Making Your First Deal Inside a Self-Directed Roth IRA


Description

In this second session, I’ll show you exactly how a real investor used his Roth IRA to scoop up 23 houses in one deal — and how you can do the same thing step-by-step. You’ll learn how to structure your offer, handle earnest money the right way, and make sure everything runs through your IRA without messing up the tax benefits. I’ll also walk you through key forms like the Asset Purchase Directive and the Payment Authorization Directive, plus the simple way to write a purchase contract using your IRA as the buyer.

By the end of this lesson, you’ll see how easy it is to take action, get a deal under contract, and keep all the profit flowing tax-free inside your Roth IRA.


Key Takeaways

  • You can buy multiple properties under your Roth IRA by grouping them into separate accounts or investments (e.g., 10 in one Roth, 13 in another).

  • Each IRA makes one investment — so group wisely to keep paperwork and fees simple.

  • Earnest money and all closing costs must be paid directly from the IRA, not your personal funds.

  • The Asset Purchase Directive form tells the custodian to release deposit funds once a contract is accepted.

  • The Payment Authorization Directive form covers final closing amounts, insurance, taxes, utilities, and ongoing expenses.

  • Always sign documents as “Read and Approved” to show you didn’t personally sign on behalf of your IRA.

  • Closings are handled as mail-away closings — you don’t have to be there in person.

  • You must keep all bills, insurance, and title documents vested in the IRA’s name.


Action Steps / Exercises

  1. Draft a Simple IRA Purchase Contract: Write a practice offer where your Roth IRA is the buyer (e.g., “CAMA Plan FBO [Your Name] Roth IRA”).
  2. Practice the Earnest Money Process: Fill out a mock Asset Purchase Directive form authorizing $100 earnest money from your IRA.
  3. Prepare for Closing: Fill out a sample Payment Authorization Directive form showing how taxes, insurance, or closing costs would be paid.
  4. Organize Your IRA Documents: Make a folder with:
    • Application and adoption agreement

    • Beneficiary form

    • Copy of driver’s license

    • Transfer/rollover form

    • Asset Purchase Directive form

    • Payment Authorization Directive form

  5. Homework Drill: Identify one deal you could potentially buy in your IRA (real or hypothetical) and outline how you’d structure it.