Real estate investing is still alive and well

We live in a time where nothing is certain; however, real estate investing is still alive and well. Now more than ever investors are able to use different techniques and creative funding to make their real estate investing dreams possible! Age doesn’t even factor in, to make your investing plans a reality. And today we want to take you to that particular element of investing, and beyond.

What I am referring to is IRA’s of course! Although IRA’s have restrictions, they are easy to work with a long as you know their restrictions in advance. For the sake of time let’s focus on Self-directed IRA’s.

These IRA’s provide the opportunity to save money on tax-deferment or tax-free in the future. Also, as the investor you will not be limited to mutual funds, stocks, or even bonds. It is considered an entity that can work together with others. This opens you up to what many investment opportunists use already as their common strategy and it’s a fairly easy process you can learn as well!

Before you jump head first into the shark invested water of real estate investing you should consider a few things:

  1. Take time & find your perfect investing partner- There are many places that offer “easy” money, or “effortless” projects. Really look deep into their turnover rates, ask for references of who they have worked with, or just search them online! The truth is out there. There are also companies such as Olea Investing, or Columbus Cash Buyers, who will hold your hand (should you need it), has a team of professionals that have worked years if not decades in the Real Estate field, and genuinely care for the people they work with. Their goal is to serve, and aid in whatever way they can!
  2. Don’t just throw money at your investments- Do your due diligence, set up a strategy with your new partner, and make sure the opportunity matches your strategy! Don’t change your strategy to fit any investment; it’ll end up costing you!
  3. Combine you Self-Directed IRA with other funds- This sounds a bit strange but by having your SDIRA on the order to purchase you now own a percentage of the property, and it will be recorded on the Title.

By having the SDIRA on the Title this will cause all expenses and income to flow through the IRA and not your personal finances. Once the property is sold your IRA will receive a portion of the profit based on your ownership percentage. If a person is disqualified for the property an IRA cannot continue to work with that person without incurring fees and tax penalties, so you will need to make sure your buyer is above board on everything.

Another important component of an IRA is its partnership structure and how one can legally work with family members. Direct family lines, such as your parents, children, or spouses of either are ineligible to partner with you, or provide services to you if you own at least 50% of the investment property. If it is your first time investing in real estate you will probably opt to work with someone who has done a few of these deals already though.

IRA’s even allow you to partner with yourself, as well as the other professionals we have already addressed in this article. How you are able to partner with yourself is pretty straight forward. You can combine your SDIRA funds with your personal savings on a new property. Partnering with other Self-directed IRA’s is also possible and you need to exercise the same steps as above to make sure you both benefit; even groups are allowed with a Self-directed IRA.

Now that you have learned about how to use your Self-directed IRA you may want to actually open one! Again, it is fairly easy. Here are two options.

  1. Open a Self-directed IRA Account with your bank, or
  2. Transfer an existing account into a SDIRA

Don’t forget to add contributions regularly and partner with someone who is well versed in Self-directed IRA investing. They will help explain the process, give you great direction, and help you on your journey into the world of IRA’s.

Now you are step up and ready to get started no matter your age with a Self-Directed IRA. And should you have any more questions about using your Self-Directed IRA in Real Estate Investing our team is here and eager to help you! Just call  (614) 665-6506

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