Maximize Your Retirement Funds With Self-Directed IRA Real Estate Investments
Thank you to Ian Robertson of Madison Trust Company for sharing this overview.
Most investors are aware of the opportunity to invest in stocks, bonds, and mutual funds with an IRA; however, many are unaware that IRA funds can also invest in alternative assets outside of Wall Street. Real estate is the most common alternative asset purchased, with some of the wealthiest individuals making it an integral part of their investment strategy. Using IRA funds to make these investments becomes a natural transition for many experienced real estate investors.
Benefits Of Investing In A Real Estate Syndication With A Self-Directed IRA
-
Diversification – Each asset, whether it is an alternative or standard market product, reacts differently to the same event. Investing in a variety of assets can minimize risk in your portfolio.
-
Steady Income and Tangible – Unlike the volatile stock market that fluctuates quite often, real estate usually retains its value at minimum. Even if the real estate market value decreases, you will still have the physical property that can continue to generate cashflow.
-
Deferred Taxes – As with any traditional IRA investment, the profit generated has the potential to grow tax-deferred until you take a withdrawal. If it is a Roth IRA, profits could accumulate entirely tax-free, meaning you wouldn’t even have to pay taxes when you withdrawal funds.
-
Invest More In What You Love – A Self Directed IRA allows you to invest in alternative assets that you understand and fit well with your personal financial goals.
How It Works
-
Open an account with a Self-Directed IRA Custodian. Be sure to read up on the reviews to ensure that you are getting the best possible customer service, price, and overall investing experience.
-
Fund Your Self-Directed IRA via a rollover or by making an initial contribution.
-
Instruct the Self-Directed IRA Custodian to invest your funds in the asset of your choice, which in this case is your preferred real estate syndication.
Ongoing Maintenance
All cash flows, such as net proceeds, are paid through the IRA. Keep in mind that your real estate investment must be used for investment purposes only and cannot be used for you or your family member’s personal benefit. Using the property for non-investment purposes could potentially trigger a Prohibited Transaction.
The Main Takeaway
Using a Self-Directed IRA to invest in a real estate syndication is a great way to diversify your portfolio and have protection against economic fluctuations, all within a tax-advantaged retirement account. Using your Self-Directed IRA funds, in addition to any personal investments made into a syndication, can open the door to more opportunities and long-term growth.
Be sure to conduct due diligence and discuss with a financial professional to make sure this investment is right for you. You may also speak to a Specialist about any questions you may have surrounding the Self-Directed IRA process.
Be sure to get your free copy of my book and audiobook, “Next-Level Income” here.
– Chris
Subscribe to The Next-Level Income Show