How To Use a Self Directed IRA to Invest in Real Estate

Many folks have self directed IRA?s or 401k?s that they?d like to use to invest in real estate, but don?t have the knowhow to do so.? In this article you?ll learn about great ways to invest in real estate, without the hassle of management. Keep in mind that active real estate investing isn?t for everyone, but that doesn?t mean you can?t benefit from the great returns in real estate. You can still earn great returns from a self directed IRA (6-12%), without having to deal with leaking toilets and screaming tenants, but benefit from being invested in bricks and mortar.

Self Directed IRA?s are great instruments to use for the average investor who wants to be diversified in real estate, but doesn?t know how to go about it. Equity Trust Company is an example of a company that serves as a neutral third party to manage the account. I would highly recommend them as they manage hundreds of thousands of accounts and really know what they?re doing. We then pay our investors that get setup through them a flat monthly interest rate and use the money to buy an apartment building and give the investor a note and mortgage secured against the building.

Our buildings are in A-B areas, so they are very desirable and liquid, in case an investor wants to exit. Also since we own more than 154 units and have been in business for over 12 years, we have a ton of experience. If you?re considering investing as a private lender to an active real estate investor, make sure to find someone that has a lot of experience managing and owning real estate. Also make sure the deal your investing in has a lot of equity and is in a great part of town.

I have used private lenders to fund some of my deals, but only use a handful a year. They love me because they make 10% interest with absolutely no work, and have a very secure investment in real estate, without any hassle. Make sure to check with a local securities attorney to learn about the rules in looking for private lenders. It is very important that you follow these rules. As a real estate investor you usually can?t advertise to find private investors. Instead reach out to friends and family and people you know. You?d be surprised how many people have money in CD?s or 401k?s earning very little interest.

Self directed IRA?s are amazing in that you can invest in real estate through them and avoid paying taxes on your earnings. Similar rules to a standard IRA apply. You must use a guardian company, you must start to withdrawal at age 65, etc? Visit equity trust company?s website for more info. Feel free to email me (Mitch) anytime if I can answer your questions about using a self directed IRA to invest in real estate: mitchpainter1@gmail.com.

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Mitch Painter has been an active real estate investor for 12 years and has done over 250 deals to date. You can visit his blog to learn more about investing in real estate at www.Real-Estate-Rocks.com. Happy Investing!

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Source: http://www.investmentpropertyhelp.com/how-to-use-a-self-directed-ira-to-invest-in-real-estate/

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