Tools and Investment

Real estate has the reputation for providing it’s investors with an established investment that provides income and appreciation.  Few tax payers realize that they can self-direct their IRS’s and additional retirement plans into real estate,  since most investors just visualize the stock market and CD’s as their only IRA investment options. 

Many custodians only allow for the investor to put into “approved” investment options.  But for the investor that is currently successful with real estate, or even just looking to diversify that retirement portfolio, the combination of IRA and real estate can be very potent. 

There are certain types of dealings that are restricted through an IRA.  Those transactions include items that would create UBTI, Unrelated Business Taxable Income, or those having to do with “self-dealing.”  Those rules prohibit your IRA from investing in a property where you or relations have previous possession, or making an investment that produces earnings from unrelated trade or business.  The only two IRA investments that are proscribed: collectables and life insurance. 

Of course, there is risk involved with any investment.  Though most successful real estate investors can conclude that the investment risk associated with real estate is significantly less that investing exclusively in the stock market. 

Purchasing real estate within the IRA is likened to purchasing other conventional investments within the IRA, with just a few exceptions.  Once the account is established and funded, the customer instructs Heaven Investment Corp to purchase the desired investment property. 

Remember, self-directing an IRA is not radically different than a non self-directed IRA.  The return that you earn will be directly attributed to the choices that the investor makes, not by the choices of said investment professional.  The investor will make those choices in a tax deferred/free environment.