Thank you for visiting today. If this is your first visit, take your time and look around. I have plenty of information and resources available to you. If you are a return visitor, thank you. I would be pleased to hear from you and tell you how I can serve all your Commercial or residential real estate needs.
Unlock your IRA Buy Real Estate
Is your IRA trapped in the tired ‘old world view’ of investing in stocks, bonds and mutual funds? Did your investment advisor fail to mention that your IRA can invest in Real Estate, mortgages, leases and dozens of other assets? Have high-net worth individuals used this tool for years to build investment wealth, while reducing or eliminating tax liabilities? If you answered yes to any of the above, read on.
More than 30 years ago, Congress passed legislation which led to the creation of IRAs with tax incentives to motivate citizens to save for retirement. Today there are roughly four basic types of IRAs: Traditional, Roth, SEP and SIMPLE, each with distinct tax benefits and limitations. While it’s true that all IRAs are created equal, not all IRA providers offer investors the full-menu of investment choices available. Why? Investment advisors typically do not promote investments that do not generate commissions. Only Self-Directed IRAs allow investment in both traditional and non-traditional assets, like real estate, mortgages, notes and many other choices.
“Unlocking Your IRA,” is a relatively simple process. In fact, you don’t need to be wealthy to purchase income-generating assets within a tax-advantaged IRA!
There are three things you should know when you self-direct your retirement plan:
1. Which is the best plan for you: Traditional or Roth IRA, SEP, Simple or Individual 401(k)?
2. What types of assets would you consider investing in within the plan?
3. What IRS rules, such as Prohibited Transactions, are critical to know to avoid problems?
Before making any investment decision, attend an educational seminar on self-directing. Surround yourself with competent advisors and get the facts, not well-intentioned opinions from un-qualified individuals. A good CPA can identify which plan best and investments fit your financial situation and help you navigate complex tax regulations – well worth the cost. An experienced Realtor® knows the market and will find the property you want, negotiate on your behalf and make sure the deal closes quickly and without hassles.
IRS has specific rules regarding how investors can self-direct, basically they describe ‘who and how’ you cannot transact. Disqualified People include your immediate family and spouses (except siblings), employers, fiduciaries and other individuals. The IRS considers an IRA and its owner as two separate entities and requires that each entity does not derive direct or indirect benefit from each other. The IRS has identified particular investments that are prohibited in your IRA, like life insurance and collectables.
The opportunities outside these prohibited transactions are substantial. First and foremost, IRAs allow you to defer, minimize or eliminate taxes normally associated with retirement investing. Second, you may buy, sell or exchange investment property at any time. There are no minimum hold periods and you may change asset classes, unlike a 1031 exchange which require ‘like-kind’ exchanges and specific performance time-periods. My favorite benefit is that when you sell any asset in you IRA, you pay no capital gains tax; if the investment is held in a Roth IRA, you never pay tax again. Imagine the tax burden you eliminate if you sold one house per year for ten years! IRAs offer flexibility to invest. For example, your IRA can partner with friends, relatives and business associates to purchase property, then, lease it to anyone that is not a disqualified person. Finally, you can roll property from one plan to another – or even take property from your plan as a distribution. This is true investment portfolio diversification that’s truly amazing – truly self-directed!