Self-Directed Funds – Your Ticket to Financial Freedom?
Self-directing your IRA offers you the option to make your own investment decisions with a range of alternative investments for your savings – including real estate.
Real estate makes a solid investment for your IRA and can give you a cash stream as well as long-term appreciation. It also means that you can buy and sell properties without taxation.
Self-directing real estate IRAs can put you in control of your funds. Stocks, shares and intellectual property are all common investments, but not as familiar to most us as real estate. By choosing to go with something you know, you’ll know the language being spoken.
What can’t I do through self-directing?
Any work on your properties must be done by a third party – meaning that you can’t provide any required labor yourself. You also can’t live in the property and self-dealing – selling a property you own to the IRA provider – is a big no.
How does it work?
The IRA provider uses the funds to purchase and maintain the property – and when it generates cash either through rentals or sales, those funds go directly back to the IRA and can be used to buy other assets.
Choose an IRA provider authorized by the IRA to handle real estate. You’ll be able to select the property and negotiate the terms for any deal, negotiated by the provider.
As with all investments it’s essential to do your homework and get legal advice, but with both a cash stream and appreciation, self-directed real estate funds have the potential to give you the financial freedom you’ve been looking for.
Disclaimer: The Company introduces general information and education concepts about self-directed retirement accounts (such as 401(k) and IRA accounts). Like any investment, there is risk in using retirement funds for investing in real estate assets. It is possible to lose a portion or all of an investment in real estate – including those purchased with retirement funds. Please review IRS Publication 3125 regarding the use of retirement funds for alternative investments. The document can be found at: http://www.irs.gov/pub/irs-pdf/p3125.pdf. Every individual is different, with unique circumstances. We do not offer tax, accounting, financial or legal advice. Prior to acting upon this information, you may consult your own accounting, legal and financial advisors to evaluate the risks, consequences and suitability of that transaction. The Company is not a retirement account custodian, trustee, or securities dealer.