If you're like me, you know IRA real estate investment is a good thing, and you want to put your IRA to good use. But you don't look forward to the hard work of learning all about how to find good IRA real estate investments and how to avoid losing your money by buying wrong.
Well, give me a couple of minutes here, and I will help you get a framework of the whole subject of IRA real estate investment. You'll then be able to relax and quietly go about filling out your knowledge of this very profitable investment area. You'll know where all the different bits of advice fit together, and will be able to be independent as you read and learn.
OK, the first thing about these IRA real estate investments is easy: they are phenomenally attractive (I mean, almost insanely profitable) because when the members of Congress first created IRAs in 1974 they deliberately built tax advantages into the system. For decades, ordinary people, like you, have been using the tax advantages of IRAs to leverage relatively small cash investments into sizable retirement nest eggs. And its all legitimate, simple and powerful. If you get it right.
Second thing about IRA real estate investments is that you can approach them in two basic ways.
One way is to purchase a property with your IRA and either defer the taxation until you cash up years later (probably on a lower salary, which is to your advantage) or pay no tax at all. Either way, a prudent purchase should give you capital gain as your property rises in value from the time you bought until you eventually sell, and along the way will yield regular rentals from the tenants you put in the property.
But this gets even better, because your IRA is actually cash, so you have the upper hand as you approach a bank which is wanting to sell a property. Cash is king, and you can drive down the bank's asking price by offering them immediate cash. Thus making your capital gain even greater when it comes to sell.
You can find a lot of good information out there about this use of the different IRAs that have been developed. As you read, make sure you study up the pros and cons of the more-recent Roth IRAs, as these are tax free in certain circumstances. Which makes them virtually licenses to print money, if you set up your Roth IRA right and buy astutely. (And you can learn to do both these things, or have them done for you by a turn key facilitator)
The other way I like to think about IRA real estate investments is that you can use them to lend to an investor, using a financial instrument like a promissory note.
This is obviously a great way to go in many respects. You put your money in the hands of a proven investor who will purchase a home, then repair it, put tenants in and maintain it. That's a lot of trouble and inconvenience off your shoulders right away, and all the time the investor is paying you interest on the loan.
A reliable investor with a sound turn-key program can become a source of regular income for you. The main downside is that you don't get the capital gain which the investor will pocket when he eventually sells. And another potential problem is that in some circumstances you will be obliged to take back the property, and if the investor bought it at an inflated price you could have a lot of problems on your hands.
So, there you are. Two types of IRA real estate investment are yours for the taking.
Many people like you opt for simply lending to an investor in return for regular interest payments. This is a reliable strategy where the investor is reliable and his company's finances are sound.
Many others buy their own IRA real estate investment, giving them control, rental income and tax-leveraged capital gain as their equity grows over time. This is a robust strategy, and works particularly well if you find a way to set up your IRA and buy the investment home as turn-key as possible.
In conclusion, keep alive your dream of profiting from the wise placement of your money in safe, leveraged real estate purchases. People exactly like you are doing this as you read. IRA real estate investment really can work!
Also, I recommend you read more about the two investment strategies I've outlined. And if it would help you, I have detailed information about them at my web site, ira-investmentpower.com, that people find helpful.
Leo Nardt writes extensively about setting up a retirement nest egg for yourself using your IRA. Click and get a free print copy of a book bursting with ideas and suggestions, at his website http://www.ira-investmentpower.com