Welcome to Invest In Arizona Properties! - Buyer Representation

Some Things You Can Do:

Your Real Estate IRA can buy and sell many types of real estate including raw land, rental properties, condos, fixer-uppers, commercial properties, lakeshore, etc.

Keep in mind it's the self-directed real estate IRA that buys, owns and sells the property. Not you personally. You don't withdraw the money from the IRA to buy the property- the custodian buys the property in the name of your self-directed real estate IRA.
The property can be rented but the rental income is paid to your IRA, not you.
All expenses of renting and operating the property must flow in and out of your self-directed real estate IRA.
Be sure your self-directed real estate IRA has enough liquid reserve funds to cover operating expenses, improvements, etc.
It is possible to finance a property that is owned by your IRA. But the financing must be "non-recourse." That means the property , not the IRA account, is the sole security for the loan. Most traditional lenders won't provide non-recourse financing. However, seller financing or private loans are possibilities. Let me emphasize again: get good professional advice before taking any action.
Your real estate IRA can buy a partial interest in a property. This is useful if your IRA doesn't have enough money to buy 100 percent of the property. It could be a partner and own a fractional interest.

Some Things You Can Not Do:

Your real estate IRA cannot buy property that you, your spouse, or certain family members already own. Likewise, your real estate IRA cannot sell a property it owns to you, your spouse or certain family members.
You, your spouse or certain family members cannot have any personal use of the property owned by your real estate IRA.
Your IRA cannot lease the property to your business. Your business cannot use or occupy any part of the property.

Is a Real Estate IRA Right For You?

So, now you know you can use your retirement account to buy real estate. But the bigger issue is should you use your retirement account to buy real estate? The answer is, it depends on the type of real estate and your unique situation.

You already know your real estate IRA cannot own property that is used by you, certain family members or your business. Therefore, primary residences, second homes and vacation homes are not candidates.

In addition, a rental property that produces a tax shelter from depreciation deductions would probably not be a good fit because the tax shelter would go to waste in your retirement account.

Other types of real estate, such as raw land, fixer uppers, and non-leveraged rental properties, are perfect candidates. The profits from theses investments would be taxed if you owned the property personally. However, if your real estate IRA buys, owns and sells the property, the profit would compound in your IRA tax-deferred (or tax-free if its a Roth IRA)!

There is a limit on how much you can contribute each year to your retirement account. But there's no limit on how much the account can earn!

Last But Not Least:

Before your IRA buys any property, you've got to understand how real estate works. There's a lot to it. Make a commitment to learn how to
analyze a property before you buy it, including operating expenses and management considerations. Study the financial benefits such as cash flow, depreciation and appreciation. Learn how to determine cap rates, cash on cash and other rates of return. And so on. The more you know, the better the chances of success.
Remember that real estate IRAs are a specialty and not every retirement account administrator/custodian is geared up to handle them. In the
"Resources" section below I've included several real estate IRA custodians (as well as some other resources) to get you started. Bear in mind, there are other custodians and you need to find one that's right for you. Check out their web sites or call them.
If you're in the real estate profession, I hope you can see the huge potential of real estate IRAs. Think of the millions that are sitting in the retirement accounts of your potential clients. Get out there and help them take advantage of a great opportunity!

And finally, if the choices you've made so far for your retirement account aren't taking you where you want to go, find a new vehicle. Real estateopportunities are everywhere for those savvy enough to recognize them and motivated to take action.

Resources:

Entrust (1-800-392-9653) www.entrustadmin.com
Lincoln Trust (1-800-825-2501) www.lincolntrust.com
Sterling Trust (1-800-955-3434) www.sterling-trust.com