Purchase Real Estate With IRA
Purchasing real estate with your IRA has become a popular nontraditional investment option for investors. Using your IRA for real estate purchases offers diversification from traditional Wall Street investing for both personal and retirement funds. The 2008 financial crisis taught retirement investors the importance of having a well-balanced retirement portfolio.
Why Work with IRA Financial?
We help our clients take control of their retirement funds and gain the ability to invest in almost any type of investment tax-free. We have helped thousands of clients invest in foreign and domestic assets. When you choose us, you have direct and unlimited access to our in-house tax and ERISA professionals to ensure that all established tax structures are IRS compliant. We offer a full IRS audit guarantee and stand by the legality of our structures and will fully defend their merits against any IRS audit.
Experience You Need
IRA Financial Group has over a decade of experience helping investors self-direct their retirement accounts.
A Team You Can Trust
Our tax and ERISA professionals have helped over 12,000 clients invest $3 billion in alternative assets.
IFG founder Adam Bergman is a leading voice on self-directed retirement & has authored 7 books on self-directing
Tell Us What You Need
Our team will work one-on-one with you to establish a Self-Directed IRA, Solo 401(k) or ROBS solution that fits your goals.
Helpful Tips for Using Your IRA for
Real Estate Investment
Use the Self-Directed IRA LLC funds for the deposit and purchase price for the IRA investment property. You can also use funds from a non-disqualified third-party.
You cannot use personal funds for funds from a “disqualified person.”
All expenses, including repairs and taxes that you incur in conjunction with your IRA investment property should be paid using the retirement funds. Remember you cannot use personal funds.
With some properties additional funds are needed for improvements. All of these funds should come from the Self-Directed IRA used to purchase the property.
When needing financing for an IRA real estate transaction, only non-recourse financing should be used. A non-recourse loan is a loan that is not personally guaranteed and whereby the lender’s only recourse is against the property and not against the borrower.
For self-employed or small business owners eligible for a Roth IRA would not be subjected to IRS Code Section 514. So, purchasing real estate would be and exciting investment.
It’s important to remember that services should never be performed by the IRA holder or “disqualified persons.” The entire real estate purchase should be done by the Self-Directed IRA LLC.
Title of the real estate purchased should be in the name of the Self-Directed IRA LLC. For example, if Joe Smith established a Self-Directed IRA LLC and named the LLC XYZ, LLC, title to real estate purchased by Joe’s Self-Directed IRA LLC would be as follows: XYZ LLC.
Keep good records of income and expenses generated by the real estate investment.
All income, gains or losses from the Self-Directed IRA LLC real estate investment should be allocated to the IRA.
Remember to be diligent on your IRA purchased real estate, especially if it is out of state.
You cannot engage in any transactions with your IRA real estate purchases that personally benefit you or a “disqualified person.”
“What about your IRA, including rollover IRA? You need to look at state law, advises tax attorney Adam Bergman of New York’s IRA Financial Group.”
“Adam Bergman…gets several calls a day from clients like McDermott looking to invest their retirement funds in real estate. ‘Our average client has retirement accounts of about $150,000 and is looking to buy one or two properties.'”
“Jeff Brown…transferred roughly $50,000 from his workplace 401(k) to purchase homes to fix up and sell…He uses a self-directed IRA that he set up through IRA Financial Group in Miami Beach.”