Self-Directed Real Estate IRA Corner: How Much Should You Have Saved by Now?

Experienced Self-Directed IRA investors know: You need to monitor your investments, and how they perform over time. This is true with any individual security, and it is true with a Self-Directed Real Estate IRA rental property: If you own a house as a Self-Directed Real Estate IRA investment, you would want to know, how is it holding up to the elements? Is the roof in good repair? Is the wiring up to the demands of the modern household? Is the plumbing in good condition? Is it reasonable to expect that the home will generate acceptable income and capital appreciation in the future?

Because if you fail to monitor the status of your investment, you will not know if it’s time to take some corrective action – fix the roof, for example – until it’s too late and the damage is irreparable.

The same is true of an individual’s retirement portfolio as a whole. It’s important to take some vital signs from time to time, to ensure that your total retirement portfolio is in good shape, and that you are making acceptable progress toward your goal: An investment portfolio that is sufficient to continue to generate adequate income and financial security when you leave the work force.

Fidelity Investments – the Boston-based mutual fund behemoth, came up with a useful concept that may make it easier for you to check your progress toward a successful retirement: Their analysts estimate that the minimum amount an individual should have saved by the age of 67 should be about ten times his or her annual income.

This, combined with Social Security, should be enough to see most people through, if they’re careful about expenses.

Well, if you know your target is 10 times your income at age 67, then it’s possible to work backwards from that number, given reasonable savings rates and assumptions about expected future returns over time, to arrive at a target multiple for other ages, too.

Here’s what Fidelity came up with:


If you want to be on track to hit that 10 times income multiple at age 67, then you should be hitting the other guideposts along the way:

Save your income by age 30, and twice your income by age 35. Save triple your income by 40, and so on.

Fidelity’s analysts calculated that this is very doable, for those who contribute at least 15 percent of their incomes to their 401(K)s beginning at age 25 – just a couple of years out of college.

If you got a late start, or if you are falling behind, then you’ll need to take some corrective measures. Specifically, you are probably going to need to take some combination of these actions:

  • Increase the amount you are saving each year.
  • Increase your annual expected returns (but this probably involves taking on more investment risk).
  • Reduce the amount of unnecessary fees and expenses you’re paying within your retirement account.
  • Reduce your lifestyle expectations in retirement.

Nearly everyone falls behind at one point or another. Some fall behind because of bear markets. But these can be great opportunities to increase your retirement savings contributions, because you can buy great assets at big discounts. They are also great opportunities to increase your annual expected returns: Those who moved heavily into Self-Directed Real Estate IRAs and stocks in 2009-2010, for example, made profits that substantially exceeded the long term returns of either the S&P 500 or the residential real estate market – simply because they bought at the bottom.

And as Warren Buffett points out in this great speech to Columbia University students, buying assets everybody else thinks of as “risky” at the bottom isn’t necessarily so risky at all.

That’s where Self-Directed IRA investing can play an important role: You want to buy assets that are on sale – that sell at low prices compared to their intrinsic value or discounted expected future income streams. But those are not always publicly traded securities. Stocks and bonds are both pretty expensive these days, as are most mutual funds that rely on them.

A Self-Directed IRA does not limit you to publicly traded securities. Those are the securities that Wall Street wants to sell, anyway.

Instead, using a Self-Directed IRA (or Self-Directed Solo 401(K), Self-Directed SEP IRAs, Coverdell education savings accounts and health savings accounts for that matter) let you combine the tax advantages you get with IRAs with the freedom to diversify into any asset class you like (except life insurance, jewelry/gems, alcoholic beverages and collectibles).

This also helps you increase expected returns without taking on much more risk with your overall portfolio: Adding alternative asset classes like rental real estate, tax liens and certificates, private lending, farm and ranchland, LLCs, partnerships and other common Self-Directed IRA investments can help cancel out volatility in other areas, smoothing overall portfolio performance without forcing you to ‘pull in your horns’ by buying low-risk, low-reward assets such as money markets and other cash equivalents.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Hot Housing Markets for Self-Directed Real Estate IRA Investors

When most of our Self-Directed Real Estate IRA-owning clients read up on real estate investing in the national financial media, the headlines are dominated by the highly-appreciated and largely unaffordable markets. That is, in hot gateway cities and technology and financial centers like San Francisco, New York, Miami and Los Angeles.

