To the Men and Women Who Want to
Quit Working One Day: The Solo 401k Plan

Solo k Investments

  "Save more or work longer"

- Advice from a Financial Firm:

"The market volatility is making things worse, and either you need to save more or retire later or both," says Rob Reiskytl, Hewitt's leader of Retirement Plan Strategy and Design.

Hewitt says the recent losses mean that a typical 55-year old with a current 401(k) savings rate of 10% would need to save an additional 12% each year until 65 or work two more years to replace 2008-9 losses. The average 40-year-old with a savings rate of 7% would need to work one additional year or save an additional 1% of pay per year until age 65.

Maybe its time to quit listening to the financial experts and start listening to you. Start making your own investment decisions with checkbook control of your funds.

You can choose almost any type of investment opportunity.

With this unique Solo 401k plan you can have checkbook control  with your choice of any combination of investments.

  "Joanie is the top agent in our office.
She has lost over $300,000 in the stock market and wants
to get out. She wants to take advantage with her area of
expertise in real estate, just like I have.  I have tripled
the value of my 401 K account in three years by utilizing
this tool.  It will be a great opportunity for her."

Investment  Opportunities


Stocks, bonds, mutual funds, 

Limited Liability Companies

Limited Partnerships


Hedge Funds

Precious Metals

Life Settlements

Promissory Notes


Trust Deeds

Offshore Investments


Foreign CDs

Brokerage Accounts

Real Estate


As an investor trying to make decisions in a boundless environment, with a Solo-k plan, you have the freedom to choose the best selection of investments out there -- much like creating your own iTunes playlist. That can help you focus on delivering the best results. It can also keep costs down because you can now bring in lower-cost alternatives.     

Do you already have an idea for your investments? The Solo 401k Plan is the best decision you can make this year.


Real Estate as an Investment in Your Self-Directed Solo 401k Plan

Many investors are not aware that real estate can be purchased within a self-directed Solo 401k. However, your small business Solo 401k self-directed plan gives you the flexibility to invest in real estate whether you are interested in buying raw land, commercial buildings, condos, residential property, rental property, or vacant lots.


In considering whether to invest in real estate, the following questions and answers will help you understand the specifics


How does my Solo 401k plan acquire real estate?

Real estate can be purchased directly by your account, transferred from an existing IRA or rolled over from a qualified plan,


Can my Solo 401k retirement plan use a Limited Partnership or Limited Liability Company to invest in real estate?

Yes. If real estate is being acquired through a corporate entity such as an LP or LLC. Your Solo-k plan will be the sole owner of the LP or LLC


Does my Solo 401k plan hold Title to the Real Estate?

Since your  Solo 401 k Plan is buying the property rather than you as an individual, the title must be held in the name of the PlanTrust for the benefit of the plan. Therefore, the contract/purchase agreement, title commitment/insurance, deed, liability insurance, and any other document must be titled in the name of the Solo 401k Plan.


Can my Solo 401k  buy property I already own?

No and Yes. Property that you or a party-in-interest person has ever owned is not eligible to be purchased by your plan since this would be a prohibited transaction. In essence, the prohibited transaction rules prohibit a Qualified Plan from acquiring a piece of property which will be purchased from or used personally by the accountholder or other disqualified persons. However, the IRS and Dept of Labor frequently allow exemptions to the prohibited transaction rules. With application, you might be able to purchase your own business, or other property from yourself under certain arrangements .


How do I take possession of the property in a distributon?

You may withdraw the property from your account as an in-kind distribution (at the current market value) and pay any taxes and/or possible penalties if you are under age 59 1/2. You will need to provide the Solo 401k Plan with a completed and signed Distribution Form and a deed prepared for Solo 401k Plan's signature that conveys the title of the property from your account to you individually. An updated appraisal or broker's price opinion must also be provided if the current appraisal is more than three years old or if improvements have been made to the property.


How is earnest money handled?

The earnest money deposit must be funded by your Solo 401k account. You cannot use personal money for the deposit and then be reimbursed later. You will need to send a copy of the contract or purchase agreement to Solo 401k along with written authorization for Solo 401k to send the specified amount of earnest money from your account to the title company or closing attorney. The contract or purchase agreement must list the Solo 401k as Custodian. 


Can my Solo 401k account borrow funds to finance a real estate purchase?

Yes  Solo 401k can hold debt financed  property in an trust  but only with the use of a non-recourse promissory note issued by a lending institution or by the seller of the property. "The non-recourse promissory note cannot be personally guaranteed, and the lending institution can only look to the property securing the note as collateral."


Can my Solo 401k account purchase a portion of a property along with other investors?

Yes, as long as the other owners are not disqualified persons. The deed must be registered to  Your Solo 401k Plan, as Custodian,  as to an undivided __% interest.


What types of property can I purchase with my Solo 401k account?

Vacant lots, raw land, and income producing property such as rental houses, condominiums, commercial real estate or even mortgages.


Is there property that Solo 401k can not hold?

Solo 401k will not directly invest in  time shares. Permanently attached manufactured homes may be purchased. 


