self directed ira for real estate

Investing In Real Estate With Your IRA

Real estate is currently experiencing a 30-year low in various markets. Recent reports in prominent publications such as the Wall Street Journal and the New York Times highlight the trend of major Wall Street firms shifting their focus from stocks to real estate investment due to the potential for higher returns.

Why do most Americans continue to rely on the stock market for their retirements, IRAs, and 401ks?

Simply put, many are unaware of better alternatives.

Learn how to diversify your portfolio by investing in real estate with your IRA. Discover the benefits, strategies, and steps to maximize your retirement savings.

Before we delve into the details, it’s important to note that we are not financial advisors. This guide is purely for informational purposes and should not be construed as financial, tax, or legal advice. Prior to making any financial decisions, we recommend seeking guidance from your own professional advisors.

The Self-Directed IRA for Real Estate

Have you heard of a Self-Directed IRA? This investment option has been in existence for quite some time. In recent years, individuals have become increasingly aware that their IRAs may not be generating satisfactory returns, and in some cases, they are even losing money. As a result, many investors, perhaps including yourself, are exploring alternative avenues to potentially achieve higher returns using their IRAs.

Discover the power of the “self-directed IRA” in Kansas City.

A self-directed IRA in Kansas City allows you to take control of your retirement investments. While it offers the same tax advantages as a traditional IRA, the key difference lies in the freedom to choose where your funds are invested.

With a self-directed IRA, you have the flexibility to invest in a wide range of options, including real estate, private placements, precious metals, and more.

  • Explore a variety of investment opportunities including real estate (commercial properties, income-generating rentals, rehabs, etc.)
  • Diversify your portfolio with Promissory Notes secured by mortgages through private lending
  • Consider investing in Tax Lien Certificates for potential high returns
  • Participate in Limited Partnerships for shared real estate ownership
  • Utilize LLCs for asset protection and tax benefits in your investments
  • Consider Sub-C Corporations for specific investment strategies
  • Benefit from Real Estate Options to maximize your investment potential
  • Explore investment opportunities in precious metals for portfolio diversification
  • Include traditional investments like stocks in your IRA for a well-rounded investment approach

Basically, this opens it up so you can buy investment real estate with your IRA… or be a private lender in real estate.

Are There Restrictions?

Yes, there are indeed restrictions to consider when investing in real estate within a Self-Directed Individual Retirement Account (MOIRA). These restrictions may apply to the type of real estate you can buy and hold, as well as the allowable investments in precious metals. Additionally, the custodian of the SDIRA may impose their own set of investment limitations.

Curious about the role of a custodian in an SDIRA? Let’s delve into that further.

These are important aspects to understand when exploring investment opportunities within your SDIRA.

Self-Directed IRA Custodians

The SD-IRA loophole, established by the US Government, empowers investors to have more autonomy over their investments while retaining tax benefits. However, to prevent misuse, there is a requirement for a custodian to oversee these SD-IRAs.

Acting as the intermediary, the custodian, typically the Self-Directed IRA company you are associated with, plays a crucial role in the investment process. They set forth guidelines on permissible investments, timelines for fund deployment post-approval, and varying levels of active involvement. Some custodians even offer the flexibility of a checkbook for direct investment from your SD-IRA.

Selecting the right custodian is imperative. Here are a few reputable custodians we recommend:

Do some research to find the right fit for you.

Some have more expensive fees than others… and some give more flexibility than others.

What To Ask A Self-Directed IRA Company Before You Work With Them

Before you commit to partnering with an SD-IRA company in Kansas City, MO ([market_zip]), make sure to ask them a few critical questions.

  1. What are your fees? – Fees can vary widely in the real estate investing industry. Some companies charge an annual fee based on the account’s value, while others have setup fees or different fee structures. It’s crucial to understand the fee schedule and ensure it aligns with your investment goals. Remember, the potential returns from real estate investments can often offset the fees incurred.
  2. What’s the process for approving an investment? – Approval processes can differ significantly among investment companies. Some may take up to 30 days or more to fund an investment after approval. Consider companies offering “true checkbook control” options where you have immediate access to funds for quick deal closures. While checkbook control setups may be more expensive, they provide flexibility in managing your investments. Choose a process that suits your investment timeline and preferences.
  3. Are there any restrictions on what I can invest in? I want to invest in real estate and make private loans. – Certain self-directed IRAs may have restrictions on eligible investment options. Traditional companies like Schwab and SmithBarney may limit real estate investments. Ensure your chosen account allows the investment avenues you are interested in pursuing. Clear any doubts regarding investment restrictions before proceeding.
  4. Is my retirement account eligible to “rollover” into a self-directed IRA? – Not all retirement accounts are eligible for rollovers into self-directed IRAs. While most IRAs can be rolled over, some 401(k) accounts may also qualify. Consult your financial advisor and the self-directed IRA company to determine the rollover eligibility of your specific retirement account.
  5. How long will it take for my account to be up and running and have funds available for investment? – Timing is crucial when setting up your self-directed IRA for real estate investments. Initiate the process promptly to ensure timely availability of funds for investment opportunities. Some companies may take weeks or even longer to complete the setup process. By starting early, you can have your funds ready when the right investment opportunity arises.

Unlocking the Potential of Your Money in Kansas City

If you believe that a self-directed IRA could be an excellent vehicle for investing a portion of your retirement funds in tangible assets you understand, rather than the volatile stock market, it’s time to explore the possibilities. Take the initiative to educate yourself on the advantages and disadvantages of a self-directed IRA. You can start by visiting the websites mentioned above, which provide a wealth of resources to help you understand self-directed IRAs and how they can be used for real estate investments.

If you are interested in collaborating with us as an investor, reach out to us through our contact form or give us a call at (816) 724-6679‬. We specialize in offering discounted investment properties in Kansas City and neighboring areas to investors like yourself, who often purchase them for rental purposes. Additionally, we welcome inquiries from qualified investors looking to explore opportunities in private lending. Feel free to contact us, and we can discuss how we partner with private lenders.

Happy investing! We are dedicated to being a valuable resource for you, so do not hesitate to reach out to us at any time.