Yes, its true! But most people do not know that they can invest their IRA funds in real estate.
Why is that?
Because the financial establishment, banks, brokerage houses, credit unions, etc. don’t make money when you invest in real estate.
In fact, they lose money when you take your IRA funds out of investments they sell!
Its that simple and that selfish. They would rather have you lose money, lose your retirement dreams than tell you that you can put your money into investments other than those they sell, typically limited to stock market investments.
We have even had clients tell us their banker or broker told them it was illegal to invest their IRA in real estate!
If you check with the IRS, (http://www.irs.gov/publications/p590/index.html) you will see that they allow you to invest your IRA funds in real estate and anything else you want, except life insurance and collectibles.
Imagine, you are no longer condemned to stand by idly and watch your retirement dreams disappear before your eyes in the stock market. If you were beginning to think you would have to spend your Golden years at the Golden Arches, take heart!
You can now reap exceptional profits from real estate investments, just like other investors. Even early retirement can became a reality again!
If you are currently a real estate investor, you now have another source of capital for your deals. Rehabs, pre-construction deals, rentals, etc. can now be funded with your IRA funds. Join forces with certain family members, friends, business partners and put together your own pool of investment capital, or your own private bank, for larger deals.
If you are not knowledgeable about real estate or simply don’t want to take an active role in your investments, there are other possibilities such as investing in mortgages or tax liens, limited partnerships, LLC’s; there is virtually no limit.
This way, you can collect tax free interest payments with no management headaches and without special knowledge.
This is a great way to make up for your stock market losses. The law allows your IRA to earn unlimited profits, every year. What about the $4,000 per year limit to your IRA? It only applies to contributions, not profits.
Of course, there are rules and prohibitions that apply to investing IRA funds in real estate. This is the IRS, after all. For instance, you cannot buy or sell property you currently own to your IRA. You also cannot buy that condo in Miami and use it yourself, it must be for investment only.
Remember, this is your tax deferred retirement money which you are not supposed to benefit from until you retire. Any use of the money before age 59 ½ would count as a withdrawal and would subject you to penalties and taxes.
But with the right guidance, those rules have not prevented our clients from being able to stuff their IRA’s with tax free real estate profits and fat monthly interest payments.
Which you can too!