Posted March 28, 2009By Kara McGuire
Want to put money into real estate? A mom-and-pop business? A llama? Then a self-directed IRA may be just what you need.
After Tom Fafinski lost money in tech stocks, he began searching for alternative places to invest. Fafinski, 44, of Farmington, discovered self-directed IRAs and used money earmarked for his retirement and his kids’ college to buy an Eagan townhouse as an investment property.
Sick of being stuck with a dozen mutual funds in his workplace retirement plan, Tim Olson rolled over his 401(k) to a self-directed IRA and is building townhouses in Wells, Minn. A self-described “hands-on” kind of guy, Olson likes to keep his IRA money in town, using local contractors and investing in CDs from a local bank. A self-directed IRA lets him do that. “The biggest appeal is the options; I’m not limited to mutual funds.”
Both Fafinski and Olson are part of a growing number of investors turning to self-directed IRAs. “The worse the stock market does, the more business I get,” said Todd Grill, principal of Entrust Midwest, a company that administers self-directed IRAs.
