Financial Freedom with Real Estate Investing MB488: How to Use Your Retirement Funds to Invest in Apartments (No Wall Street or UBIT) - With Damion Lupo
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Most people don’t know this—but you can invest your IRA or 401(k) in real estate instead of leaving it trapped in mutual funds. In this episode, I’m joined by Damion Lupo, founder of eQRP, to explain exactly how to unlock your retirement savings and use them to invest in apartments, storage, and more. We walk through the process step-by-step, dispel common myths, and show you how to avoid one of the biggest tax traps most investors don’t even see coming: UBIT. Whether you’re a passive investor or a GP raising capital, this is a must-listen.
Key Takeaways
Why Most Investors Don’t Know About This
- Financial advisors don’t promote these options because they lose fees when you take control.
- Most investors have old 401(k)s or IRAs they’ve forgotten about—but those funds are eligible for self-direction.
- Online platforms like Schwab and Fidelity won’t show you the option to invest in real estate—you have to know to ask.
How Self-Directed Accounts Actually Work
- Self-directed IRAs and solo 401(k)s give you full control—you can invest in real estate, crypto, gold, and more.
- The right setup gives you checkbook control and removes delays caused by custodians.
- Solo 401(k)s (like EQRPs) offer faster transactions, better flexibility, and fewer limitations than traditional IRAs.
The UBIT Tax Trap—and How to Avoid It
- Using leverage in real estate deals inside a self-directed IRA can trigger UBIT—up to 40% in surprise taxes.
- Solo 401(k)s are exempt from UBIT, even in leveraged deals.
- You can convert from an IRA to a solo 401(k) before the deal sells to avoid the tax completely.
Smart Strategies for Passive and Active Investors
- Passive investors can use these accounts to invest in syndications—earning tax-free or tax-deferred returns.
- Active investors (GPs) can raise more capital by educating others on how to invest through their retirement accounts.
- Damion’s team offers tools like books, webinars, and white-glove onboarding to help GPs guide investors through the process.
Rules, Limits, and Legacy Planning
- You can’t use these accounts to buy personal assets, rehab your own property, or benefit directly from the investment.
- You can borrow up to $50K from your solo 401(k) for any reason and pay yourself back—with interest you choose.
- Setting up retirement accounts for parents or family members can create powerful tax-free legacy wealth.
- Roth solo 401(k)s allow real estate investing with leverage and no taxes on gains—making them the most powerful tool in the tax code.
Connect with Damion Lupo
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Resources
Access the #1 FREE Apartment Investing Course (Apartments 101)
Schedule a Free Strategy Session with Michael's Team of Advisors
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Join the Nighthawk Equity Investor Club
Review the Podcast on Apple Podcasts
Get the Book, Financial Freedom with Real Estate Investing by Michael Blank
For full episode show notes visit: https://themichaelblank.com/podcasts/session488/