Can I Use IRA Money to Invest in Real Estate?

How To Invest in Real Estate Using IRA Money

If you’ve wondered, “Can I Use IRA Money to Invest in Real Estate?” the answer is yes, absolutely, but many people don’t know this.

Ted Thomas, America’s Leading Authority on Tax Lien Certificates and Tax Deed investing, is about to reveal a powerful combo, a way to yield high returns in real estate while keeping Uncle Sam out of your pocket!

Can I use IRA money to invest in real estate? It’s a question I get asked, and today I’m going to give you the answer and show you how to do it. First of all, if you don’t know what an IRA stands for, that means individual retirement account.

My name is Ted Thomas, and for the past 30 years, I’ve been teaching, guiding and mentoring people on how to invest in tax lien certificates and tax deeds.

Today, I’m going to show you a little bit about how to do that with an individual retirement account.

Also, we’re going to talk about a business that’s highly lucrative for investors and a way to make profits that very few people know about.

You’re going to discover the same thing that I did years ago, when I found tax lien certificates and learned I could buy low at 5 cents, 10 cents on the dollar.

At that point in time, I completely changed my investment strategy. Why? Because real estate goes up and down, just like the markets go up and down, the stock market and also the metals market and so on.

I wanted to get into a business that was kind of flat lined, where I always knew I could make money, and that certainly is tax lien certificates.

About the IRA

So lets talk about individual retirement accounts. This is pretty confusing for a lot of people the first time they hear about it.

That’s simply because, these weren’t invented by a group of people that didn’t let the world know about it. These are invented specially by savings and loan associations, which were banks in those days, and by insurance companies.

What they were trying to do was get more deposits from the little guy. In other words, someone who would put in $1,500, $2,000, $5,000 dollars a year.

They wanted to get those accounts, so they lobbied the Congress of the United States and said, “Look, “let’s get people putting money into their own account.”

You Can’t Rely on Social Security

The big problem of course has always been, and you’re probably one of the people worried about it yourself is if Social security, is going to give you enough money to retire?

Well, of course not. You’re not going to get anywhere near the money you need to retire.

So the insurance companies and the savings and loans at that time took advantage of that and went to the Congress and said, “Look, let’s get people investing in their own individual retirement account.”

Today, instead of saying individual retirement account, we abbreviate everything and call it an IRA account.

IRA Tax Deduction

The banks got that legislation passed, then everybody said, “Wow, I can earn money, put that money in the bank, and I can take a tax deduction.”

Well, I’m going to tell you America’s built on tax deduction. It doesn’t matter whether it’s you or me or the richest guy in the world, Jeff Bezos. How do they do it? They take tax deductions.

That’s what an IRA is. It allows you to legally and ethically take a tax deduction on money you put in the bank.

Let’s keep in mind who began this whole trend. It was the banks, and at that time they called them the savings and loan.

The insurance companies had to hire lobbyists to do this, to get all the Senators and the Congressmen to understand what was going on. It took a little while before they passed this legislation, but once it did, the whole business took off.

Now everyone knows that social security isn’t going to be good for them. You’re going to get your check. They’ll guarantee you that, I’m sure. However, it’s not going to be big enough.

Types of IRA Accounts

So we have IRA accounts, whether it’s a traditional IRA account or a Roth IRA, which was named after a Senator from Connecticut.

If you have a Roth IRA, you can put your money in, pay your taxes then, but then you don’t have to pay taxes for the life of that IRA.

This particular article is all about individual retirement accounts and how to do that with real estate.

If you can put real estate into a Roth IRA, for example, and it cost you $20,000 dollars but it’s worth $100,000 dollars, all that profit later on, between what you paid and the margin of what you sell it for, is going to be tax-free.

So you really want to tune into these Roth IRAs and the traditional IRA. The keys to these accounts are they’re made by individuals.

Invest in Real Estate With a Self-Directed IRA

When you open this Roth IRA, you need to have an individual, self-directed IRA. Write that word down, self-directed IRA.

The banks, the savings and loans, and the insurance companies are going to say that they give you a self-directed IRA, but their self-directed account only allows you to buy bank products, or buy products the insurance company could sell.

