Real Estate IRA – Don’t Miss the Buyer’s Market

We all hope we are nearing the end of this buyer’s market…but what a great time it is for the smart investor.  As loan qualifications have gotten stricter buyers are looking for other investment avenues.

A growing trend is using a self-directed IRA/401(k) to purchase real estate. Yes, you can use your retirement funds to invest in real estate. All types of real estate investments are allowed by the IRS: residential, multi-family, commercial, industrial, land etc. Keyword here is INVESTMENT.  This is only for investment property. You can not use your IRA to invest in a home for yourself or even a second home.  You can have no direct dealing with the investment property.  Your IRA owns it not you and you always want to keep your tax-deferred status.

Did you know you can also secure a loan with your IRA to purchase real estate? You can only do this with a non-recourse loan.  There are a few reputable non-recourse lenders out there that cater strictly to self-directed IRA real estate investing. Typical loan to values are around 60% to 70%. All loan payments are paid directly from your IRA and all rental payments go right back into your IRA…tax-deferred or tax-free depending on the type of IRA you have.

Self-directed real estate IRAs are quickly becoming the wave of the future.  Investors want to have their retirement funds in assets that they know instead of being at the mercy of Wall Street.