For those of you who don’t already have a self directed IRA, this next bit of info will be Earth shattering for you.
In the weird world of tax law, the IRS has a special loophole for those of us who invest using IRA accounts. We know this is a Self-Directed IRA or SDIRA.
With a Self-Directed IRA, you can invest in a whole range of investments that are not available to traditional institutional IRA accounts.
Where this gets sexy for real estate entrepreneurs like myself, is that you can buy, sell, flip, and rent real estate inside of your IRA account. IF you have that account set up as a ROTH IRA, then the profits are TAX-FREE.
Let’s look at an oversimplified example: if I buy a house for $5,000 and wholesale it for $20,000 then the 15k profit goes into my Roth Self-Directed IRA tax-free. How sexy is that?
You can also make private loans to other investors and make passive income from your Self-Directed IRA. That is super sexy because you can make money without doing anything!
This is what all of my Private Money Partners do to grow their IRA accounts like a rocket TAX-FREE.
There is a catch. The IRS says you need to have your IRA account held in a custodial trustee account. There are a handful of companies that can do this for you. A few of them that we have relationships with are listed here in the “LINKS” section. So check them out and choose the one that you like.
********************************* If you are reading my blog for the first time, let me inform you that… My company buys single-family houses and I write this blog bi-weekly which is primarily directed to educate 1 group of individuals:
Individuals who are losing their shirt as a result of the “roller coaster” volatility of the stock market and low paying rate of other traditional investments, i.e. people that are looking for an opportunity that’ll provide a secured place to put their money to get it working for them to earn better than average returns.
However, often times, homeowners that need to sell their house, stop by to take a peek because they are curious and wondering how and/or where we get the funding to purchase houses. And if they stick around long enough, they begin to understand why individuals partner with us to provide the funding which empowers us to be able to purchase real estate on a continual basis. Simple, it’s because we teach them a secured way to earn better rates of return than they are currently earning.
Request your FREE Education Kit if you are interested in learning how passively investing in real estate may help place you in a better financial position.
Disclaimer: This site is intended for educational purposes only. I am not an accountant, attorney or licensed financial planner. While the information I’m writing here is based on many years of experience buying houses that doesn’t really constitute professional advice (since everyone’s experiences and situations are different).