Do you live in or around the Phoenix area? Are you looking to invest in real estate? Did you know you can use your retirement funds to invest in almost anything, including real estate, tax free? If you currently have a retirement plan at a traditional financial institution, you may not know this. That’s because they want to push the investments they’re familiar with, such as stocks, bonds and mutual funds. With an IRA Financial Group Solo 401(k) Plan, you can invest in almost anything without the consent of your custodian. Further, with checkbook control, you can make an investment by simply writing a check. Now is the time to invest in the Phoenix area. In a recent client survey, Phoenix ranked in the Top Ten for real estate investments. Continue reading to see how to use your retirement funds to invest.
Investments in real estate with a Solo 401(k) 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.
Advantages of Using a Solo 401(k) to Purchase Real Estate
Income or gains generated by a 401(k) Plan generate tax-deferred/tax-free profits. Using a Solo 401(k) Plan to purchase real estate allows the 401(k) to earn tax-free income/gains and pay taxes at a future date, rather than in the year the investment produces income.
With a Solo 401(k), you can invest tax-free and not have to pay taxes right away – or in most cases for many years allowing your retirement funds to grow tax-free! All the income or gains from your real estate deals flow though to your 401(k) account tax-free!
Types of Real Estate Investments
Below is a partial list of domestic or foreign real estate-related investments that you can make with a Solo 401(k):
- Raw land
- Residential homes
- Commercial property
- Mobile homes
- Real estate notes
- Real estate purchase options
- Tax liens certificates
- Tax deeds
Investing in Real Estate with a Solo 401(k) is Quick & Easy!
Purchasing real estate with a Solo 401(k) Plan is essentially the same as purchasing real estate personally.
- Set-up a Solo 401(k) Plan with the IRA Financial Group.
- Identify the investment property.
- Purchase the investment property with the Solo 401(k) Plan – no need to seek the consent of the custodian with a Solo 401(k) Plan since you serve as Trustee and Plan Administrator.
- Title to the investment property and all transaction documents should be in the name of the Solo 401(k) Plan. Documents pertaining to the property investment must be signed by you as Trustee.
- All expenses paid from the investment property go through the Solo 401(k) Plan. Likewise, all rental income checks must be deposited directly in to the Solo 401(k) Plan bank account. No 401(k) related investment checks should be deposited into your personal accounts.
- All income or gains from the investment flow through to your 401(k) tax-free!