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Partnering to Purchase Investment Real Estate with Your Self-Directed IRA

Partnering to Purchase Investment Real Estate With Your Self-Directed IRA

With the fluctuations in the public markets, a lot of investors are looking for alternatives to place their money in, including their retirement funds. One of the most popular alternative investments people are turning to is real estate. A lot of people who are not familiar with the concept are intrigued when they find out they can actually use their retirement funds for real estate investing. Additionally, partnering IRA funds to invest offers flexibility and expands the choices one has when considering assets.

There are a few ways an investor can use retirement funds to invest in real estate, but one of the most common ways is partnering IRA funds with your personal funds or with someone else. There are a lot of different ways investors can structure the transaction, but to put it simply, an investor can partner with anyone (even disqualified parties) in order to purchase a property. The most common example of this is a tenants-in-common purchase. The IRA will own a specified percentage of the property, and the other partner will own a specified percentage of the property. Once the property is closed on, all income and expenses related to that property are split pro-rata according to the percentage of ownership between the IRA and the other partner.

There are no limits to the number of partners you can have, and there is no limitation on what the percentages of ownership can be. The investors are in complete control. This is common for a lot of IRA owners as they may not have enough in their retirement accounts to purchase the property alone. Partnering IRA funds allows them to invest in real estate, diversify their portfolio, and protect their profits.

Midland Trust specializes in real estate investments in self-directed IRAs. We do not sell investments or give advice, but we facilitate the administrative details of your account to comply within the rules for these accounts.

For more information, contact Midland today.