Real Estate IRA LLC
What is a Real Estate IRA LLC?
A Real Estate IRA LLC is generally also referred to as a Self Directed IRA LLC or a Checkbook Control LLC. In the case of a Real Estate IRA LLC, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder. The IRA Holder’s IRA funds are then transferred by the Custodian to the LLC’s bank account providing the IRA holder with “Checkbook Control” over his or her IRA funds.
Real Estate is an IRS Approved Investment
The IRS has always permitted real estate to be held inside IRA retirement accounts. Investments with a Real Estate IRA are fully permissible under the Employee Retirement Income Security Act of 1974 (ERISA). IRS rules permit you to engage in almost any type of real estate investment, aside generally from any investment involving a disqualified person.
A Real Estate IRA LLC Offers Checkbook Control
Having checkbook control over your IRA funds will permit you to make real estate investments with your IRA funds. You will no longer be relegated to investing in traditional securities and mutual funds, instead you will have the ability to diversify your investment portfolio and invest in real estate.
A Real Estate IRA Offers Growth Potential
A Real Estate IRA can offer the opportunity to greatly accelerate the growth in your retirement portfolio. With a Real Estate IRA you can take advantage of the high growth real estate investment sector while benefitting from the tax free IRA benefits.
As an alternative to the stock market, income-producing real estate properties can provide consistent income as well as long-term gains through appreciation. There are no limitations on the types of properties that can be held by a Real Estate IRA. A few investment possibilities include residential, commercial, industrial buildings, raw land, foreign real estate and farm land. You can also invest in real estate related notes, liens & options.
Real Estate IRA in Today’s Market
The residential and commercial real estate market has taken a dramatic downturn generally due to the subprime mortgage meltdown. While it’s a bad real estate market for current owners and landlords, it’s a great investment market for real estate investors with capital. The Real Estate IRA is perfect for any person looking to diversify their retirement funds by investing in the high growth real estate market. With a Real Estate IRA, you can act quickly on a great real estate investment opportunity. When you find a real estate investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment. The Self Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.
Use Leverage with your Real Estate IRA
The Real Estate IRA can then be utilized when making a real estate investment all in cash, or may be used when using a non-recourse loan to fund an investment. A non-recourse loan is the only type of loan allowed for a Self Directed IRA. A nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, but for which the borrower is not personally liable.
A Real Estate IRA Eliminates or Reduces Custodial Costs
With a Real Estate IRA, you can save a lot of money on custodian fees. When setting up a Real Estate IRA, IRA Financial Group utilizes a passive custodian that charges a very low annual fee and provides excellent customer service.
Setting-Up a Real Estate IRA is Easy
IRA Financial Group makes setting up your Real Estate IRA easy, effortless, and inexpensive.
How it Works
We take care of everything. The whole process can be handled by phone, email, fax, or mail. You can expect the process to set up a Real Estate IRA to take about 15 days. If your current custodian is expedient in releasing your funds, it will take even less time. Additionally, you will have access to our IRA experts for free consultation anytime. Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.
The Real Estate IRA Process
STEP 1: A Real Estate IRA account is established with a passive custodian in preparation of funds being transferred from one or more existing IRA accounts.
STEP 2: A Limited Liability Company (LLC) is formed with the IRA account holder designated as Manager.
STEP 3: The Manager directs all, or a portion, of the retirement funds held by the Passive Custodian into the LLC bank account.
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Did you know? For real estate, a Self-Directed Roth IRA LLC should be formed in the state where the real estate will be purchased.