About Tracy Z

Tracy combines her knowledge of cash flow notes with the power of marketing online to help grow your business! She can be reached at Tracy@NoteInvestor.com 1-888-999-7905 or at Exposure One Marketing.


  1. Tracy, good article. I think the issue to be determined on the pending SD IRA lawsuits has to do with negligence, not fraud. Where I think the custodians are most vulnerable is not on the investment vetting side. If you’ve ever asked a custodian for a recommendation or point of view of any kind, they are very careful to not give advice. And while the court will have to determine the custodian’s role in vetting the investment provider, I believe the term self-directed will ultimately hold up in court.

    Where they’re going to run into trouble is negligence. And not intentional negligence, but the type of negligence that surfaces when you’re in a low margin business that is expanding very quickly. Staffing and training are a real problem right now in this industry and mistakes like those described in the WSJ article are probably rampant:

    “She said she received regular account statements, first from Equity Trust and then from a second custodian, showing nearly $20,000 in the account—even after she learned that the investments had failed.”

    This wasn’t because the custodian was in on the scam. They just never received any notice that the money was gone. Why would they? It’s not their job to manage the investment or the provider, only to “custodian” the investment on behalf of the client’s IRA.

    The answer? I usually advise clients to stick to the bigger brands, although the 2 named in the article are 2 of the biggest and most established. Your best bet is to set up a Solo(k) which by law does not require a custodian and allows the owner of the account to act as their own custodian. If you don’t qualify for a Solo(k), then consider setting up an LLC in front of your SD IRA so you have direct control over you funds. You can research both options on our website at www. freedomgrowth. com.

    Thanks Tracy for sharing this.

  2. Tracy Z says

    I love it when readers are inspired to comment! I also received an email comment I wanted to share (but will leave off the name out of respect since they did not choose to publicly post):

    Hi NoteInvestor – I read the original WSJ article when it appeared & couldn’t help think it was written by some PR firm for a Wall Street Investment house…it & your article seem to suggest that SD IRAs are somehow more risky…when that is not true. These lawsuits are bogus…Proves its still legal to be a moron!

    I happen to agree with these thoughts on the WSJ article and that the lawsuits against the custodians are bogus. I tried to convey that in my commentary after the WSJ excerpt.

    All investments have an element of risk but I would much rather trust my judgment then that of a stock broker or some corporate insider. That is why I personally use a self directed IRA.

    For the record…I am pro Self-directed IRA! I’m adding this comment to be sure that I adequately expressed this viewpoint.

    Thanks again for your comments and emails! It is always great to hear from readers. These type of topics usually get people talking (as they should)!

    All the best,

    Tracy Z. Rewey

  3. The lesson here is never use private investors’ money to buy notes and mortgages. Also, when you read your custodial agreement your IRA has with the custodian, there is a very good chance your IRA will have to fund the legal defense fees of the law suit brought against them. Another reason to stay away from private investors because if you blow a deal with your own money you won’t be suing yourself… just real bummed out. So, use your head and keep life simple, buy discounted notes and mortgages with your own money and stay away from all the risks and liability associated with private investors. You do NOT need their money to buy notes!

  4. Carlton White says

    More regulations will be introduced in this area. Too many people want to invest without risk and will use the government to protect them if they suffer a loss. If regulations become too onerous the self directed IRA as an investment will vanish. Custodians will be targeted as liable parties in failed transactions and will not want continue administering these accounts.

    • Tracy Z says

      Sadly, I agree your predictions could come true. The self-directed retirement account is one of the few tools that investors and the self-employed can use to save for their retirement with tax advantages. We sure know we can’t depend on Social Security.

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