One prohibited transaction can blow up your entire self-directed IRA, and the IRS has the full lifetime of that investment to catch it. In this episode, Daniel Tercey of Directed IRA breaks down the self-directed IRA rules every real estate investor needs to know before buying rental property with a self-directed IRA, lending private money, or rolling an old 401(k) into a self-directed Roth IRA or solo 401(k). Disqualified persons, prohibited transactions, UBIT, UDFI, checkbook control, IRA LLC structures: the tax-free growth is real, but only if you stay inside the lines.
David Wiener (Mr. Cash Flow) and Daniel cover the 401(k) rollover process step by step, why financial advisors at the big custodians never mention self-directed retirement accounts, how the backdoor Roth IRA works when you "make too much money," and the non-recourse loans that let your IRA buy more real estate than its cash balance. Plus real client stories: a 56-year-old wholesaler building tax-free retirement income through a solo 401(k), a five-investor private lending group in Georgia acting as its own bank, and a pilot who bought an airplane inside his Roth IRA.
Nothing in this episode is tax or investment advice. It's education. Loop in your tax strategist, CPA, and cost segregation professional before you move money.
CHAPTERS
00:00 Unlocking Hidden Retirement Funds |
05:06 Understanding Self-Directed IRAs
09:31 Choosing the Right Retirement Account
14:25 Navigating the Rollover Process
18:59 Avoiding Common Mistakes in SDIRAs
23:28 Prohibited Transactions Explained
28:22 Understanding UBIT and UDFI
30:12 Exploring UBIT: Unrelated Business Income Tax
33:16 The Importance of Contracts in Private Lending
34:59 Real-World Examples of SDIRA Investments
41:41 Using Retirement Accounts for Business Capitalization
44:05 Steps to Open and Fund a Self-Directed IRA
THE 5-STEP PLAYBOOK
1. Contact an alternative asset custodian (a 15-minute call)
2. Fund the account BEFORE you find the deal
3. Find your deal
4. Know the disqualified persons and prohibited transaction rules cold
5. Loop in your tax strategist, CPA, and cost segregation professional
CONNECT WITH DANIEL TERCEY
Directed IRA: https://directedira.com (book a call, top right corner)
Email: Daniel.Tercey@directedira.com
If this opened your eyes, subscribe and share it with the real estate investor or business owner in your life who still has retirement money sitting on the sidelines. Every episode comes with a check sheet and my 2026 tax planning guide at https://www.taxstrategyplaybook.com
Your host: David Wiener, "Mr. Cash Flow"
https://davidhwiener.com
David.wiener@cashflowstrategies.us
770-224-8504x2
Schedule a conversation or free consultation at https://calendly.com/david-wiener/initial-consultation
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