Creative Real Estate Financing – Self Directed IRA or 401k may help put you in control

In credit, First-Time Buyer, florida, government, Home Buyer, IRS, Kiyosaki, Qualified Retirement Plan, Ramsey, real estate, Roth-IRA, Self-Directed IRA, Suze, tax credit, Tax Matters on March 18, 2010 at 4:39 pm

There is this thing called “the reticular activator” and it goes something like this. You see something you like, you think you’re the only one on the planet who now owns it, and right at the next corner, you see it.Maybe even in the same color!

Maybe it’s an idea that just pops into your head, and WHAM! There’s the tv ad, radio commercial or friend on the telephone telling you about the same thing. Pregnant women know how this works. Suddenly, it seems everyone they know is pregnant!

For some reason, I am hearing more and more people discuss retirement planning and how to grow their nest-egg and how to take control of their finances. Maybe it’s cuz I’m at the tail end of the baby boom generation (born 1961) and I’m surrounded by concerned boomers and this just happens to be the topic o f the day.

Maybe it’s because with the economy the way it is, retirement plans and pension funds evaporating, that folk are beginning to realize that maybe, just maybe, in another 20-30 years (just like our last major recession about that long ago in the early 80’s), when we’re too old to do anything about it, we may find our savings disappear and so, the buzz is about taking responsibility, learning the ropes and taking control of our future. God knows Dave Ramsey, Robert Kiyosaki and Suze Orman have been talking about it for quite a while now.

Did you know your IRA can purchase real estate?

That’s right, since 1975 IRAs and 401k plans have been afforded the ability to purchase real estate, which has helped many investor create large nest eggs by investing in what they know and understand.  As the famous investor Louis Glickman once said, “The best investment on earth is earth”

By simply transferring your IRA from the bank or brokerage firm you are currently using to a self-directed IRA administrator, you gain the ability to make your own investment decisions, without being limited to the stock market.  With all the uncertainty in the stock market, now more than ever is the time to learn how to take control of your retirement plan and invest in what you know and understand…real estate!

Self-directed IRAs offer substantial tax advantages that have made many millionaire investors. The greatest advantage is that IRA investors pay no capital gains tax when the property is sold by the IRA.

In addition, because the profit from the sale is deposited back into the IRA with no tax on gain or growth, the investor enjoys the power of compound interest to invest in the next real estate deal. Although IRS 1031 exchanges can be used to fund partial IRA investments in real estate, Self-directed IRAs do not have the same limitations and holding periods, thus are much more flexible.

Finally, if you’re like many investors who are tired of poor-performing investments in stocks, bonds and mutual funds, Self-directed IRAs offer true portfolio diversification; i.e., in real estate, to help build wealth via tax-deferred or tax-free income-generating assets!

Your first step in purchasing real estate is to have a trusted Realtor who is knowledgeable in finding your ideal property.

Purchasing real estate with your IRA is very similar to conventional means, but IRS regulations must be observed. As with any investing, it’s always appropriate to have competent advice from tax and legal advisors.

Beyond that, the best remedy to avoid problems with the IRS is to become an educated investor by reading or attending a workshop or seminar on buying real estate in an IRA offered by your local Self-directed IRA Administrator.

The local Self-directed IRA Administrator I work with is Entrust Administration Services Inc based in Lake Mary, FL.  To learn more about the company, visit their website at or call them at 407-367-3472.


*Neither myself nor my brokerage are in any way affiliated with Entrust Administration Services Inc, nor are we compensated by them.  Please do your own due diligence.


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