Take control of your retirement assets and your future
Are you “aware” of this extremely valuable investment tool, the Self Directed IRA? Statistics show that there are approximately $4.2 trillion in IRAs in this country and less than 4% are self-directed IRAs. Many people are simply not aware that a self-directed IRA can allow them to tap into incredible wealth-building potential for their retirement portfolio and future.
If you’re like most people, chances are your retirement money is locked up in traditional and often unprofitable investments like stocks, bonds, and mutual funds. You may agree that the volatility of the stock market and the resulting losses in recent years are reason enough to consider other alternatives.
Until now, you may not have realized that you can legally invest your IRA in “alternative” investments such as real estate (domestic and foreign), private investments, tax liens, precious metals, and limited partnerships, to name a few, increasing those withdraw dollars exponentially.
Individual retirement accounts were introduced in 1974 with the enactment of the Employee Retirement Income Security Act (ERISA). The rules that govern what an IRA can invest in have been in place and have not changed since IRAs were created. The rules only specify where someone cannot invest and there is an unlimited variety of investments that fall within the limits allowed. There are only three investments that are not specifically allowed within IRAs: collectibles, life insurance, and equity shares in an S corporation.
So, you may be wondering, what exactly is a “self-directed” IRA and how do I open one?
A self-directed IRA account and diversification
A self-directed IRA puts you, the investor, in the driver’s seat, allowing you to freely choose investments from a wide variety of asset classes. This is in stark contrast to having a financial institution (bank, brokerage firm) make the decision for you and your future, as they are likely to have a vested interest in profiting from the limited investments (traditional stocks, bonds, and mutual funds) you have. offer. for you.
A “truly” self-directed IRA is when YOU (with the advice of your chosen professionals) choose the assets of your IRA, allowing you to invest in both “traditional” investments such as stocks, bonds, and mutual funds, as well as non-refundable investments. mentioned above. -traditional investments. Therefore, it need not be an “either/or” proposition.
The fact is, if you so choose, you can still hold positions in the stock market with a self-directed IRA, and yet expand to include these non-traditional or alternative investments, diversifying your investment portfolio. It is well known that “diversification” is fundamental to any investment strategy!
It’s actually quite easy to open a self-directed IRA, as it’s a simple matter of choosing a reputable custodian, such as Pensco Trust Company or Equity Trust Company, and completing an online application. Fees are nominal and clearly posted on company websites. These custodians also offer great free educational tools and webinars to further educate you and help get you started on the path to self-directed IRA investing.
After careful research into the various types of investments you can now take advantage of, the next and most exciting step is making a decision about how to proceed with expanding your retirement account. However, we recommend that you discuss your investment approach with the professionals of your choice (CPA, CFP, PA) for guidance, as you would with any type of investment.
Investing in real estate with a self-directed IRA
Since our ancestors, real estate investing has been the main investment methodology that people have used to successfully accumulate wealth. Long before the extreme example of the American real estate “bubble” of recent years, “hard” real estate investments have provided investors with financial security and wealth for centuries. Yes, real estate investments are truly tangible, where an investor can have a direct effect on the appraisal value, unlike stocks and bonds.
According to the National Association of Realtors (NAR), recent statistics show that the housing market has recovered in the last three months. The report says that existing home sales increased for the third month in a row with a decline in inventory and a less pronounced decline in home prices in June 2009.
NAR chief economist Lawrence Yun is hopeful of the profit. He said “the increase in existing home sales occurred in all major regions of the country. We expect a gradual upward trend in sales to continue due to tax credit incentives and historically high affordability conditions.”
Real estate investments in a self-directed IRA are tax-deferred and tax-free, depending on the specific investment vehicle. It is truly surprising that more people are not taking advantage of these tax breaks, as statistics show that less than 2% of retirement accounts currently have real estate as an investment.
It’s important to know that you can buy real estate in your IRA as long as it doesn’t result in a “proper trade,” meaning you can’t buy property in which you’ll reside or do business. There are also specific IRS prohibitions on buying or selling assets in your IRA where certain family members may have percentage ownership. As you learn more about following IRS regulations, we again suggest guidance from select professionals, CPAs, or attorneys versed in ERISA to help you become a successful self-directed IRA investor.
The benefits of investing in real estate in the state of Louisiana
Louisiana and its beautiful and historic city of New Orleans are also actively involved in the recovery and rebuilding process after the catastrophic devastation of Hurricane Katrina in 2005. The real estate market in Louisiana is largely driven by the need to literally rebuild its cities ( parishes) and due to increased demand for housing due to the influx of workers, workforce housing is a growing need and construction projects are proliferating rapidly.
The time is “optimal” for real estate investors to participate in Louisiana’s unusually lucrative post-Katrina economic environment. As spicy as New Orleans jambalaya, investing in real estate gets “raised” a couple of notches in The Big Easy.
The good news for investors in Louisiana and New Orleans is not only due to extreme market demand, but there is also the added bonus that investments are bolstered by federal tax credits enacted by what is known as the Law. of the 2005 Gulf Area, which provides investors with significant tax breaks. Larry Haines, CEO of Road Home Builders and Sunconomy Homes, said, “Residential housing in Louisiana is strong, especially in areas that support oilfield services and offshore drilling. These investment properties are generating solar tax credits.” state and federal, depreciation and positive cash flow that investors are not getting into most of the US right now.”
Road Home Builders, a “green” contracting company, based in New Orleans, is currently involved in the development of several projects, building affordable and energy-efficient solar homes. These projects target first-time homebuyers and the need for workforce housing along Louisiana’s Gulf Coast, offering significant investment opportunities for self-directed IRAs and discretionary income investors.
Here are the six easy steps to start investing with a self-directed IRA:
1) Select an Accredited Self-Directed IRA Custodian/Administrator
2) Choose a plan type: traditional, ROTH, SEP, SOLO K and open your account online by completing the application (print, sign and mail)
3) Research investment asset classes and decide on investment(s) for diversification
4) Discuss investment strategies and review IRS regulations and tax laws with chosen professionals
5) Submit specific investments to the custodian for approval (they make sure the investment is sound and legal, however they do NOT make the decision if it is a good or bad investment, that is up to you)
6) Enjoy watching your retirement account grow, having the peace of mind knowing that you are now responsible for investment decisions about YOUR retirement money and YOUR future
the golden opportunity
Investing in real estate using a self-directed IRA is a prime investment vehicle right now for both short and long-term investments. With home prices and interest rates at an all-time low, it’s time to “make hay while the sun shines.”
As investors, we may never see another golden investment opportunity like this in our lifetimes. NOW is the time to start investing in real estate, using the ultimate tool for your retirement portfolio, the Self-Directed IRA. Discover the freedom to take control of your financial future!
