HOW TO INVEST IN REAL ESTATE USING YOUR RETIREMENT ACCOUNT?
I often speak to investors who are frustrated that their retirement accounts aren't performing well, and they're fearful about the market volatility and about inflation. So, they wish they could diversify into real estate, but all their funds are trapped in their employers 401ks or their financial planners IRAs. And they think they're trapped there until they're 59 and a half years old. Additionally, there are
Often too busy to become landlords what is little known by the middle class? But highly exploited by the wealthy is that those funds don't have to be trapped. Although you can't spend retirement funds until you're 59 and a half years old. You can roll them into what are called self-directed IRAs or 401ks and those plans can be used to invest in real estate and a bunch of alternative assets. They can also be used either for active investing.
Or completely passive real estate investing. So, if you don't have time to be a landlord, you can invest passive late that way most of us aren't aware of these options because our employers the representatives, usually only provide a handful of limited menu type of items, right? The traditional investment in bonds, mutual funds index, funds stocks. And real estate is not something on the list. So how to invest
In real estate with your retirement funds, the first step is to identify a company that can help you set up a self-directed account. These are generally known as custodians and they're typically very helpful in identifying. What type of self-directed account you should use what, what’s best for you? And to facilitate all the paperwork for getting that done, once you have an account, like that established, you're now free to invest that money, as you see fit, no more men. You were, you have to choose
Just from what a financial planner of your employer's has said, you have to invest it. So now you can invest in real estate. If you want to get into cryptocurrency, you can do that precious metals are something you can invest. You want, buy gold bars, go for it. Even promissory notes, private lending that sort of stuff is allowed. Now there are some things you can't do; you can't buy Collectibles like art and Jim's for example you can't buy Life Insurance.
It's with it, and you can't invest with disqualified persons and there's a whole list of those, but basically a lot of that has to do with your family members. You can't invest with them and you can't do any self-dealing which is basically things that would benefit you now before you're retired. So, such as like, buying a personal vacation home. So, there's a list of things you can’t do, but there's a lot more that you can do than what your current plan is usually offering. Another thing you can do is you can leverage your money.
So, you don't have to take the entire amount of your retirement account and go buy one piece of property with that. You could just take a small piece and use as a down payment for a larger property so that you can get the benefits of scale. Now, depending on the size of your retirement account, sometimes the banks won't lend you in a retirement account. If the balance of what you're putting down, is small compared to the overall value of your account or the value of the loan,
And rather you need to have enough money to Source support that, but investors can get around that by investing in real estate syndications. We're basically they pull money from many investors to go, buy something big and they get a big loan and the general Partners in that syndication, they're good. The ones who are going to sign on the loan, you are not. So that's a way to kind of get around that. So that gives you leverage and Le to invest in a larger real estate deal, which
Generally, tends to have better returns and then it's all passive to because you don't have to do any of the work. So, it opens up a host of possibilities because you can invest in all sorts of commercial acids, it could be apartment communities, it could be retail, it could be mobile home parks or offices Self Storage, even RV parks. The list is fairly, extensive of what can be syndicated out there and it's completely passive reaping all the benefits.
If it's of investing in large real estate without having to be the landlord and you are still a true owner. So, you still get all the tax benefits of that as well. So, if you're ready, take greater control of your retirement account setup. Consider setting up one of these self-directed retirement plans. After all, it's your retirement and you deserve to have every option on how to grow it. If you need some recommendations on some custodians, that can help you set that up by all means.
Email me and I can send you a list of a few companies that I have worked with if I can answer anything else.