Is a self-directed IRA for real estate investments a good idea?

Question

I want to take advantage of some hot market prices and invest in real estate using my retirement funds. Has anyone else out there gone through this process before? I've been looking at Guidant Financial & Benetrends.

Answer 1

An IRA is good for any investment.

Answer 2

I don't know about those two companies but I have my account with Guidant Financial. The main advantage obviously is you can utilize your retirement funds that might otherwise be lanquishing in a poor performing fund. In addition to real estate, you can invest in a business but the IRS is strict on the rules so you need to completely understand the ins and outs otherwise it could cost you. For instance, you are not going to be able to commingle or use the funds personally unless it is for the benefit of the fund so there is no running off to Hawaii with the proceeds unless you can show that it was to buy more real estate and actually look at some properties, etc. GOOD LUCK

Answer 3

I've have a little knowledge about all this but I can tell you one thing IRA is always a good investment. Recently one of my closed ones have invested in this with Benetrends and he was telling me the benefits of it. He was really satisfied with the company services and the IRA benefits.

Answer 4

The loans are tough to find, and if you screw something up, you can damage your tax benefits.

Your financing must be non-recourse. Meaning the lender can't come back at you for any losses. So, they can lend on the collateral only. Which usually means higher rates, tougher terms, and don't expect to find anyone willing to do anything without a 30-40% downpayment.

You're still taxed on any gains for the financed portion.

It's not bad, but not as sexy as it sounds once you dig deeper.

Answer 5

I know nothing about those companies, but self-directed IRAs are a great concept, in general.