Real Estate IRAs

Real estate is a favorite investment because of its physical nature. You can see and touch real estate in a way that is impossible with securities investments. Real estate is also popular because of the strong returns that are possible. Good real estate investments can yield returns equal to those of successful start-ups in the center of the dot-com boom. It is unfortunate then that so many traditional IRA custodians exclude real estate transactions in IRAs in their care.

By opening a self-directed IRA with a company that specializes in non-traditional IRA investment strategies, you can not only own real estate you can also flip it for profit. It works like this. You open an IRA with the right IRA advisor and custodian. They help you set up a Limited Liability Company which is owned by the IRA. The LLC can then purchase real estate and pay for any repairs or renovations and then sell it whenever you want.

An IRA LLC gives you, the IRA owner, the ability to write checks directly from your IRA for any related expenses. This keeps you in step with the law and allows you to avoid the numerous transaction fees and delays associated with traditional IRA custodians. When given this kind of freedom, you either need to have the knowledge and experience to make wise investments or you need a good advisor who can keep you on the right track.

Owning Real Estate, Both Foreign and Domestic Some people will tell you that you cannot own foreign real estate within an IRA. Within a traditional IRA, this is true. Within a self-directed IRA LLC, however, you can own any type of property you wish--anywhere in the world. The major concern with foreign real estate investing is local stability. If you invest somewhere that is prone to coups and instability, you run a higher risk of having your assets seized and losing your investment. This is another reason that an able advisor is so important.

Written By Scott Janko, The National Association of Financial and Estate Planning (NAFEP)

For more details on the Self Directed IRA -ICO^SM Click Here.
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