How are expenses and/or improvements handled in my Solo 401k account?

All earnest money deposits, insurance premiums, taxes, debt payments, or other expenses of the property must be paid by the Solo 401k to an unrelated third party . Since the Solo 401k Plan requires your written authorization to pay invoices,  A copy of the invoice or tax notice must then be maintained by the Solo 401k Plan along with your written authorization to pay the expense from the solo 401k account.


Is rental income deposited in my Solo 401k account?

Yes. All rental income must be deposited into your Solo 401k Account. The Solo 401k requires you to appoint a property manager for income producing property. The property management agreement will be provided by the property manager and will be signed by you and the property manager. Your third-party property manager may also pay expenses from rents received as long as the Solo 401k is provided with a  report of income received and expenses paid.


How does my Solo 401k get property management services?

You must appoint a Property Management Agent to handle all property servicing functions including the property manager. A servicing agent is required for all types of property.You can appoint the property manager.


Do I need a property appraisal with a Solo 401k? 

Yes. The Solo 401k requires you to provide a property appraisal prior to a Solo 401k  a real estate purchase. In addition, an updated valuation must be prepared for the Solo 401k annually  in order to update the value of the account.


Do I need to carry liability insurance on property held in the Solo 401k account?

Liability insurance is required on property with improvements and is optional for vacant land. The insured on the policy must be the The Solo 401k Plan as Custodian, You can not add the property to a policy held in your name.


What should I know about selling property within my Solo 401k account?

Once you have the property under contract and are ready to close, you will sign the closing documents as "Read and Approved" and forward them to Solo 401k Plan Trust for signature. Solo 401k Plan Trust will then execute the closing documents and return them to the title company to complete the transaction. The title company will then remit the proceeds of the sale directly to your Solo 401k account.


Can the Solo 401k account finance the transaction when the property is sold?

Yes. Once the property is sold, the Solo 401k may carry the note and mortgage within your account. The principal and interest payments will be deposited into your Solo 401k account, and you can reinvest the cash anyway you choose.


Mutual Fund + Real Estate = high return - low risk advantage


If you had owned a classic "stock and bond" mutual fund, your average returns over the past five years would have been 4.5% with a risk level of 7.82 (Standard Deviation)


Instead, if you had invested 10% of the mutual fund assets into a REIT index fund, your total overall return would have increased to 5.9% and your risk level would have stayed the same at 7.82.


Calculating what you should pay for REITs.


The way to determine the price to pay for a REIT is to calculate the net asset values by dividing the net operating income generated by a REIT's properties by the value of its income stream -- derived from recent sales of similar properties.


More and more people are starting to discover the risk-return advantages of real estate investments in small business Solo 401k plans.

A small busines Solo 401k opens more options for investing your retirement dollars with a self directed account. The best investment may be the investment you make in yourself.


Investing in Your Own Business with Your 401k Assets


Under certain circumstances the IRS will auhorize an exception to the rules prohibiting self dealing in the plan's investment assets and allow you to purchase your own company stock or property.

In general,
ERISA Section 407(a)(2) provides that no employee benefit plan may invest more than 10% of its assets, valued at market at the time of the transaction, in employer securities and real property. In determining the 10% maximum, both employer securities and employer real property are added together. Since certain types of employee benefit plans are designed to invest exclusively in employer securities (ESOPs, etc.), certain exceptions to the general limitations were included in the law.



Individual Account Plans
The statutory limit of 10 percent does not apply to "eligible Individual account plans." Eligible Individual account plans are profit-sharing, 401k and employee stock ownership plans (ESOPs), as well as stock bonus, thrift and savings plans, that explicitly provide for the acquisition and holding of qualifying employer stock or qualifying employer real property. [See ERISA Section 407(d)(3)(A)] Generally, these plans are intended to invest wholly or largely in employer securities. Section 407(d)(3)(B) requires that such plans must explicitly authorize the holding of employer securities and/or real property in excess of the Section 407(d)(3)(A) 10% general limitation.


Realize that the stock or real property must first be valued by an independent appraiser and if the property or stock has little value, the best interest of the plan would be not to buy the company property or company stock.


Investing in your business with your Solo 401k assets requires a special plan document along with applications to the IRS for a Letter of Determination and an Exemption from the Prohibited Transaction regulations. Simple? No. Cheap? No. But done by small businesses looking for financing without the need of a credit score.

The IRS  has approved documents that allow this type of investment. However, the IRS has also found that these types of plan do not operate properly and are thus subject to disqualification upon examination. The IRS is targeting these plans for review and the penalties for disqualification are severe. We have a copy of the IRS letter to Examiners regarding these plans. The IRS calls them ROBS. If you would like to see a copy of the IRS's letter or find out more about ROBS, just email and reference ROBS in the subject line.




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Buying into Private Companies

Investing in Currencies

Buying Gold and Silver

Investing in Life Settlements

Investing in Tax Liens

Investing Offshore

Investing in Annuities

Investing in Oil Wells

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Choosing your entity structure for real estate investments

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Simple Tool to Analyze Real Estate Deal Risk

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