Yes, it’s true that US residents (as defined by law) can indeed use their IRA money to invest in real estate provided the defining rules are followed. Of course, there are rules, but aren’t there rules for just about anything in life? It’s probable that your brokerage firm or bank never told you that this could be done. If you went to your bank or brokerage firm and asked them directly, “Can I hold real estate in my self-directed IRA?”, they may look at you as if that was the stupidest question they’ve ever heard and probably tell you, “of course not!” Let's just say that financial institutions are interested in selling you the financial products within your IRA that make them the most money. You may think you have a self-directed IRA but it’s more likely that you have made choices from those presented to you by your brokerage firm / bank that of course make them the most money. You don’t likely have a true self-directed IRA, but something that’s disguised to appear that way.
There are detailed rules that have to be followed and there are firms that provide truly self-directed IRA’s. The types of property you can hold within an IRA are broad and most companies won’t tell you the whole truth. True self-directed IRA’s are available from many companies throughout the United States but you probably haven’t heard of them because they don’t have huge advertising budgets to spend on self-promotion. These operators administer self-directed IRA’s and they don’t charge you fees for all of the investments in your IRA. They simply charge you for maintaining your IRA in which you place your various investments which could include various types of real estate. Again, there are rules to follow but they will be able to help you to tailor your self-directed IRA to your needs while adhering to all the government rules.
By investing in real estate, you can get monthly cash flow, and can profit from appreciation when the property is sold. AlmaVesta Group focuses on finding multi-family properties that have value add within them and we execute those value aspects of a property to “force appreciate” it. When we do that, we do not need to rely on market appreciation. Of course, all the proceeds must stay within the IRA until you reach retirement age.
Many people accept poor returns as status quo within their IRA, whereas reasonably good, solid real estate investments are available that give much better returns over the short and long term. Coupling these gains with tax deferral makes this a viable choice for the intelligent investor. We don’t purport to be tax experts or accountants, and offer this information for you to decide which approach is best for you. The following list includes self-directed IRA administration companies that can help you get to your goals. We have no affiliation with any of the following companies, and we encourage you to do your own research prior to making any investment choices whether they are in real estate or some other form.
EXAMPLES OF SOME SELF-DIRECTED IRA PROVIDERS
Equity Trust Company
Elyria, OH 44035
888-382-4727 begin_of_the_skype_highlighting 888-382-4727 end_of_the_skype_highlighting
Sterling Trust Company
P.O. Box 2526
7901 Fish Pond Road
Waco, TX 76702-76710
800-955-3434
Pensco Trust Company
450 Sansome Street, 14th Floor
San Francisco, CA 94111
800-969-4472
Fidelity Investments
100 Summer Street
Boston, MA 02110
800-343-3548
Guidant Financial Group
13122 N.E. 20th Street #100
Bellevue, WA 98005
888-472-4455
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