IRAs offer many benefits, but are you wondering, “Can I hold real estate in my IRA?” Find out how it’s possible and what type of IRA you need to make this happen!
I’m Ted Thomas, and I’ve been investing in real estate since 1970.
My first experiences were single family homes and condominiums, then I grew into small office buildings and progressed to apartment properties.
Some of those properties were large enough to take up 16 acres with as many as 300 units that required a management team.
There were a lot of lessons to learn, and I learned more from my mistakes than from the successes. No question, experience counts when it comes to real estate investing.
People ask me, “Can I hold real estate in my IRA?”
Today you can expect to learn about the amazing world of self-directed IRA accounts, and you’ll also get an inside view of the tax lien certificate business and the world of tax defaulted property.
Want to learn how you can make big profits from bargain real estate? Would you like to buy mortgage-free homes for pennies on the dollar? Or earn double-digit interest rates? Learn how to secure your financial future with this FREE mini class today!
CAN I HOLD REAL ESTATE IN MY IRA? – THE RULES
Let’s start with a few rules of the road. Governments have rules, and the Congress of the United States made sure everyone could have a pension fund if they wanted one.
That’s how the IRA accounts came alive, and it’s also the way ROTH IRA accounts were invented.
The state government, the legislature of the state, makes the rules for tax lien certificates and tax defaulted property.
So, here’s a very short lesson. For example, the state must choose, does the state want to confiscate a tax defaulted property, or does the state wish to be flexible and benevolent and not confiscate?
CAN I HOLD REAL ESTATE IN MY IRA? – TAX LIEN CERTIFICATES
In one case, when they do not confiscate, they issue a tax lien certificate, and in the other instance, the legislature authorizes the county treasurer to confiscate and then sell the tax defaulted property.
In the counties and states that auction tax lien certificates, the state mandates the county pay certificate buyers outrageous interest rates, as high as 36%.
The investor does not get possession of the property. The purchaser receives a document, a certificate, a right to get the property, if the taxpayer doesn’t pay.
CAN I HOLD REAL ESTATE IN MY IRA? – IRAS
Today I’m answering the question, “Can I hold real estate in my IRA?”
The law recognized an IRA as a separate entity, just like a person is a separate entity or a business is a separate entity.
So, the local county will allow the IRA to purchase a property, and the IRA will be the owner of the property.
Yes, the IRA can hold real estate. At the time when you, acting for the IRA, purchase at the auction, it could be via your self-directed traditional IRA or it could be with your self-directed ROTH IRA.
I have a gift for you, a Free Mini Course, that will reveal the secrets of tax lien certificates and how to make big profits with tax deeds. Be sure to take advantage of it. It’s a great way to get started, and it costs you nothing.
CAN I HOLD REAL ESTATE IN MY IRA? – THE SELF-DIRECTED IRA
What are the self-directed IRA real estate rules? A simple transaction, for example, would include the self-directed IRA purchasing directly from the auctioneer who is employed by the county.
The self-directed IRA may simply sell, at will, at any time. However, the money stays within the IRA. It’s important that the money stay in the IRA so it’s protected from taxation. Money cannot be co-mingled.
The business of traditional or ROTH IRAs has been available for decades. Newcomers should make themselves aware that this is a government program that allows a person to self-direct their pension plan.
CAN I HOLD REAL ESTATE IN MY IRA? – AVOID THESE SELF-DIRECTED IRAS
In my opinion, the IRA should not be purchased from an insurance agent or a bank because the insurance agent or bank will only allow the IRA to buy bank products or insurance products.
The educated investor needs to understand that this is tax deferred and tax-free money if it is handled correctly. I’m only giving you examples. This is not a short course on traditional or ROTH IRAs.
CAN I HOLD REAL ESTATE IN MY IRA? – BUYING TAX DEFAULTED PROPERTY WITH A ROTH IRA
If you’re wondering, “Can I use my ROTH IRA to buy an investment property?” here’s an example of Mr. X who attended a tax defaulted property auction, using his ROTH IRA to bid, purchase and win a small, livable, single-family home.
The ROTH IRA purchased the home for less than $4,000, so the ROTH IRA now owns the property. If it requires maintenance or fix up, the ROTH IRA must provide that money.
If the property is rented, the rental fees must go into the ROTH IRA. Likewise, if the ROTH IRA sells the property, the money must go into the ROTH IRA.
CAN I HOLD REAL ESTATE IN MY IRA? – TAX-FREE INCOME
How is real estate taxed in an IRA? Here’s the big reward. If the ROTH IRA makes money, generates income from rent or from sales, the income is tax free for the life of the IRA.
For example, a few years later, this $4,000 purchase turned into an installment sale which generated $1,000 a month for 5 more years in the IRA.
$60,000 on a $4,000 investment should pass muster in any investor’s portfolio.
CAN I HOLD REAL ESTATE IN MY IRA? – COUNTIES WILL SELL PROPERTY TO AN IRA
The question is “Can I hold real estate in my IRA?” and the answer is definitely YES!
Counties are happy to sell tax defaulted single-family homes or any property to an IRA.
The county uses the money to pay employees, police departments, firefighters and school teachers.
The growth in your account is yours to keep.
TAKEAWAY
We hope you enjoyed Ted’s lesson, “Can I Hold Real Estate in My IRA?”
The answer is yes, you can buy, hold, and sell real estate in a self-directed traditional IRA or self-directed ROTH IRA for tax-deferred or tax-free money.
The IRA, which is an entity, will own the property, and all incoming and outgoing expenses having to do with that property must be paid from or deposited into the IRA.
An incredibly profitable combination is to use a self-directed ROTH IRA to buy and sell tax defaulted property.
Counties all across the USA sell tax lien and tax deed property.
Tax lien certificates pay interest rates of 16%, 18%, 24%, or even 36%, and if you don’t get paid, you get the property without a mortgage.
At tax deed auctions, you can purchase property outright. The bidding begins around the amount of the unpaid property taxes, so it’s possible to get mortgage-free real estate for 10, 20, or 30 cents on the dollar.
Now factor in the tax savings of using an IRA to purchase tax defaulted property, and you have a real investment powerhouse at your fingertips!
If you’d like to know more, Ted Thomas can teach you. For over 25 years, Ted’s been showing students how to successfully invest in bargain real estate.
Ted Thomas offers full support and a complete training with home study courses, Q&A sessions, live tutorials, workshops & web classes, and personal coaching.
Learn the secrets of making money in real estate previously only known to the one-percenters with Ted’s FREE Master Class. It costs you nothing and only takes about an hour of your time. Change your life today. Why wait?
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