Jun 15, 2013
Use IRA and 401K Plans for Real Estate Investments
Did you know the funds in your IRA could be used to 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 real estate investors create large nest eggs by investing in what they know and understand. By establishing a self-directed IRA in Florida, real estate investors can combine their knowledge and expertise of the real estate market with the tax advantaged growth of their retirement plan, creating the ultimate wealth building machine.
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 the current rapid recovery of the real estate market, now more than ever is the time 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 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!
The first step in purchasing real estate for your Self-Directed IRA is to contact a Realtor who is knowledgeable in finding properties suitable for this type of investment. 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 is to become an educated investor. We recommend attending a workshop or seminar about buying real estate in a 401K or IRA offered by your local Self-directed IRA administrator.
The local Self-directed IRA Administrator I work with is Entrust Administrations Services, Inc. based in Lake Mary, FL. To learn more contact me at info@ownerdirect.us.
*Neither myself nor my brokerage is in any way affiliated with Entrust Administration Services, Inc. nor are we compensated by them. Please do your own due diligence.