Buying Real Estate with Your Self-Directed IRA

[Celia Moore]

Since 1975 Wall Street has been able to keep a secret; It is possible to invest retirement funds in Real Estate. Not only is it legal but diversification strategies would dictate it the prudent thing to do. Real Estate is not an “alternative” investment, it is the REAL investment.

Purchase of Property

1. Establish a self-directed IRA. Simply moving your IRA to a custodian that allows self-directed investments can accomplish this step though a "Checkbook IRA" provides the ultimate in flexibility and convenience.

2. Find the desired investment and negotiate the purchase. The purchase agreement should be written between the seller and the IRA or the IRA's new LLC. Any money required for earnest money, inspections, etc. should be funded using retirement funds and cannot come from the IRA's owner or other disqualified sources.

3. If financing is necessary the loan must be to the IRA or it's LLC. The loan must be non-recourse to the IRA owner.

4. Use your Checkbook IRA to write the check for the purchase or request funding by the custodian to close the new investment. It's that simple!

Get Ready Today

As the old saying goes; be prepared. Although purchasing a property with your IRA is a simple process, planning and preparation are essential. The IRA must be able to make the acquisition and cover any carrying costs the investment may require. The process to establish a self-directed IRA can take roughly two to four weeks, though when established a purchase is merely a written check away.

Establish your self-directed IRA today and you will be ready when opportunities arise.