For realtors, there is no doubt about it: the more people are interested in real estate, the better business will be. Yet many realtors do not know that real estate is one of the most popular retirement investments outside of the stock market—especially with those who run their own Self-Directed IRAs. An investor that uses their Self-Directed IRA to purchase real estate still has access to non-recourse loans. And though there are some limits on what an investor can do with real estate using a retirement account, it will only help realtors to know what is possible.
Why It Is Important Realtors Understand Self-Directed IRAs
The concept is simple: there is no reason to ignore one corner of the market where real estate is involved. By using Self-Directed IRAs for real estate investments, retirement investors can put aside wealth in the form of real estate with the tax advantages of any other retirement investment account. That provides additional incentive for any real estate investor looking to build long-term wealth to utilize one of these retirement plans for their own real estate investing purposes.
Self-Directed IRAs also allow individual investors to partner up and make real estate investments that way, there are plenty of options available to those who choose to self-direct. Realtors who know clients who self-direct may be able to bring more opportunities their way, especially when it comes to “investment” real estate that otherwise has difficulty finding enough potential buyers.
Alternative Funding Strategies with Self-Directed IRAs
Realtors who recognize an opportunity when they see it can offer alternative funding ideas to their clients. For example, because a Self-Directed IRA is expected to act as a separate entity from the individual, it is possible for an individual to partner up with themselves to muster the funds necessary—provided that the real estate investment itself still adheres to the rules of Self-Directed IRAs. For example, investors cannot live in the real estate in which they are investing with a Self-Directed IRA, whereas personal real estate purchases can also double as residences. Still, this funding advantage can offer a realtor a tremendous amount of flexibility in fully exploring the market for a given piece of real estate investment property.
Limitations of Self-Directed IRAs and Real Estate
Although it is important to be mindful of these tremendous advantages for investors—even as a realtor—it also pays to know the potential limitations. For example, you would not want to bring the idea of buying a personal home to anyone investing in real estate with a Self-Directed IRA—unless the idea was to go through the usual means, and not through the investment vehicle itself. Self-Directed IRAs can only be used on real estate if those investments are kept separate, as the accounts themselves are considered separate entities.
The good news? It is advantageous for any realtor to know that there are plenty of options—including non-recourse loans—for those who invest with a Self-Directed Real Estate IRA. Knowing these options can grant realtors access to a larger market than they ever thought possible.
Interested in learning more about Self-Directed IRAs? Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation. Or visit us online at www.AmericanIRA.com.