The heavily-discounted properties and bank-owned real estate properties we see for sale today represent a tremendous opportunity for buyers to take advantage of today’s real estate market. With lenders becoming more restrictive and interest rates on the rise, customers have been seeking alternatives to finance their investment real estate purchases.
One of the best alternatives is investing in real estate through a Self-Directed IRA. There are several reasons to consider buying investment real estate using funds from your IRA, but the most prominent one is that any profit that is generated from the investment is tax-deferred, just like the earnings from your regular IRA or 401K. Once you have decided that you would like to make an investment in land, the process of buying through your IRA is pretty simple:
1. Create a Self-Directed IRA account through an Independent IRA Custodian (Several companies offer this type of product.)
2. Rollover funds from your current IRA or 401K and place the funds in your new self-directed IRA account (no penalties incurred).
3. Purchase investment real estate through your Self-Directed IRA account.
The Self-Directed IRA option is ideal for anyone who is looking to either invest in real estate now for better returns when the real estate market comes back, or for anyone who is looking to purchase income property for cash flow in retirement. It is also a great opportunity to simply take advantage of today’s low prices, by purchasing in the current market rather than waiting for 5, 10 or 15 years. It is also a great resource for those investors looking to buy, rehab and "flip." Use the funds in your IRA to buy, rehab and re-market. Once the property is sold, you also shelter the profits just as you would iif you made a profit from a stock purhcase in your IRA account. You can keep buying and flipping, and building wealth for retirement. Or, you can accumulate income properties for steady cash flow in retiremenet. You can even purchase land for investment!
If you’d like to know more about how to purchase investment real estate through a self-directed IRA, call me at 616.648.0800 or 616.791.0110 ext. 2121 or e-mail me at donaldrphelanjr@ameritech.net. Visit me on the web at www.donphelan.com
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