Rules About Buying Real Estate Within an IRA Account


Using an IRA for real estate investment purposes can be highly profitable, as long as you make the right choices and follow the rules. Here are some of the things that you need to consider.

Choose Your Custodial Company Carefully

As with anything else, there are good companies and some that are not so good. It is not unusual to see companies charge high fees when someone is buying real estate within an IRA account. Sure, more paperwork is involved, but really good companies do not charge higher fees for handling the paperwork. Their annual fees are based on your total account value, so they have a vested interest in “wanting” your fund to grow.

Some custodians won’t even allow you to use your IRA for real estate investment purposes. And, of course, if that option is not offered, you’ll have to transfer your fund or take a roll-over.

Learn the Rules

Roll-overs are only allowed once per year, but you may conduct several transfers. It could be costly, because custodians could charge penalties for transferring the fund in a short period of time, but if you happen to choose the “wrong” custodian, it’s nice to know that you have the option.

There are a number of rules that apply specifically to buying real estate within an IRA account. For example, you cannot use the account to buy property intended for personal or familial use. You can only use an IRA for real estate investment purposes, when the transaction will benefit your future.

Direct or indirect benefits to you or your close family members can cause the IRS to disallow the transaction, which will be accompanied by heavy taxation.

Learn Where the Market is growing

You might not think it is a good time to use an IRA for real estate investment. It’s always a good time, as long as you know where the market is “hot”. There are some areas of the market that have been mostly overlooked for nearly the last twenty years. In those areas, there are long waiting lists full of people that want an affordable home, but none are available. So, buying real estate within an IRA account can benefit you and other people, as well. You can offer affordable housing to people that deserve it.

Learn from the Mistakes of Others

It has been said that a smart investor learns from his own mistakes, but a wise investor learns from the mistakes of others. There are those who are willing to tell you about the mistakes that they have made along the way, so that you can learn how to “wisely” use your IRA for real estate investment deals. But, whether you learn from me or someone else, get more information before you begin buying real estate within an IRA account and be successful. There you have it, time to get out there and discover the options and possibilities.

Start researching and planning. Others are already doing so.

To get started on accomplishing your retirement goals, choose a real estate turnkey company to invest your self-directed IRA money in real estate. This is the best investment strategy that will allow you more flexibility considering today’s economic environment for building a secure financial future.

Isn’t your financial future worth it?

Discover Some Rules For Buying Real Estate With Roth IRA

If you are interested in buying real estate with Roth IRA funds, take some advice from an experienced investor. There are successful examples of a roll over IRA buying real estate and there are some failures. Learn from the mistakes of others and you can be one of the latest success stories.

Everyone makes mistakes, but when it comes to buying real estate with Roth IRA money, mistakes are costly. Let’s start with choosing the wrong custodian and go from there.

Here’s an unsuccessful example of a roll over IRA buying real estate. A man chose to take a roll-over from his traditional account and chose a custodian that offered self-investing. He deposited the funds into the account well within the 90 day time period to avoid IRS penalties.

Once he started reading the fine print, he realized that the custodian he had chosen took 45% of his earned interest on un-invested cash balances. He also learned that for each transaction, he would be charged fees ranging from $25-$150. He did a little research and found a different custodian that only charged a reasonable annual fee, while offering more investment options.

When buying real estate with Roth IRA money, you will almost always have an “un-invested cash balance” and you are likely to conduct numerous transactions per year. So, per-transaction fees can really add up.

The man truly believed that a roll over IRA buying real estate was the right choice for him, but he realized that he had chosen the wrong custodian. Instead of transferring the funds, he took another roll-over that year.

The IRS only allows one tax-free rollover per year. So, the total dollar amount of the fund had to be included in “other income” at tax time. The result was a devastating bill that almost bankrupted him.

This man, whose name I won’t mention, made two mistakes. First, he didn’t read the fine print or shop around BEFORE he signed up with the custodian. Second, he failed to read the IRS rules for roll-overs and was unaware that transfers were a better choice.

Breaking the self-dealing or indirect benefit rules is responsible for some of the failures, when it comes to a roll over IRA buying real estate.

Buying real estate with Roth IRA funds must be kept an “arms-length”. Your account cannot buy from you or for you. Those are some of the rules that you need to know before you begin.

Knowledge is everything when it comes to the success of a roll over IRA buying real estate.

A different man grew the value of his account from $20,000 to over a million in less than three years. He started out slowly by flipping vacant lots, making $1000 profit on each transaction.

Now, he holds the mortgages on several properties. He’s only one of the success stories.

Buying real estate with Roth IRA money can be highly profitable, as long as you get the information that you need, ahead of time.

Considering today’s economic environment, selecting IRA real estate turnkey solutions can be the best investment strategy for building your retirement wealth.

Visit my website now to learn more about investing your Roth IRA money in real estate. Using a turnkey solution can be the best investment strategy to accomplish your financial goals.