By J.P. Dahdah, Founder & CEO of Vantage
Are you wondering whether you could buy/sell/rent real estate through your Self-Directed IRA?
The answer is YES!
Investing in real estate in a Self-Directed IRA is a perfect example of how the restrictions of a brokerage IRA that backs you into only stocks, bonds, and other traditional options are lifted.
For many independent investors, this level of empowerment can be life-changing. Here are the top 4 ways to invest in real estate with your Self-Directed IRA.
- Purchase with Cash – The Most Straightforward Approach: With sufficient funds, you can purchase a property outright. All ongoing expenses are paid from your Self Directed IRA, and all income/profits are returned to your IRA.
- Partner with Family, Friends, or Business Associates: If you don’t have enough funds for a cash purchase, your Self Directed IRA can purchase an undivided interest in a property. For example, your Self Directed IRA could partner with, friend or business associate to buy a property for $300,000. The friend could provide 70% of the purchase price ($210,000), and your Self Directed IRA could purchase the remaining 30% ($90,000). All ongoing expenses must be paid in relation to your percentage ownership. In this example, for a $3,000 property tax bill, the friend would pay $2,100 (70%) of the invoice and your Self Directed IRA would pay $900 (30%). Likewise, if the property collected monthly rent of $2,000, the friend would receive $1,400 (70%) and your Self Directed IRA would receive $600 (30%).
- Provide a Private Loan to a Borrower Who Uses Real Estate as Collateral. You’ll see more about this in our Private Lending section, but in essence, your IRA can act as a mortgage lender.
- Invest in Another Entity than Real Estate; for example, you could invest in a company that was then investing in real estate.
And best of all, when you open a Self-Directed IRA account with Vantage, the process for purchasing real estate is simple, efficient, and cost-effective.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or Info@VantageIRAs.com.