Here's a really good FLOW Chart from Guidant Financial that illustrates how people can convert the money that they have in their current IRA or 401K into a NEW Self-Directed IRA. It further illustrates how to take it one step further in order for you to have complete Check Book Control so you don't need to depend on a Custodian to fund an investment opportunities when they arise. The ease of being able to write a check for the funds that are available in your IRA is a big advantage over the traditional IRA that requires approval and from your Custodian in order to fund an investment opportunity as it comes up, which may take a few days for your funds to arrive which may mean a lost opportunity.
The LLC is an actual business entity that is "bought" by your IRA. You are the Managing Member that owns and controls the day-to-day operations of the LLC, which allows you to invest in ANY legal investment opportunity as long as it is in compliance with IRS guidelines for your IRA. The great advantage to setting up a Non-Traditional Self-Directed IRA is it does not limit you to just stocks and bonds.
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