Investing In Real Estate With Your IRA
The Little Known Strategy To Create Predictable Wealth So You Can Retire Comfortably
It seems like every day you hear about Wall Street investors who are frustrated with the unpredictable returns that they’re getting from their stock investments. By some estimates, investors see an average annual return over a decade of just 2%-3%… maybe 6% at the best of times.
And all stock market investors are living in fear that they’ll see a repeat of the 2007/2008 economic collapse that drained retirement portfolios and forced many people to work longer instead of retire.
If you’re sick and tired of investing in Wall Street stocks, and if you’d like to find a different way to get a safe, secure, and predictable investment, then you’ll love to read this…
You Can Invest In Real Estate Inside Your IRA!
Fortunately, there’s a little known way to grow your IRA using real estate.
That’s right — you can invest in real estate inside your IRA (most people don’t know this).
We are not financial advisors and by no means should this guide be meant to act as financial, tax, or legal advice. However, very few people even know this strategy exists so we want to tell you about it so you can do your own due diligence and talk to your professional advisors to decide if it’s right for you.
The Self-Directed IRA for Real Estate
Most people are familiar with the “standard” IRA — one that is managed by an IRA company. You can’t put real estate into these types of IRAs. However, you can hold real estate inside something called a “Self-Directed IRA”.
A Self-Directed IRA has been around for a while, but only a few know about them. It’s a retirement account that has the same tax benefits as a normal IRA… but you have more flexibility in deciding what you want your IRA to be invested in. It’s helped by an IRA custodian (which is a company that holds onto your IRA for you and helps you with transactions).
You can invest in many different types of investments in your Self-Directed IRA, including…
- Real estate (commercial, income generating rental property, rehabs, etc.)
- Promissory Notes secured by mortgages (i.e. – private lending)
- Tax lien certificates
- Limited partnerships
- Sub-C corporations
- Real estate options
- Some types of precious metals
- … and the normal investments like stocks that your normal IRA can invest in
Basically, this opens it up so you can buy investment real estate with your IRA… or be a private lender in real estate.
(There are a few things you can’t hold in a Self-Directed IRA, including collectibles and life insurance… and some custodians add additional restrictions as well.) But you most definitely CAN invest in real estate inside your IRA and that is a HUGE benefit that you should seriously consider taking advantage of.
More About Self-Directed IRA Custodians
We love working with great Self-Directed custodians. Here’s a few that we know and respect:
- Guidant Financial (expensive, but gives you true checkbook control, which is huge) – https://www.guidantfinancial.com
- Equity Trust – http://www.trustetc.com/
- Entrust – http://www.theentrustgroup.com/
Do some research to find the right fit for you.
Some have more expensive fees than others… and some give more flexibility than others.
Before you sign on with a SD-IRA company… ask them a few key questions.
- What are your fees? – Fees can vary wildly. Some charge an annual fee based on the value of the account, some charge an annual fee, some charge large setup fees, etc. Find out what works for you. But, the idea is that by being able to invest in real estate with your IRA… you’ll more than make up for the fees you’re paying with your higher returns.
- What’s the process for approving an investment? – Some companies can take up to 30 days+ to fund an investment after you send it in for approval. Some SD-IRA’s give you what’s called “true checkbook control”, where you actually get a checkbook where you can write checks from your IRA account… which gives you immediate access to the funds (i.e. – to close a deal quickly). Checkbook control usually is a tad more expensive to set up than an IRA account that requires all investments to go through the sometimes lengthy custodian approval process, but again… find out what’s best for you.
- Are there any restrictions on what I can invest in? I want to invest in real estate and make private loans. – Some SD-IRAs with larger more traditional companies like Schwab and SmithBarney put restrictions on what your account can invest in. Some don’t allow real estate… while others do. Just ask.
- Is my retirement account eligible to “roll over” into a SD-IRA? – Not all retirement accounts can be rolled over into a self-directed IRA. Most IRAs can be… and even some 401(k)s can be. Just ask your financial advisor and ask the representative at the SD-IRA company you’re working with.
- How long will it take for my account to be up and running and have funds available for investment? – Some people wait way too long to get this process rolling. If you know you want to use your IRA to invest in real estate… get the ball rolling on getting it rolled over into a SD-IRA account asap. Some companies may take weeks or even over a month to have your account setup complete and ready to invest. So, don’t wait until you’ve found a great real estate deal to get started… get started today so your funds are ready to invest when you need them.
Here’s Why A Self-Directed IRA Is A Powerful Real Estate Investment Strategy…
Many people scrimp and save their whole lives and try to put a bit of money away for retirement while also trying to keep up with the high cost of daily life. This creates a problem: it’s hard to maintain consistent contributions into your account.
That’s why we love helping investors put cash flowing real estate into their Self-Directed IRA. A cash flowing investment inside an IRA is like making regular contributions each and every month — without making the sacrifices from your own paycheck! It’s like getting a raise!
You bring home your paycheck and can choose if you’ll put any money into your IRA (or not)… but you have the peace-of-mind confidence to know that your cash flowing properties are still contributing for you month-in and month-out.
Some investors have discovered that they can even retire sooner than they ever thought possible, thanks to the power of these cash flowing contributions.
Is It The Right Time For You To Get Off The Sidelines And Start Investing With Your Self-Directed IRA?
If you feel a self-directed IRA may be a great way for you to invest a portion of your retirement in things you know (rather than the unpredictable stock market)… then dive in, take some time to educate yourself on the pros and cons of a SD-IRA (those websites I put above are a great place to start. They have all kinds of resources to learn more about self-directed IRAs and how you can use them to invest in real estate).
If you have any questions on how you can work with us as an investor… just connect w/ us through our contact form or call us anytime at: (916) 206-9989. We offer discount investment properties in West Sacramento and surrounding areas to investors like you who often buy them and keep them as rentals. Also, for those qualified investors who want to explore private lending… contact us and we’ll talk about how we work with private lenders as well.
Happy investing! We’re here as a resource for you so don’t hesitate to connect with us anytime.