Building Bank with Real Estate Assets in an IRA

Do you have a flair for home renovation projects? Have you ever considered becoming a landlord and earning income on rentals? Do you have a knack for identifying raw land that is ripe for commercial real estate development? Did you know you can invest in these assets using retirement funds—and build wealth to secure your future?

Self-directed IRAs and similar retirement plans open a whole new world of investing potential when itCouple works with Realtor comes to real estate. If your answer was “yes” to any of the questions above, we suggest you explore this world, especially if you are familiar with the industry in any way.

Self-directed plans are unique in that account owners control their own retirement funds and investing decisions. You are able to build what could be significant wealth by investing in what you know best. Because real estate assets offer many diverse options—both in the United States and overseas—many individuals are somewhat knowledgeable about the investing potential. And, many people are putting that knowledge to work to build wealth in their retirement portfolios.

Case in Point for Real Estate Assets in an IRA

Roger and Elizabeth have moved several times over the years. Both found they enjoyed looking for new houses and turning them into homes. Each time they moved in, they would spend time painting and making other cosmetic upgrades so their new place fit their needs and desires. Each time they moved out, they made tidy profits thanks to their renovations and growing experience. One day, they found themselves settled in a nice little town—with no exciting move in the foreseeable future. They realized they missed the activity, from the search for the perfect place to choosing colors and cabinets and countertops…

Elizabeth suggested they look into investing small rehab-and-flips to do for fun. When speaking with their CPA about the logistics, Roger discovered they could use real estate investments like this to build tax-sheltered retirement income. All that was required was enough funds in a self-directed IRA to purchase and fully fund the rehab projects! He learned that if they didn’t have enough money in their retirement account to fully purchase an asset that they could partner their IRA funds with their personal monies or even another IRA to invest.

Luckily, Roger and Elizabeth had been just as diligent in their retirement planning efforts as they had been in successfully renovating their previous homes. They decided to go for it. Within a short tim, they opened a self-directed IRA, transferred funds from an existing IRA into the new account, and began investing in real estate rehab projects. In no time at all, because of their knowledge and experience, they were able to build considerable bank in their self-directed account by doing so.

A Few Points to Ponder

While many people like Roger and Elizabeth find real estate investing fun and exciting (and profitable!), there are aspects of doing so that every investor should know. There is great potential, but tagging along comes risk, as well. There are also some rules to follow set forth by the IRS, which must be followed in order to maintain your self-directed IRA’s tax-advantaged status.

To learn more about real estate in an IRA, please contact Advanta IRA. We allow all types of diverse assets in the self-directed plans available to our clients.

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About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.