What does an insurance company sell? They sell insurance. Are you just going to keep stacking the insurance policies in there? No, I don’t think so.

Are you going to keep putting money in the bank? Well, yes, you probably will, but you want to be able to put real estate in there. You want to be able to put in metals. These accounts will take anything you want.

At the time, when they created all this, everybody was confused, and they’re still confused. So you’re going to need to do this on your own. You need to learn about a custodian or someone that handles those accounts.

I’m not an attorney. I’m not a CPA, and I’m not a person that’s trying to sell you on individual retirement accounts. The IRA account is for your benefit.

This whole process works very, very well, but you need to think in terms of a self-directed IRA. That means you’re going to handle your own account.

Tax Savings on Investment Within a IRA

I want you to imagine putting money in an individual retirement account. Let’s say you put $20,000 dollars in, and then in 10 years, because that was a piece of real estate, it’s worth $200,000.

Well, if you’re putting it in for $20,000, and you sell it for $200,000 within your IRA, I can tell you right now there’s not going to be a tax on it.

The rest of the world is going to pay 25 to 50 percent tax. So this is a way that you can legally and ethically not have to pay big taxes.

Why You Need a Trustee

The big problem is no one mentions that you can do real estate in an IRA account. So you need to learn about this, and you need to be talking with custodians and people that will hold onto this money and be a trustee for you.

You need to have people that understand it. You don’t want to just take your gun out of the holster and start shooting. You want to start learning about what this is. It’s not complicated. It’s very easy.

It just was all created by the banks, so there’s nothing negative here. Everything is really super positive.

As I said earlier, I’m not a CPA. I’m not a financial planner, and I’m not an attorney. I’m not teaching you from that perspective, but I am teaching you from a prepared investor’s perspective.

That’s what I’ve been doing for the last 30 years. I’ve been buying tax lien certificates, tax deeds and teaching people like you to do it.

You must have a separate custodian, a separate party, handling this whole thing for you.

A Smart Investment

Real estate in my opinion is a good investment for your IRA. That doesn’t mean you couldn’t put other investments in there, but I’m a specialist in real estate. It’s what I teach people to do, and I changed my whole portfolio.

I stopped doing regular real estate because I could buy at tax auctions and get properties for 5, 10, 20 cents on the dollar. If I bought those within a Roth IRA, any money I make in the future is going to be tax exempt.

When you can make money in an IRA account and not pay taxes, it’s the same thing as earning 25 to 50 percent extra. So I’m just a prepared investor. You’re not learning it from a IRA expert.

You’re not learning it from a CPA. You’re learning from a person that’s actually doing this.

So today’s question is can I use IRA money to invest in real estate? And the answer is definitely yes. When I learned about it, I changed my whole investment portfolio.

Booms and Recessions in the Market

I’ve been around for 30 years in this business. Before that, I was in regular real estate, but there were too many ups and downs, too many recessions, too many booms.

So what happens is real estate will recede, then it will boom, then it will recede. I wanted to be in real estate that was the same all the time, and tax liens and tax defaulted properties are the same all the time.

My perspective is all from what an investor would want to do. I don’t have the perspective of selling you an IRA. I’m not an attorney trying to get you to buy something else.

If you can get passive investments, which would be tax lien certificates, you can buy those in a traditional IRA, or you can buy those in a Roth IRA.

It’s the same thing with the properties at auction. If you buy that property at auction in a traditional IRA, that’s okay. When you sell it, you’re going to have to pay some taxes.

However, if you bought it within the confines of the Roth IRA, the whole ballgame changes because you won’t have to pay taxes on the sale.

An Example of Tax Savings From Investing With an IRA

riverdale homeI want you to think about my example, that I mentioned it earlier.

Let’s say you go to the auction, and there’s a $200,000 property, and you buy it for 20 cents on the dollar. So you spent about $40,000 dollars.

Yes, when you go into the IRA, you’re going to have to pay some tax on that $40,000. However, what if you sell that property a year or two or five down the road, and you sell it for the 200,000?

Well, the difference between the $40,000 and the $200,000 is your margin of profit, but you don’t have to pay taxes on your margin of profit.

