficiary.

  3. Overfunding Drill: Write out what would happen if you overcontributed $10,000 to your Roth and corrected it using rental income.

  4. Five-Year Check: Verify when your Roth IRA was opened — is it seasoned yet? Write down the date.

  5. Partnering Plan: List one deal you could split between your IRA and either your spouse’s IRA or your personal LLC.