Real Estate IRA?
Hi all,
I just wanted to see if there are any investors out there that use self-directed Real Estate IRAs for purchasing their investments. If yes, can you please list the details of how this would work. Thanks!
Yes, IRA use in RE is enormous, and there are some big trustee companies who specialize in helping their IRA Acct holders do just that.
Suggest you get Pub. 590 from IRS website, or at their office, and read it over, then look in on some of the biggest IRA Trustee/Custodian Co sites...Equity Trust, Pensco, Entrust all in this business.
Basic rule is IRA can buy and hold and sell RE, but isn't allowed to borrow or obligate itself on loan, so IRA's use needs to be as the "cash partner" or cash REI in any deal it's in.
But get and read #590 and it'll answer lots of your questions.
John Merchant
Make sure you set this up as a ROTH IRA, not a traditional IRA. All gains in the portfolio will then be tax free. You can do 5-6 houses per year before it will start looking like a business. But you can set these up in your name, your spouse's name and your kids' names, in essence, expanding how many investments you can do in a year's time. Actually, Ron LeGrand has an in-depth course on how to do this...it involves trusts and land trusts, but he recommends a particular broker in Ohio who knows how to do this inside and out.