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5 Reasons You SHOULD Buy Real Estate In Your IRA | Episode 196
FromSelf Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
5 Reasons You SHOULD Buy Real Estate In Your IRA | Episode 196
FromSelf Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
ratings:
Length:
8 minutes
Released:
Mar 9, 2016
Format:
Podcast episode
Description
Last episode, I gave you 5 shocking reasons that you should seriously consider NOT putting real estate investments inside of a self-directed IRA. But there are two sides to the coin, and today I give you 5 great reasons that your IRA is a perfect home for great real estate deals. I’m Bryan Ellis. This is episode 196.-----Hello, SDI Nation! Self Directed Investor Radio is here for one purpose: To help YOU make great investments. So let’s do that right now.Ok, so I know, I know, I know. If you heard yesterday’s show – which is available to you right now at SDIRadio.com/195 – I’m betting you think I’ve flipped my wig, as I spent the entire episode giving you really strong reasons NOT to use your IRA to buy real estate. This is, after all, the Self Directed Investor Radio, where self-directed IRAs are a key focal point.But look… the truth is that I’m primarily interested in helping you to make GREAT investments, and a big part of that is the legal structure under which you acquire your assets. And sometimes an IRA is the perfect solution. Other times, it’s really not. Unlike your IRA custodian, I don’t have a bias towards any particular structure. The only result that matters is that you make a great investment.So today, I give you the counter argument – 5 strong reasons that your IRA is a GREAT place for your real estate investments, starting with #1: Tax savings.Yes, that’s right… there are a lot of taxes to be saved by properly using an IRA. Specifically, if you’re using a Roth IRA, you could save a ton, because those profits will be 100% totally tax free… and that’s the best possible scenario. But even if you use a traditional IRA – which has the nasty side effect of subjecting your profits to very high ordinary income tax rates rather than comparably low capital gains tax rates – it could still be tax-wise to go that route if you expect your income to be relatively low during retirement. Honestly, it’s a murky question. Best to get advice from your financial advisor.So that leads us to reason #2 to use your IRA to invest in real estate: That’s where the money is! This one is practical, sure. But here’s the deal: If you’ve got a great real estate deal that requires $200,000 in capital, and the only place you happen to have the capital available is in your IRA – even a traditional one – then by all means… go for it! You’ve got to invest that money somewhere, and you can’t pull your profits out of the IRA without penalty before retirement anyway. So don’t generalize my tips from last episode so much that you miss a good opportunity.Reason #3 to invest your IRA funds into real estate: It’s called Turnkey Rental Property. Why do I say that? For those of you who may not be familiar, Turnkey Rental Property is a cool situation in which an investor purchases a property that’s already renovated, occupied by a paying tenant, and under the watchful eye of a competent manager. So it’s a complete package, and on the very day you buy the property, you start collecting cash flow, and the property manager handles basically everything for you. Why is this relevant to your retirement funds? It’s because one of the biggest risks of investing in real estate through your IRA is that you’ll somehow, someway deliver “services” to your IRA. What is a “service”? Well, it’s not really defined, but one thing we know: If you do it, you’ve committed a prohibited transaction, and that means your IRA is going to take a MASSIVE hit in taxes, penalties and interest. And by investing in Turnkey Rental Property, you’re doing a very strong job of insulating yourself from delivering any “services” and thereby protecting your retirement portfolio.Reason #4 to invest in real estate through your IRA: Real estate can be molded to fit your specific needs. For example: If you have 30 years before retirement, you might consider investing in real estate with overwhelming potential for appreciation. If you pick your market wisely, tha
Released:
Mar 9, 2016
Format:
Podcast episode
Titles in the series (100)
SDI 014: Making 9-15% Cash on Cash Every Six Months! PLUS: Oil Prices and Real Estate Values: If you could earn 9-15% cash-on-cash every six months, you'd be interested, wouldn't you? Tune in to learn more! PLUS: How oil prices - and their crazy fluctuations - affect YOUR real estate portfolio... it's NOT how you think! by Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's