The average person has $100K in their self-directed IRA. But most people don’t know that they can use those funds to invest in alternative assets such as real estate. It’s a fairly easy process and we are here to help you along the way. The first step would be to establish an account at Midland IRA by selecting from a Traditional, Roth, Simple, SEP, Individual 401(k), Health Savings or Coverdell Education account.
Next, you would fund your new account by making either an IRA contribution, an IRA transfer from one IRA to another IRA, or by rolling funds from a 401(k) retirement account into your new IRA. Once the account has been funded, you can start looking for an investment property that meets your investing needs. You’ll also need to agree on the terms with the seller.
Once the contract has been prepared, you will want to initial each and every page and submit it to Midland IRA for signature along with our real estate purchase authorization form so that we can get the deposit out. We will then get in contact with the title company that is preparing the closing documents to let them know exactly what we need in order to close. Once we receive the closing documents, we will forward them to you for your review and initials. We’ll then sign the closing documents on behalf of your IRA and issue funds for closing.
After the closing, your IRA will be the owner of the property. You will want to be sure to monitor your account and direct Midland IRA to deposit income into your IRA, and to pay any expenses associated with the property out of your IRA. All expenses must be paid out of your IRA; this includes property taxes. Midland IRA will provide recordkeeping and tax reporting for your IRA. It really is as easy as 1-2-3 but if you have any trouble along the way, we are here to help and answer any questions you may have!
This article was written by Audra Montgomery, Senior Associate at Midland IRA headquartered in Fort Myers, FL. To contact Audra you may email her at Audra@midlandira.com.