Use IRA to supercharge real estate investment

来源: miat42 于 07-02-22 19:53:43

When the timing is good, if you have a sizable IRA account, you could turn it into an account to buy real estate. Rather than earning 10% mutual fund return, use it as seed money to borrow 10 times more money as leverage can supercharge real estate investment.  The key is to use small down pay to attract big loan from bank.

However, be careful that this strategy only works well when the market is starting a new boom cycle. Probably not now. Right now you want them to have higher return in the stock market.

Charles Schwab or Fidelity may not allow your IRA in their custody to do so because they can not make money from you. Their business model is to earn income from your mutual fund or stock trading commission. If you find your own custodian, then your special IRA can invest in almost anything you wish...

It's complicated, the basic idea is use IRA only as your partner for upfront downpayment, the you as individual carry the loan for the rest, that solve your downpayment problem. Also that tax benefit on the portion that IRA participated in.

Buying land simply make it less vulnerable to be considered "self-dealing". As long as you can avoid the problem of "self-dealing", you can buy a house, and rented out to un-related 3rd party.

Q:  你提到的IRA AS DOWNPAY是DISTRIBUTED?
A: It's a roll over, not a distribution. You can roll over 100% of your old 401K account in your previous employer to a 3rd party custodian handling Real estate oriented self-directed IRA LLC account. You can search in google to find out who handles that business.
After all is done, you can tap into that funds to buy and sell houses...

Most people won't do it, but if you waited till the market bottom, why not use your IRA to supercharge your return?

Read more on:   http://www.iraleverage.com/wst_page3.html