Now that the stock market has hit an all-time high and real estate is just starting the most significant recovery since the great depression, a lot of investors are looking to allocate some of their capital to alternative investments such as real estate for better returns. In fact, the Seattle Times just examined the aggressive investments made by the Washington State pension system in “alternative investments,” including private equity and real estate.
The question is....Can you the individual investor do this in your IRA?
Technically, yes you can move your IRA funds to a self-directed account and then invest in many alternative asset classes such as real estate.
The big financial institutions that act as custodians for most traditional IRAs don’t advertise that you can do this. They generally limit investments to publicly traded stock, bonds, mutual funds and bank CDs. Why? Mainly because that is where they make a commission on managing your retirement funds-- regardless of whether you have a profit or loss!
So to gain complete control over your IRA fund investments, you may roll your IRA funds over to one of about two dozen smaller custodians offering self-directed IRAs. Once you have a self-directed IRA, you can then begin to place funds into real estate investments which can yield tremendous returns-- if managed correctly. See our full description of how this works at http://reicapitalusa.com/sdira/
Last year Forbes.com published an article titled "Go Rogue With Your IRA" where they described how some IRA holders have found very creative alternatives to investing with their self directed IRA funds in asset classes ranging from private equity and promissory notes to gold, oil and gas and even livestock. To read the full article browse to the link below:
Your IRA can be a great resource for funds to purchase and profit from investment in real estate. Once you have transferred your funds into a self-directed IRA, you will complete a Direction of Investment, and the custodian will then send or wire your funds to the applicable company to acquire the property.
As you make profits from that investment, all income is sent back to your self-directed IRA account and realized as either tax-deferred or tax-free income, depending on the type of IRA. Please consult with your accountant or financial planner for more information specific to your IRA status.
Need More Info?
My REI Capital business partner Bob Malecki and I recently held a live webinar for investors looking for more information on why real estate is an excellent investment alternative to traditional stock and bond investing. It was co-sponsored by the folks at CamaPlan, a self directed IRA custodian with whom we are working to provide their clients alternatives for their self directed IRA investments.
In this presentation we covered:
• The key economic drivers that benefit real estate
• How market and demographic cycles are used to increase ROI
• How to identify and evaluate real estate asset classes
• The operational requirements to be a successful real estate investor
• Funding strategies that fit your abilities and goals
• How to use a self-directed IRA to invest in real estate
You may find an archived copy of this webinar entitled “How to Prosper from Real Estate Investing” at the CamaPlan.com website, or contact us for more information at www.reicapitalusa.com or 425.270.7292.