Self-Directed IRA Case Study
Robert (50) and Rachel (47) took advantage of the collapse in house prices to buy several investment properties in and near Burlington, North Carolina in 2010-2011. They had sizeable 401(K)s from former employers that they rolled over into Self-Directed IRAs with American, which represented the bulk of their real estate investing capital. They “flipped” several houses over the next couple of years as prices recovered, and kept others on as rental properties, delivering steady income. They chose to reinvest income not needed into their flipping activities. The result has been an annualized 24 percent rate of return, given current price levels. But thanks to leverage, their return on invested capital has been nearly twice that amount so far, as they commonly use mortgages to finance about 50 percent of their real estate activity.

They do have some unrelated debt-financed income tax liability each year, but it has been more than worth it as they have been able to handily beat stock market returns since then, even while the stock market has been relatively strong.
These cities grab headlines, of course, with their spectacularly high prices. But there are lots of great bargains available in smaller towns that also have strong fundamentals, solid economics, steady and significant growth in house prices, and better affordability for most of us who do not have millions to throw around to buy an investment property.

Analysts at took a close look at some of America’s best housing markets in smaller towns and cities across the country.

We will deal first with North Carolina’s entry in the field: Burlington.

Many middle-income buyers have been priced out of the Durham area because of the tech boom and Research Triangle Park. But buyers have discovered much better affordability just 30 minutes away in Burlington, where the $245,100 median house price is much less of a burden on the family budget compared to Durham’s median list pricing of $356,800.

Burlington, North Carolina is a viable commuting option for those working in Durham and even in Raleigh, the state capital, which is about an hour away.

Migration to Burlington from Durham and activity from LabCorps, a significant Burlington employer and S&P 500 company, helped push home prices up by 20.7 percent just in the past year.

Burlington came in number 7 in the top hotspot category, according to Here are the top three:

1. Odessa, Texas.

Odessa is benefitting from the recent increase in oil prices, simultaneously with a boom in oil shale development in West Texas, which has created a job boom. Prices have increased by over 34 percent over the last year as workers flock to the town, bidding the median list price up to $271,400.

This market is probably best for risk-aware investors who can withstand the ups and downs of the oil market. Oil towns have a long history of boom and bust cycles, and Odessa’s in the midst of a boom.

2. Wichita Falls, Texas

Witchita Falls was hit hard by a drought a few years ago, but the rains came back and so did the town. Strong hiring from the nearby Vitro Architectural Glass plant also contributed to the recent boom, which saw house prices rise by 27.2 percent over the past year. But home prices are still very affordable, with a median house price of $140,000.

3. Homosassa Springs, Florida
This sleeper community is a popular destination for snowbirds and retirees from Canada, New England and New York/Pennsylvania seeking relief from the brutal winters up north. After a long period of economic sluggishness, hiring is picking up in the area, thanks in part to Duke Energy’s $1.5 billion natural gas plant on Crystal River.

This and strong economic activity in nearby Hillsboro County and the Tampa area, an hour to the south, helped push the median house price in Homosassa Springs to $225,100 – a 22.1 percent increase in one year.

Other solid housing markets include:

City Median List Price One-Year Change in Median Listing Price
Terre Haute, Indiana $109,600 21.8%
Battle Creek, Michigan $140,000 20.9%
Bowling Green, Kentucky $260,000 20.9%
Boise City, Idaho $335,100 19.6%
Las Vegas, Nevada $330,000 16.8%
Indianapolis, Indiana $250,100 16.4%

Interested in learning more about Self-Directed IRAs? Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation. Download our free guides or visit us online at

Self-Directed Real Estate IRA Glossary

Basic Self-Directed Real Estate IRA Terms You Need to Know

Beneficiary. The individual named to receive the IRA assets and the IRA itself upon the IRA owner’s death. This has important tax and probate advantages. It is important to keep the beneficiary listed by name on your Self-Directed IRA, and keep it updated as appropriate.

Capitalization rate. Also called “cap rate.” The rate of return of a property based on expected rental income. The formula is net operating income (NOI) divided by the current market value or the acquisition costs, expressed as a percentage.

Catch-up contribution. Additional money you are allowed to contribute to a retirement account once you turn age 50 or older. For Self-Directed IRAs, you can contribute $5,500 (if you meet the income requirements, and another $1,000 each year in catch up contributions once you turn 50.

