Author Archive
What About George?!? Like Many of Us – He Dreams Big – Will His Dream Come True?
Posted on September 5, 2012 byThe Dream
George L., a client of American IRA, LLC, wanted to purchase a 56 unit, 1.2 million dollar mobile home park inside his IRA account.
The Details
George was determined to make this dream a reality and worked hard in negotiations with the owner of the mobile home park finally settling on these details:
- Purchase price $1,200,000
- Down Payment $200,000 from an old 401(k) plan
- Owner financing $1,000,000 at 6% interest
A Word of Caution about Loans inside an IRA
The American IRA account specialist informed George that the owner financing needed to be “non-recourse” to qualify for IRA financing.
The account specialist explained further that “non-recourse” means the property is the only collateral; neither George L. nor his IRA can be held liable.
George went back to the table with the owner and was able to negotiate non-recourse terms for the owner financing. Read More→
Testing the Water with Land Banking?!
Posted on July 30, 2012 byAre You New to Self-Directed IRA Investing?
Many people are not sure if they have enough money in their IRA/401(k) account to even begin thinking about investing with it via a self-directed account. We have many clients who have taken accounts with small account balances and grown them into sizeable accounts simply by making one successful investment at a time. In this article, we will share the story of one of our clients, David G.’s 1st self-directed Roth IRA investment. David G., by the way, grew his account from $6,800 to $293,000 in 5 short years.
David G. Decides on What His First Self-Directed Roth IRA Purchase Will Be
David G. was new to self-directed IRA investing and said “I wanted to ‘test the water’ with an easy first investment. Land was a good choice because it requires very little management.”
David G. Finds a Great First Purchase
David G. wasted no time in finding the land he wanted to purchase. He found an oversized, undeveloped, 1.87 acre residential lot. This lot had a low selling price of $18,900 (in comparison to its actual market value of $31,000). The lot really had a lot of value and appeal within it as it contained: water, sewer, a great view, and an additional upside potential to split the lot into 2 parcels. Read More→
Real Estate Investors Know the Real Estate Market is Swelling With Opportunity
Posted on June 25, 2012 byTidal Wave Warning: Real Estate Investors Know the
Real Estate Market is Swelling with Opportunity!
Grab those Real Estate Investment Opportunities and
Get that Cash Flowing!
Cash Flow Real Estate in Your IRA? You Betcha!
The folks on TV talk a lot about the importance of funding your IRA – and they’re always on about investing in stocks, bonds and mutual funds. Some of the more conservative pundits also mention annuities and CDs. But what if you’re not thrilled with the prospects for return in any of these assets?
After all, interest rates are still near record lows all along the length of the yield curve, and bonds may well not even keep up with inflation. Stocks, as an asset class, are limited by a slow outlook for growth – and stock dividends are nowhere near what they were a generation ago. Mutual funds? Well, you can’t get blood out of a stone. Fund returns are limited by the opportunities in the asset classes from which they come.
One option that is less well-known is this: Investing in real estate within your IRA. The tax code doesn’t restrict you to stocks, bonds, annuities and CDs in your IRA or any other retirement fund. In fact, with just a few restrictions on investing in life insurance, jewelry, gemstones, collectibles and certain forms of precious metals, you can take advantage of tax deferral in an IRA to invest in almost anything you can imagine. Read More→
Rental Properties in Your IRA
For legions of investors frustrated with puny yields on savings and bonds, slow growth retarding stock market returns, and the usual substantial risk involved in security investing (any given stock or bond can potentially become worthless overnight), we have good news: The combination of declining real estate prices and steady or increasing rents have opened up a window of opportunity in real estate for income-oriented investors. In fact, years after the “smart money” was selling off real estate ahead of the bubble collapse, we are seeing signs that smart money is getting back in the real estate market. Indeed, up to 20 percent of residential real estate now sold is sold to investors – and not just to “play and pray” amateur property flippers, but to value-oriented investors as well, who are seeking to generate immediate positive cash flow.
Advantage for IRA Owners
This is a big development for IRA investors, because generating cash flow sufficient to maintain properties is important for IRA owners. Because you are restricted to $5,000 in new contributions to IRAs every year ($6,000 for those over age 50), you have to pay for any needed repairs or renovations to properties either with cash in the IRA, bringing on a partner, non-recourse debt financing, or other retirement assets you can roll over into the account. When you can realize immediate positive cash flow from a property, however, net of financing costs and taxes, that takes a lot of the pressure off, and makes owning real estate in an IRA much simpler. Read More→
