HARBOR MASTER SHIRA is Gaining More Attention As an IRA Investing Strategy
I f you would like to tap into your qualified retirement plan to purchase investment property and avoid all the usual prohibited transactions, the SAFE HARBOR®-Directed IRA™ (SHIRA™) may be the vehicle for you. Lasaii’s OUTSIDE® structure of utilizing IRA money for the purchase of real estate is extremely flexible, has zero use-restrictions and costs little to noth- ing to set up and maintain. Don’t have enough money in your IRA to completely fund the investment of your choice? Not a problem. Qualified plan monies can be coordinated with ordinary income to satisfy purchasing requirements. Worried about having enough liquid assets in the IRA to pay for property taxes, insurance and maintenance? No worries. With a SHIRA, you don’t have to pay those items with IRA dollars. Thinking about buying a fixer-up- per, working on it yourself and then self-managing the rental? Absolutely—a match made in heaven! Truth is, just about the only thing that is excluded from qualifying with a SHIRA plan is the use of a Roth IRA. There are three components in the SHIRA program: 1 Real estate—any real estate! This could be a personal residence, a vacation prop- erty, a rental property or even commercial real estate. It could be a new purchase, a current home or a yet-to-be-identified real estate bargain. 2 An IRA or other qualified retirement plan that can be converted to an IRA. Usually a value of at least $250,000 is required to produce measurable benefit, but often as little as $100,000 can be structured to advantage. 3 Amortgage—yes, a mortgage. This may seem contradictory to you because you are probably imagining the IRA buying the real
property, commercial sites or land on which to build. You can also use the SHIRA to fund payments for an existing mortgage. Flexibility: If you sell one property supported by your SAFE HARBOR- Directed IRA, you can restructure your SHIRA to fund a new property. You can buy in the United States or overseas if you qualify. You can mix SHIRA and non- SHIRA funds to buy property or multiple properties. You can buy real estate as an individual or with partners. Immediate Occupancy and Enjoyment: The real estate is titled in your name, not in the name of your IRA, so you and your family can occupy and enjoy your home immediately. You can use the property as a primary residence, a vacation home, a rental property or simply keep it as an investment. The choice is yours. Appreciation: Real estate, as is true with other investments, has an opportunity to appreciate in value over time. If you choose to support the purchase of real estate with a SAFE HARBOR-Directed IRA, then you will be allowed to occupy and enjoy the property while it appreciates in value. Rental Income: Any net rental income goes directly to the individual and not to the
estate outright as it might in a self-directed IRA. However, that is not the case with a SHIRA. The SHIRA structure is only of benefit in coordination with a mortgage. Any mortgage will qualify—traditional, FHA, HELOC or even private financing. You are probably wondering, why use your IRA if you have to get a mortgage? The answer is simple. It is not only good business to use leverage wherever pos- sible because your ROI will be so much greater, but with a SHIRA, a mortgage is necessary to act as a fulcrum supporting the gradual transfer of IRA assets into the real estate investment. Worried about qualifying for a mort- gage? Don’t be. That’s where your SHIRA comes into play. Skillfully structured by Lasaii’s consultants, your SHIRA will qualify you for that loan. With the completion of a SHIRA plan, in essence, you now own two investments. One is your SAFE HARBOR-Directed IRA, and the other is your real estate. One sup- ports the other while the two exist legally as completely separate entities. LET’S EXAMINE THE BENEFITS OF THE SAFE HARBOR- DIRECTED IRA Choices: With a SAFE HARBOR-Directed IRA, you can buy a primary residence, a second home, a vacation/rental/investment
MAINTENANCE & ONGOING FIDUCIARY RESPONSIBILITY
COORDINATION & INTEGRATION
FLEXIBILITY
FOUNDATION
34 THINK REALTY INVESTOR REVIEW
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