Disqualified Persons. Persons and entities prohibited by law from transacting directly with your Self-Directed Real Estate IRA. These include your spouse, your children or grandchildren, your spouse’s grandchildren, your parents and grandparents, your spouse’s parents and grandparents, and any entities they control. It also includes anyone advising you in a fiduciary capacity on your Self-Directed Real Estate IRA.

Fair Market Value. The estimated value of assets if they were sold to another informed third party in an arms-length transaction. The fair market value of IRA assets must be reported to the IRS as of December 31st each year.

Inherited IRA. An IRA inherited by someone other than a spouse. Special tax rules apply.

Form 5498. An IRS form you will receive each year from your retirement account custodians or administrators detailing your contributions to your retirement accounts.

Hard money loan. A short-term loan based on the assets within the IRA, typically at higher interest rates.

Non-recourse. Mortgages in Self-Directed Real Estate IRAs must be on a non-recourse basis. The IRA account holder cannot sign a personal guarantee, and in the event of default, the lender must have no security to collect other than the specific property bought with the proceeds of the loan.

Probate. A judicial process used to account for a deceased individual’s assets, pay off his or her creditors and distribute the proceeds to heirs. If you name a beneficiary on your Self-Directed Real Estate IRA or 401(K), however, these assets bypass probate and pass directly to your beneficiary. If you had owned them in your own name, however, or fail to name a beneficiary, these assets are subject to probate.

Prohibited investment. The law restricts Self-Directed IRA owners from investing in certain kinds of assets, including life insurance, collectibles, antiques, art, gems and jewelry, alcoholic beverages and certain forms of precious metal coins and bullion of insufficient or inconsistent purity. Investing in these assets could cause the IRS to strip your Self-Directed IRA of its tax-advantaged status. You may face taxes and penalties if this occurs.

Rollover. A tax-free transfer from one tax-advantaged retirement account to another. Each taxpayer is entitled to one tax-free rollover transaction per year.

Roth IRA. An IRA account that features tax-free growth, tax free withdrawals on assets that have been in the account at least five years but is funded with after-tax contributions.

Contributions are not tax deductible. These accounts can be held in self-directed or conventional IRAs.

Self-Directed IRA. An IRA in which the owner retains direct control of the individual investment decisions within the account, to include the selection of the custodian or broker. Self-Directed IRAs provide more flexibility in choosing alternative asset classes and fee structures. They can be traditional or Roth IRAs.

Self-Directed SIMPLE IRA. Savings Incentive Match Plan for Employees.

Unrelated debt-financed income. A tax that may apply to any realized gains or income within a Self-Directed IRA or conventional IRA, Self-Directed SIMPLE IRA or Self-Directed SEP IRA plan attributable to borrowed money.

At American IRA, we believe that Self-Directed IRAs, including Self-Directed Real Estate IRAs, are the best vehicles for growing your retirement account. And we have the experience to help you with your transactions.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Raleigh and Charlotte Hold Special Allure for Self-Directed Real Estate IRA Investors

The real estate markets in Raleigh and Charlotte, North Carolina remain among the the hottest in the country – and that is great news for local Self-Directed Real Estate IRA investors. In fact, North Carolina – including Raleigh and Charlotte in particular – is one of the best Self-Directed Real Estate IRA markets anywhere.

The North Carolina city took the #2 spot in this year’s “Hottest Housing Markets for 2018” report from Zillow, which looks at house price appreciation trends, rental prices, regional income growth, prospects for employment and low unemployment rates. Self-Directed Real Estate IRA investors have benefitted from a Raleigh economy that is firing on all cylinders, say analysts.

Charlotte, North Carolina, also fared very well, coming in as the fourth hottest market in the country, according to Zillow’s researchers.

All in all, Zillow ranked the country’s hottest markets as follows:

  1. San Jose, California
  2. Raleigh, North Carolina
  3. Seattle, Washington
  4. Charlotte, North Carolina
  5. San Francisco, California
  6. Austin, Texas
  7. Denver, Colorado
  8. Nashville, Tennessee
  9. Portland, Oregon
  10. Dallas, Texas

Continued growth in the technology industries fueled Raleigh’s housing market strength.

