Self-Directed IRA for Real Estate: The Best Cities for Foreclosure Discounts

Rent isn’t cheap. This isn’t something only millennials have noticed, either—more and more, real estate investors are starting to see how owning can be much better than renting. And when you utilize a Self-Directed IRA in order to procure a bargain investment property for your retirement nest egg—well, that’s a very attractive prospect indeed.

It’s no wonder, then, that so many retirement investors are turning to real estate for their portfolio. And specifically, they’re turning to foreclosures to find the property discounts that mean low upfront costs and high potential returns. But if you’re interested in using your Self-Directed IRA in order to secure rental income throughout retirement, it will help to know where to find these foreclosure-discounted properties…and what makes these cities such intriguing places to invest in. Let’s look at some of the best cities for finding foreclosure discounts for your Self-Directed IRA:

Self-Directed IRA Real Estate Discounts: What to Look For

There are a few different elements to consider when looking for foreclosure discounts—and a steep discount might be important, but it’s not the only way to look. If you’re considering using a Self-Directed IRA for retirement real estate investment in your area, here’s what you should keep your eyes peeled for:

  • A good foreclosure-to-average home ratio. It’s not just that you want to find cheap foreclosed homes. It’s that you want to find a good discount. This discount suggests that foreclosed homes can sell at far below the local property values.
  • Plenty of renter demand. In retirement property investing, it’s not enough to find a good value—you also have to turn it into regular income.
  • Available housing stock. There’s no sense in checking out a community’s foreclosed home options if there aren’t enough houses to justify the visit.

Now that you know these variables, keep them in mind as we talk about some of the most intriguing metropolitan areas in the U.S. for finding foreclosure discounts:

List of Top Foreclosure Discount Cities in the U.S.:

Boasting a photo gallery of the best foreclosure discounts around, National Real Estate Investor pointed out some interesting markets, including:

  • Milwaukee, Wisconsin: Brew City’s median foreclosed homes are some $72,900, a strong discount of 59 percent. That means there are plenty of highly discounted options in the metropolitan area (including Waukesha and West Allis) with over 650,000 total houses.
  • Detroit, Michigan: Although the problems in Detroit are well-advertised, so are the foreclosed real estate opportunities. National Real Estate Investor says Detroit is experiencing a “renaissance lately,” which suggests that there may be some true bargains to be had here.
  • Memphis, Tennessee: Although the metropolitan area isn’t as large as some others on the list, Memphis’ 58 percent discount means that bank-owned homes here are cheap and readily available.
  • Philadelphia/Wilmington: Add these two cities together into the same metropolitan area and you find a market with plenty of homes and plenty of renters—while the area still maintains a discount of some 54%, strong enough to make this a consideration for real estate investors.
  • Pittsburgh, Pennsylvania: Landing at the top spot for the National Real Estate Investor, Pittsburgh boasts a strong discount (63%) and over a million total housing units. This makes it not only a bargain, but a metropolitan area rife with bargains to be sought out.

In addition, we believe there are some other metropolitan areas worth mentioning:

  • Chicago, Illinois: Though you won’t find the steep discount rate of a Pittsburgh here, you’ll still find a major metropolitan area full of opportunities to seek out bargains. That may be because Chicago is one of the largest population centers in the country, but there are still strong discounts to be found.
  • Charlotte, North Carolina: The home state of American IRA offers a steady discount on foreclosed properties and plenty of opportunities for real estate investors to find an investment that matches their
  • San Francisco, California: Another major market—this one gets overlooked because of high real estate prices. But if you have the money, there are plenty of foreclosure discounts to be had, with U.S. News calling it one of the best places to invest in foreclosure real estate as recently as 2012.

When investing, it is a good idea that you try and find metropolitan areas that match the characteristics you’ve read here. Although not every state will be host to one of the “best places to buy foreclosure property in 2016,” that doesn’t mean that there are zero opportunities. As someone interested in a Self-Directed IRA, it’s fair to say that you’re the kind of person who enjoys making their own opportunities anyway. For more information on using a Self-Directed IRA to build a steady retirement portfolio, be sure to browse for more articles or call us at 866-7500-IRA.

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