So if your margin of profit was $160,000 dollars, my goodness, not to pay taxes would be amazing. If you did have to pay taxes, it would be in the lowest brackets, 25% percent of that to Uncle Sam and who knows what to the state.

It’s the same situation in any other investment. You’re going to have to pay taxes, but in a Roth IRA you’re not going to have to pay any taxes.

Get Wealthy by Investing Within Your IRA

Now look, I’m not an expert on that, but I am an expert enough to tell you that you need to do that.

Property is purchased at auction. I have dozens of clients that buy in Roth IRAs, and they might only invest $10,000 or $15,000 dollars. But when they sell out for $60,000 and $80,000, they don’t have to be taxes.

Let me tell you, when you can make that kind of money and not pay taxes, you’re going to get wealthy very, very quickly. Very quickly.

Investing in Tax Liens and Tax Deeds

You want to take training from a professional whether you’re doing tax liens or deeds, or you’re going to get a company to handle all this. You want to start doing your own research, and find a company that does that.

The business of tax liens and tax deeds is perfect for the average person. Why? Because it’s easy to learn.

You don’t have to have big investment money to get started, but you can end up being very, very wealthy, especially if you use some of these techniques that I’m mentioning today.

If you’re buying tax lien certificates, 97% of those certificates will pay you all of your money back within 24 months.

With tax defaulted property, you’re going to get the deed to the property right away, so more than likely, they’ll already be out of the property.

If they’re still in the property you would not communicate with them. You would hire the sheriff to evict them.

We have a nice program for you, and it’s a gift from me. It’s called the Safe Haven. It will tell you about tax lien certificates, all the secrets.

If you want to learn about tax deeds and how to buy these properties for 60%, 70%, and 80% discounts, it will teach you about tax deeds also. It’s free, so be sure to get your Safe Haven course today.

Mistakes to Avoid

I do want to mention, there are two big mistakes that people make at these auctions.

Big mistake number one is they don’t look at the property. Don’t buy properties you haven’t looked at.

Why not? What if there was a hurricane? What if there was a windstorm? What if there was a flood? What if the place had burned down? I could go on and on. You’re getting the idea.

That could have happened, and you don’t know it, and the tax collector doesn’t know it.

When you buy at that auction, they don’t say you’re going to get any money back. They say, buyer beware. So you need to beware. and make sure you looked at the property.

The other big mistake is people get all excited at the auction, and they start buying properties that, number one, they haven’t looked at, and number two, which is a big deal, they don’t have an exit strategy.

If you don’t know what you’re going to sell a property for, then for goodness’ sake, don’t buy it because you’ll just keep bidding until you win. If you win, that’s not going to do you a lot of good if you paid too much money.

You need to have an exit strategy.


Combine the power of tax exemption with deep discount real estate, and you have a way to create massive wealth.

We hope you enjoyed Ted’s lesson, “Can I Use Ira Money to Invest in Real Estate?” The answer is, yes, you can. Just make sure you’re using a self-directed IRA.

Whether it’s a traditional or a Roth IRA, as long as it’s self-directed, you can use it to invest in real estate.

What kind of real estate should you invest in? Ted Thomas, who’s been involved in real estate for decades,  found tax liens and deeds over 30 years ago and never looked back.

Tax lien and tax deed investing is recession proof, and where else can you get mortgage-free properties for pennies on the dollar?

There’s no one more qualified and dedicated to teaching you about tax lien and deed investing than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property.

Ted is famous for showing his students how to earn 6-figure incomes within a year of completing his training.

His team of Ted Thomas certified coaches and guidance facilitators help students out with research and provide expert answers to questions about tax liens and tax deed investing.

Ted Thomas is the only one who offers full support and the best training with home-study courses, personal coaching, Q&A webinar sessions, live web classes, and workshops.

Safe Haven 720x1024 1 1If you want to learn more, you can begin your education today absolutely FREE with Ted’s Safe Haven Investor System course (valued at $197).

Safe Haven is 2 hours of streaming videos and a 100-page illustrated manual that teaches you how to buy tax lien certificates and tax deed properties. So be sure to get your FREE Safe Haven course today.

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Ted Thomas

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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