10 Advantages of Self-Directed IRA’s in Real Estate Investing
Did you know the US Social Security Administration defines financial security as those people who have $3,000 per month of recurring income at the age of 65? Unfortunately, only approximately 5% of Americans achieve this and are able to retire at the age of 65. We have been led to believe that investing in things like the stock market and bonds will help us achieve a good RIO, but we also know that isn’t really the case. The stock market has averaged only an 8% return and is barely keeping up with inflation.
Earlier this week, we discussed 15 Powerful Ways to Invest in Real Estate with Your Self-Directed IRA. The great thing about a Self-Directed IRA is that it can benefit you as an investor AND as a borrower to fund your real estate investments.
I also mentioned last week the iPlan Group, who are a Self-Directed IRA administrator. The CEO of iPlan Group is a real estate investor herself. The profits in the Self-Directed IRA are either tax deferred or tax free. It gives the account owner full control over account management and investment selection.
Having a Self-Directed IRA has 10 core advantages, which I’ll review with you now:
- Allows you to rapidly compound your ROI
- Asset protection
- Allows you to build wealth for future generations
- Investment diversification
- You can invest in what you know
- There are seven different account types that can be Self-Directed
- Almost anybody can have a Self-Direct IRA
- You can invest using a small balance
- Millions of dollars available to fund your investments
It’s all a matter of becoming an expert at Self-Directing investing so when someone has a retirement account and wants to get involved in a different type of investment they think of you to work with. Trust me, there aren’t many people that I meet that tell me “I’d rather be investing in the stock market” when they know they can Self-Direct and get larger returns on more private offerings.
To listen to and download the full episode of Strategic Real Estate Investing Radio, click here.
To review our post about 15 Powerful Ways to Invest in Real Estate with Your Self-Directed IRA, click here.
Homestead Road Case Study
Now let’s take a walk through a home we flipped and sold on Homestead Rd. out in rural Ohio. It’s a perfectly example of everything we’ve been talking about regarding Self-Directed IRA’s. We purchased the house for $41,500 and needed approximately $38,500 in repairs. We financed this house by a private lender who had his money already sitting at Equity Trust, which is a Self-Directed IRA company. Between his first mortgage from his traditional IRA and his second home mortgage from his Roth IRA, we had about $79,000 of funding.
Our investor was able to make a tax free investment out of his IRA and we were able to buy the property using none of our own cash or credit. Since we bought the property for $41,500 and received $79,000 in funding, we were able to get an extra $39,000 at closing to use for rehab.
The property sold within 3 weeks – we asked for $139,000 originally and secured a buyer who paid $124,000 meaning we received $34,000 in profit with zero dollars of our own invested in the property and we never swung a hammer!
Watch the full video and tour of the house here and learn more about traditional vs. creative real estate investing:
Create Your Own Personal Bank
Lastly, I would like to offer a special invitation for you to join me and Matt Tillack of the iPlan Group (America’s #1 Self Directed IRA Custodian) for the Self Directed "Personal Bank" master class. All this talk of Self-Directed IRA’s has got to have you interested, so follow this link to register for the class now.
We will tell you exactly how you and your investors can easily avoid the unpredictability of the stock market with private deals. Most of these profits are tax-deferred or even completely tax-free – trust me, this is one you DON’T want to miss.
I hope you to catch you online later.
And as always, please leave me feedback on any of our social media pages on these classes, our e-books and any other content we produce!
CEO Strategic Real Estate Coach
CEO Freeland Ventures and Freeland Lending
CEO Yellow Jacket Properties
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