Your IRA and Real Estate Investments

One of the “secrets” I share with all of my students is that you can use your self-directed IRA funds to make real estate investments. You are learning how to make great profits by investing in tax lien certificates and tax deeds and using your IRA funds to finance this venture is an excellent way to make the most money now and pave the way for a very comfortable retirement in the future. The beauty of this plan is that the profits you make now are not taxable.

You can use a self-directed IRA to purchase tax lien certificates or tax deeds. You are allowed to buy and sell real estate with the funds, or become a landlord by renting out the property. If your IRA fund is set up correctly, you can borrow against the account and use this to finance your investments. A self-directed IRA means you are in control of your money!

There are a few IRS rules you need to be aware of, though. You are not allowed arms-length transactions, so you couldn’t buy a tax deed attached to property that was owned by a family member. Also, if you personally use the property before you retire, this could make the real estate you purchase through your IRA taxable now.

I always recommend that you hire a good accountant as well as an attorney to help you make the right decisions for your investment profits. Using your IRA is an excellent way to fund your investing, but do check with a professional to ensure you stay within the IRS guidelines for doing so. As we all know, the IRS changes the rules every year so it’s always best to know exactly where you stand before you make a potentially costly mistake.