Yes, there is lots of technology in and around Silicon Valley, which explains San Francisco, San Jose and Seattle on that list. But Raleigh has something none of those markets can come even close to matching: Lots of room to run.


Because while people are actually fleeing those other cities as the cost of living continues to escalate, Raleigh can lay claim to being one of the most affordable cities in the country for renters. That’s an important metric for Self-Directed Real Estate IRA investors, who depend on being able to find qualified renters who can afford to pay their monthly rents on time and consistently. Evictions are frustrating, costly and damaging to both the tenant and the landlord. And in a mature market, values in San Francisco and San Jose have lots of room to fall.

The Raleigh market is much more affordable and sustainable for Self-Directed Real Estate IRA owners.

Currently, the median monthly rent payment in Raleigh is $1,441, which equates to just 22.9 percent of the median household income, ranking it the fourth most affordable market for renters in the country – again according to data from

And once again, Charlotte, North Carolina fares very well using this metric, as well: Zillow ranks Charlotte as the ninth most affordable market in the United States, with an average rent of $1,301, representing 24.7 percent of the median monthly income.

In contrast, the least affordable major metro markets for renters were:

  • Los Angeles, California, where the $2,759 median rent equals 47.6 percent of the median monthly income;
  • Miami-Fort Lauderdale, Florida, where the $1,867 median rent equals 42 percent of the median monthly income;
  • San Diego, California, where the $2,549 median monthly rent equals 40.8 percent of the median monthly income;
  • San Francisco, California, where the $3,425 median monthly rent equals 39.7 percent of the median monthly income, and;
  • New York, New York, where the $2,401 median monthly rent equals 38.3 percent of the median monthly income.

North Carolina also takes the edge for much lower state income taxes compared to California.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Self-Directed Real Estate IRAs Can Help Close the Retirement Savings Gap

Most Americans know they really should be saving and investing for retirement. But most Americans are also clueless about how much they realistically need to have saved up in order to provide for a secure and acceptably comfortable retirement income. Self-Directed IRAs are just part of the retirement picture that also includes conventional assets, Roth IRAs, pensions, 401(K)s, 403(b)s, Thrift Savings Accounts (for federal employees), annuities and private savings outside of retirement accounts.

The problem is pervasive: A new study from finds that more than 60 percent of Americans surveyed have no understanding of how much they need to save to accomplish their retirement goals. 69 percent of millennials between ages 18 and 67 do not know – which is excusable, considering their youth. But Baby Boomers didn’t fare much better: Fully 58 percent of Boomers are unable to calculate their required requirement savings or budgets. 56 percent of Generation Xers surveyed reported they didn’t know.

Other findings:

  • 8 percent of those responding indicated they never plan to retire – though disability and economic dislocation have a way of taking those decisions out of individuals’ hands.
  • 8 percent estimated they needed over $1 million to retire, and 15 percent estimated they would need to amass between $250,000 and $1 million.
  • 8 percent reported they believed they would need $250,000 or less to retire.
  • 61 percent reported they did not know. Which makes it impossible for them to make rational decisions about how much they need to save each week, month and year as their retirement dates march inexorably closer.

Self-Directed Real Estate IRAs can help

One way to close the gap: More Americans should consider Self-Directed IRAs – particularly Self-Directed Real Estate IRAs. The Self-Directed Real Estate IRA technique provides a number of powerful benefits that are not easily replicated using other types of asset classes:

  • Tax-deferred growth of Self-Directed IRAs, Self-Directed Solo 401(K)s, Self-Directed SEP IRAs and Self-Directed SIMPLE IRAs
  • Tax-free growth of Self-Directed Roth IRAs and Roth 401(K)s
  • Protection from creditors in the event of bankruptcy
  • Consistent rental income that can be reinvested or used to support you and your family in retirement
  • Potential for increasing income over time as you are able to increase rents
  • Potential for capital appreciation
  • Easily obtainable leverage – lenders are generally more willing to lend on real estate than most other kinds of assets, and on better terms.

Few other types of investments provide this combination of benefits to the individual investor.

Fortunately, the Self-Directed IRA structure is flexible enough for investors to build quite significant real estate portfolios over time by leveraging the tax benefits of IRAs and other retirement accounts.

