On February 27, 2012, appearing live on CNBC’s Squawk Box, Buffett tells Becky Quick he’d buy up “millions” of single family homes if it were practical to do so. If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. Using a Self-Directed IRA LLC to buy real estate would allow one to purchase real estate in a tax-deferred manner.
Want to buy real estate with your retirement funds and earn tax-free gains. Want to take advantage of the attractive real estate market? Then the Self Directed IRA LLC is your solution. In addition to the tremendous IRA benefits (tax-free gains, tax deductions, asset protection and estate planning), the Self Directed IRA LLC allows you to invest tax-free in investments that you know and understand quickly and without custodian consent. Aside from life insurance, collectibles and certain “prohibited transaction” investments outlined in Internal Revenue Code Section 4975, a Self-Directed IRAs can invest in most commonly made investments, including real estate, private business entities, public stocks, private stocks, and commercial paper.
With a Self Directed Real Estate IRA LLC “Checkbook Control” structure, you will have the power to act quickly on a potential real estate investment opportunity. When you find an investment that you want to make with your IRA funds, as manager of the LLC, 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.
With the Self Directed IRA LLC “Checkbook Control” structure, all real estate income and gains from IRA investments will generally flow back to your IRA LLC tax-free. Because an LLC is treated as a pass-through entity for federal income tax purposes and the IRA, as the member of the LLC, is a tax-exempt party pursuant to Internal Revenue Code Section 408, all income and gains of the LLC will flow-through to the IRA tax-free!
Using a Self-Directed IRA LLC will allow you to purchase single family homes in a tax efficient manner, an investment Warren Buffet believes is a very attractive investment right now.