There has been a change or revolution, if you dare call it, taking place in the United States. What is it you ask? The use of IRA’s for real estate investing. That’s right Abdo Romeo , many people, especially baby-boomers, are no longer depending on traditional methods for investing their IRA’s. The unpredictable and volatile stock market along with low paying mutual funds and CD’s are no longer the main stream for retirement planning. IRA investing in real estate has quickly become the way to secure those future years of bliss! And for those individuals that have already lost so much, it may very well be the only way to stay afloat and pull their heads out of the sinking sand.
IRA real estate investing makes up for approximately 50% of the U.S.’s net worth per capita, and almost twice that much of wealth is acquired through real estate. But sadly enough, only a few percent of that is acquired from IRA investing in real estate. So why is it that so many people are still not using their IRA accounts for real estate investing? The raw simple fact is ‘ignorance’ (lack of knowledge) or self education. People are just not educated on the facts of IRA’s and real estate investing. You would be amazed at how many CPA’s still have no clue to the fact that their clients could be using IRA’s for real estate investing and that it is actually ‘legal’. Yes, that is right an individual can put their IRA into a ‘self-directed’ IRA and actually make the decisions themselves as to what happens to their retirement nest-egg. Of course you have to keep in mind that it takes a good CPA to help you keep those large profits. To do this many individuals use some form of business/company such as a corporation or LLC, but I can not, nor would I, attempt to advise anyone in this matter. You should consult your real estate attorney or CPA for further information and advice on this matter.
The catch to using an individuals IRA for real estate investing is that it is restricted for the sole purpose of investment only, but investments can be made in the U.S. as well as internationally. Did you know that IRA’s used in real estate investing can get up to 70% bank non-recourse financing to purchase income-producing investment properties. Results have shown triple to quadruple return on investment on all-cash IRA investments in real estate.
For example let’s imagine that you had a property on ‘Land Contract’ and put a future owner in it that will purchase the property from you in 12 months. Obviously dollar amounts, all time periods, and interest rate vary, but I’ll use this for the sake of an example. The future owner gives you a non-refundable deposit of ($3,000) and make monthly interest rent payments of ($600). The new owner is responsible for all taxes and repairs. At the end of 12 months the future owner purchases the home for a profit of ($30,000). Now if you add that up for a 12 month period it was a ($3,000) deposit, ($7,200) total monthly payments, and ($30,000) cash-out for a total of ($40,200) interest profit in 12 months! Try to acquire that in one year using traditional methods. I have four words for you. NOT GOING TO HAPPEN!
It is easy to see why there is this revolutionary new way of investing taking place in the U.S., of using IRA’s for real estate investing verses traditional methods. As an investor myself I have seen first hand the changes taking place and the opportunity at hand. The wealth to be made is amazing and retirements will be secured once again. And so I guess the question is; Are you one of those people? Are you financially prepared for your retirement future? Or are you one of those people who just want more and will not settle for less than the best? Which is great, don’t get me wrong. The point is, why settle for less if you can have your dream and security all by using your IRA and investing in real estate. Or maybe your at that point and have little to no retirement. The new laws can help you as well. I have seen the changes the laws have made first hand in this business and there is hope.