Real estate prices can be volatile, of course. But rental real estate tends to pay investors handsomely via rental incomes while they wait for prices to recover. You do not need to sell at a loss: You can continue to collect regular rental income from your Self-Directed Real Estate IRA investment property for years.

Self-Directed Real Estate IRA owners should be aware of unrelated debt-financed income tax: If you borrow money to purchase an investment property, part of your income and part of your capital gains on sale of a Self-Directed Real Estate IRA property will not be entirely tax-free. Any earnings and realized capital gains attributable to borrowed money, rather than your own savings and contributions, will generally be taxable as income, under UDIT rules. However, as you pay down the mortgage on the property, less and less of your income and capital gains will be taxable.

(Tip: Consider paying off any loans on Self-Directed Real Estate IRA properties, if possible, before selling them, to avoid having to pay UDIT on capital gains attributable to other peoples’ money.)

Another idea: Self-Directed Solo 401(K) accounts also support self-directed real estate investing. If you are self-employed or own your own business, you can establish your own 401(K) or Roth 401(K) and use it to purchase investment real estate directly.

However, Self-Directed IRAs and Self-Directed Solo 401(K)s are no panacea: In order to have the greatest chance of success, investors should have a clear idea of what their retirement income needs are, and what kind of savings it will take to amass an investment portfolio capable of generating the income required over many years of retirement.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Self-Directed Real Estate IRA Basics: Investing in Raw Land and Timber

Most Self-Directed Real Estate IRA investing is done using basic residential properties as the investment vehicle: Single family 2- and 3-bedroom homes, condominiums, small apartment buildings, duplexes and quads. But there is nothing limiting you to these straight-ahead investments. Self-Directed Real Estate IRAs come in all kinds of varieties. If you find a compelling value in farmland, ranch properties, timber and other kinds of real estate investing, you can absolutely pursue it while still combining the advantages of real estate investing with the power of a Self-Directed IRA.

Advantages of Self-Directed Real Estate IRAs

Land is a unique investment with a number of key advantages:

  • Even in down markets, Self-Directed Real Estate IRA investments almost never go to zero.
  • Usually generates regular income.
  • Land produces food, timber, coal and oil – all of which have economic utility that is likely to last as long as civilization lasts.
  • You can build rental real estate on a piece of farm or timberland or rent space to advertisers and cell phone tower developers to further boost income. Other potential sources of revenue streams include renting barn and other storage space, natural gas rights, solar panel space rental, wind power generation, grain storage/siloing, summer and October hay rides for the community and special events.
  • Rental income and crop/livestock yields from a Self-Directed Roth IRA are tax-free.
  • Land/real estate is a historic hedge against stock market volatility.
  • Potentially increasing rents and yields amount to significant inflation protection.
  • With good tenants, farmland and timber land requires less maintenance and intervention from the landlord than residential and even commercial real estate. You do not have to worry about leaky roofs and faucets and 3 AM calls because of a stopped toilet.
  • Farmers generally pay rent twice per year – once in the spring and once in the fall. Which means fewer collection headaches for you.
  • Property management expenses are lower. This means your Self-Directed IRA can keep more of the rental income that might otherwise go to a property manager.
  • Farmland and timber land is a proven source of passive income – especially when any mortgages are paid off.

Successful land investors are aware of the risks: To do well in Self-Directed Real Estate IRA investing in farm, ranch and timberland, you should have a solid understanding of the industry and the communities in which you are investing.

Be careful to do a thorough title search to ensure you are not buying a property still encumbered with liens.

You should also be in a position to tie up money in the land for a long time. Transaction costs on land can be high, and land is notoriously illiquid. However, this illiquidity is part of the reason it is so potentially profitable – you will not normally need to pay a liquidity premium in the form of lower ROI for the privilege of quick access to your money. This is why Self-Directed Real Estate IRAs and other similar tax advantaged retirement accounts are ideal vehicles for this kind of investing: Time horizons for many Self-Directed Real Estate IRA investors is measured in decades, not months.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Self-Directed Real Estate IRA Update: North Carolina Multi-Family Market Remains Strong

It has been a nice run for Self-Directed Real Estate IRA owners focused on the multi-family residential market, but we are starting to see some signs of a slowdown in investment activity.

