BEWARE - Avoid these Common Mistakes when Self-Directing

Jun 30, 2025

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In this episode of the Directed IRA Podcast, Mat Sorensen and Mark J. Kohler dive into the Top 10 Mistakes in Self-Directing Your IRA—and how to avoid them. Whether you're just getting started or already managing self-directed investments, this episode outlines the most common pitfalls that can derail your retirement strategy, including prohibited transactions, improper deal structuring, and UBIT traps. Mat and Mark not only break down each mistake but also provide practical guidance on how to structure deals the right way to stay compliant and protect your tax-advantaged account. They also highlight a critical bonus topic on Required Minimum Distributions (RMDs) for illiquid assets that every older investor must understand.

If you’re looking to confidently navigate self-directed retirement investing, this episode is for you.

00:00:08 – 00:01:50 – Intro, Past Events, & Empowering You to Self-Direct Your IRA
00:01:50 – 00:04:15 – Breaking Out of the Brokerage Box (Disney Analogy): Investment Freedom Explained
00:04:15 – 00:04:18 – Top 10 Mistakes in Self-Directing Your IRA
- 00:04:18 – 00:06:30 – Mistake 1: Early Commitment to Deals
- 00:06:30 – 00:07:54 – Mistake 2: Buying Assets You Already Own
- 00:07:54 – 00:08:36 – Mistake 3: Transacting with Disqualified Persons
- 00:08:36 – 00:11:30 – Mistake 4: Violating the 50% Rule in Business Ownership
- 00:11:30 – 00:13:12 – Mistake 5: Providing Services to IRA-Owned Assets
- 00:13:40 – 00:16:50 – Mistake 6: Personally Profiting from IRA Transactions
- 00:16:50 – 00:21:30 – Mistake 7: Using IRA-Owned Assets Personally
- 00:21:30 – 00:23:04 – Mistake 8: Improper Flow of Funds with IRA LLCs
- 00:22:55 – 00:24:20 – Mistake 9: Underfunding Investments and the Need for Capital Planning
- 00:24:20 – 00:31:04 – Mistake 10: Ignoring UBIT and UDFI Tax Traps
00:31:04 – 00:32:30 – Bonus: RMD Pitfalls with Illiquid IRA Assets
00:32:30 – 00:34:15 – Conclusion: Knowledge is Power—Avoiding Pitfalls with Confidence

Directed IRA Homepage: https://directedira.com/

Directed IRA Explore (Linktree): https://linktr.ee/SelfDirectedIRA

Book a Call: https://directedira.com/appointment/

Other:
Mat Sorensen: https://matsorensen.com & https://linktr.ee/MatSorensen
KKOS: https://kkoslawyers.com
Main Street Business https://mainstreetbusiness.com