Top 10 Real Estate IRA Questions Answered

Top 10 Real Estate IRA Questions Answered

Midland receives the same questions about investing in real estate with retirement funds. In this article, we answer our most-asked real estate IRA questions.

The goal of self-direction is to invest in what you know best. If you have experience with rentals or rehabbing, for example, you may benefit from investing in these assets using retirement funds.

Realtors who understand investing with retirement funds can better assist existing clients. They can cultivate a new client base by explaining how to use IRA funds to invest. Realtors can also put their knowledge to work by using real estate IRAs to achieve their own retirement planning goals.

Knowing the process and rules of a real estate IRA is critical.

Answers to the Top 10 Real Estate IRA Questions

  1. Yes. You can invest in real estate using your retirement plan. These plans are called real estate IRAs.
  2. Yes. That means you can use that cash you have been saving for years in your retirement funds to buy real estate.
  3. Yes. We know your broker/CPA/attorney has not said anything about this to you. They have probably never heard of a self-directed retirement plan. That is because mainstream retirement plan custodians limit you to what they sell. These limitations usually include traditional stocks and bonds.
  4. Yes. Midland allows clients to use alternative assets (like real estate) to build wealth. We are not your typical custodian. We do not sell investments. Midland allows you the freedom to invest in what you know best.
  5. Yes. It is legal. You can thank the IRS for that. Their website states: “IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option.”
  6. Yes. All income and expenses related to the asset flow into and out of your retirement account.
  7. No. Purchasing real estate in an IRA is not a taxable event. Investments in a retirement account are tax-sheltered like stocks and bonds.
  8. No. You cannot sell a property you already own to your retirement fund. You cannot personally buy or rent real estate that your retirement fund owns. Disqualified persons cannot buy or rent property owned by your retirement fund either. You and disqualified persons cannot transact with your IRA. However, the IRS has no problem with your real estate IRA renting/buying/selling to non-linear relatives (brothers, sisters, aunts, uncles, cousins, etc.).
  9. No. There is no limit to how much profit you can make from real estate deals in your retirement fund. The IRS only limits how much money you can contribute to your retirement fund each year.
  10. Yes. Self-directing a retirement plan easy to do. To get started, fill out our application online and get started using a real estate IRA today.

The goal of our clients is to diversify at least a part of their retirement portfolios. Self directed diversification can help protect your wealth if the stock market dips.

If you have more questions or want to take a more active role in a successful retirement, contact Midland.