New data from CBRE and Real Capital Analyst indicate that total multi-family investment activity slipped by 6.9 percent year-over-year, as of the close of Q2 2018. Capitalization rates, defined as the annual net operating income of the property divided by the property value, edged down to 5.5 percent, largely due to a declining investor interest in so-called ‘garden-style’ apartment buildings.

However, the high-rise market continues to attract strong investment activity, with 12.4 billion in sales marking an increase of 12.2 percent on a year-over-year basis.

A disproportionate share of investment dollars is flowing to the already highly-appreciated markets in Los Angeles and New York, with the hot Dallas market coming in third, well behind the other two metros. But that may well leave opportunities in the underserved Southeast, including here in North Carolina, where economic growth, employment prospects and housing demand remain strong, and where rental yields are still attractive to Self-Directed Real Estate IRA investors interested in multi-family housing.

Data from the Apartment Loan Store, a lender that specializes in the multi-family market, indicates that cap rates in and around Charlotte, North Carolina, are in line with national averages, though they vary by type of property:

New Luxury Metro                 4.62%

Class A                                                     5.14%

Class B                                                     5.67%

Class C                                                     6.45%

Value-added Acquisitions     6.34%

The average multi-family rent in Charlotte has increased 2 percent over the past year, also according to the Department Loan Store, though the trend has been towards flattening, overall.

Baby boomers who have recently sold their homes have been migrating to the rental market, offsetting Millennials who are increasingly joining the ranks of homeowners.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Buying Florida Properties in your Self-Directed Real Estate IRA

A recent article in the Sarasota Post features the basics of investing in Florida properties using your Self-Directed Real Estate IRA. Of course, the principles are the same everywhere: The laws governing IRAs, including Self-Directed Real Estate IRAs and the broader category of Self-Directed IRAs, are federal. They are the same in every state. But there are a few considerations that make Florida unique.

Booms and Busts

Florida has been attracting real estate speculators for decades – and is famous for big Florida land booms followed by devastating busts. Many have gotten wealthy from Florida real estate investing, and if you time things well and get in while one of the great Florida land booms has some room to run, you can do extremely well indeed.

On the other hand, many have bought into Florida property at the top of the market and been devastated by one of the big real estate crashes that seem to happen in Florida from time to time.

Those who have been investing in real estate for a while will easily recall that Miami, Fort Lauderdale and Palm Beach real estate investors were all seriously hurt by the 2008 market crash. But they have also done very well in the recovery.

Be Patient

So, Florida is a market that is best for Self-Directed Real Estate IRA investors who plan to buy and hold, or who have a number of years before they expect to need to cash out. Meanwhile, the great thing about real estate is that thanks to the generous and increasing rental income yields available on real estate, Self-Directed Real Estate IRA owners can get paid very handsomely to wait.

No State Income Taxes

Florida is an ideal home for Self-Directed Real Estate IRA investors because it is one of a handful of states that do not have a state income tax. This means that rental income from your Self-Directed Real Estate IRA is only taxed at the Federal level, and if you own the property in a Roth IRA, it is not taxed at the federal level, either.

The lack of state income tax goes a long way to helping make a Self-Directed Real Estate IRA a compelling value proposition, and it makes Florida a great destination for retirees who expect to rely on taxable income from an IRA, 401(K), or real estate portfolio.

Self-Directed Real Estate IRA financing

Because Florida real estate prices so historically volatile, lenders may be more careful about lending to Florida Self-Directed Real Estate IRA investors. For example, in most markets nationwide, it is pretty easy to find financing from a Self-Directed Real Estate IRA lending company for about 65 percent of the value of the property securing the loan. However, some of these Self-Directed Real Estate IRA lenders will not lend on Florida properties. The ones that do may require a 50 percent down payment rather than the 35 percent standard elsewhere in the country.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Due Diligence Checklist for Self-Directed Real Estate IRA Properties

Real estate deserves consideration in anyone’s long-term investment portfolio. Some investors are content to expose themselves to real estate via REITs and straight-ahead stock companies within a larger retirement portfolio. Many of our own clients find they can get better returns on investment via direct ownership of investment properties within their own retirement accounts, using a Self-Directed IRA, Self-Directed Real Estate IRA, Self-Directed Solo 401(K), Self-Directed SEP IRA or Self-Directed SIMPLE IRA account. They simply use the cash in these accounts to purchase investment property and hold it, with their IRA collecting rents and paying expenses.

