Wednesday, December 23, 2009

Don't Have the Money to Buy an Investment Property? Think Again.

Do you want to buy an investment property and take advantage of great real estate prices? But do not have the cash.  Think about using an investment vehicle is called a Self directed IRA. Basically, instead of having an IRA made up of stocks, you would have it made up as your real estate purchase.  You can use the money in your existing IRA's.

You would need to open a self directed IRA account. Entrust is largest and financial strongest in industry. Title to the property would be Entrust FBO "Buyers Name" for instance. So the offer needs to start of this way, because everything will need to come from the IRA;  ALL income and expenses. Actually, Entrust will sign the contract.  You will close on the property and Entrust will wire the money to the title company for closing. If you want to rent out your investment, then all rental income will be deposited into your IRA and all expenses will be issued from the IRA account. And when you sell the property all your proceeds will be deposited back into your IRA.

You have control of your investment; 1) what property you purchase 2) who & how much you rent it (if applicable) 3) who you hire the people for repairs & renovations 4) you decide when you want to sell it and how much. You cannot use a self directed IRA for your personal use.


$150 to open an account & $250 per year per asset. For expenses, $5 per check to issue. For instance, they will pay your property taxes for you each year or HOA fees.

Other Items to Consider:

• This investment property does not have the same IRS deductions on your income tax.  For instance, you cannot depreciate your rental property for 27.5 years because your rental property is managed within the IRA. You would need to speak to a tax accountant to find out if more beneficial to take the IRS deductions each year or take advantage of tax benefits of the self directed IRA. But all in all it is a way to pay for and acquire your investment.

• If you sell the property for less than you have in your IRA account, then you have to pay it back by contributions or find another IRA partner or find a loan etc.

• If you have less IRA money needed to make your real estate purchase, you can get a loan for the difference-only one lender in country to do this, or get partner IRA like joint purchase.

More In-depth:

• You can set up an LLC or Corporation. You can have multiple IRA contributing to the corporation to purchase real estate. If you wanted to set up an investment group.

• As your IRA grows large enough, you can lend money like a mortgage to others and gain interest on the loan.

• There are different IRA’s that allows different contributions and different benefits. There is one called Individual K-that has more flexibility. The Entrust Group can explain differences.

• The Entrust Group is located in Lake Mary and has free seminars to investors in Central Florida. Here is their websites: and These website have a lot of info.