After working closely with hundreds of successful Self-Directed IRA landlords – men and women who own real estate directly within their retirement accounts – we have come up with some important hints and tips for finding profitable investment properties with a relatively low degree of risk.

  • Compile your own comps. Do not trust the big internet sites like Trulia and Zillow for estimates on what any specific home may be worth. First, everyone else has access to that data, so you will not be at any significant advantage by relying on it. Second, there is no substitute for strong local knowledge of the neighborhood – something that no large nationwide database can provide. Compile your own comps, or work with an agent who has extensive experience with homes in this particular area. Better yet, consult a professional appraiser.
  • Hire a building inspector. Most real estate investors – even experienced ones – inspect just a few homes a year at most. A professional building inspector visits hundreds of homes each year. Few ordinary investors can match that kind of experience, which can normally be had for just a few hundred dollars. That experience can also save you from incurring thousands and even tens of thousands of dollars in needed repairs and renovations, which could destroy the profitability of your Self-Directed Real Estate IRA property.
  • Work with a title company. This is the most reliable way to ensure that your new Self-Directed Real Estate IRA investment property has a clean title, free of encumbrances from unpaid property taxes, contractors’ liens, old mortgages, claims from heirs and estate beneficiaries, lawsuits and judgments or pledges as collateral.
  • Be skeptical of pro forma Occasionally, sellers will show you pro forma accounting documents that show various earnings and profitability projections. These are nice but consider them an absolute ‘best case’ presentation. In 99 percent of actual cases, the Self-Directed Real Estate IRA property will show income and expenses substantially lower than what the pro forma numbers assumed.
  • Look over key property management documents. You will want to look at the previous owner’s rent rolls and compare them to bank statements. Do rental collections match the actual bank statements? Are rents claimed on the rent roll but do not show up on actual bank statements? Does the discrepancy match the non-payment rate?
  • Account for renters’ deposits. State laws vary, but the general rule is landlords must keep renters’ security deposits in segregated accounts. Before you purchase a rental property, ensure your account for each tenants’ deposit in full and that you have access to these accounts, so you can release them to the renter as required by law, or use them to offset expenses that the deposits are intended to cover.

 Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Charlotte Self-Directed Real Estate IRA Investors Tapping a Booming Market

Real estate has been hot in recent years – and Charlotte, North Carolina, where American IRA, LLC maintains one of our two offices – is no exception. Recent sales figures are in, and Carolina Multiple Listing Service data for May of 2018 is showing an average sales price of a home in the general Charlotte region was $299,690. That is a jump of 11 percent over May of 2017.  This has been great for Self-Directed Real Estate IRA Investors.

Want a Self-Directed Real Estate IRA property within the city limits? Be prepared to pay even more: The average price of a Charlotte home was $332,700 in May, up a solid 13 percent over the preceding twelve months. The median sales price was up 9.5 percent over the same period.

Why the gap between the median and mean sales prices? Part of it is due to the rapid growth of incomes and wealth levels of Charlotte’s most affluent suburb: Davidson. This town of 12,700 residents has recently been named the wealthiest town in North Carolina, according to the most recent Census Bureau numbers.  The median annual income in Davidson, $109,907, is more than double the North Carolina median income of $48,256. And more than a quarter of households in Davidson earn $200,000 or more, compared to just 3.9 percent in the rest of the state.

Meanwhile, the number of homes available for sale in and around Charlotte is starting to fall. Inventory is down 20 percent between May 2017 and May of 2018, according to MLS data and reporting by the Charlotte Observer. The biggest demand for real estate in the Charlotte area seems to be towards the lower end of the price range, say local real estate observers. Self-Directed Real Estate IRA investors need to act fast.

The combination of increasing prices and tightening inventory appears to have taken some of the steam out of the Charlotte regional real estate market.  Despite the low inventory, it is still a great time for Self-Directed Real Estate IRA investors.  The number of homes sold has increased over the past year nationwide, but the number of units sold in Charlotte last May has fallen by 20 percent compared to a year ago.  However, lower inventories may well help support prices going forward, as buyers must compete for fewer and fewer units actually up for sale.

The lower total inventory does not mean buyers are not snapping up homes quickly. Indeed, Self-Directed Real Estate IRA investors may find this a good time to sell: The average time from list to close has fallen from 97 to 87 days in the past year.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at