strategy is possible with the assistance of an IRA administrator that allows alternative investments. Many real estate investors are more interested in lending money than owning physical property, and I can personally attest to their popularity at local REIA meetings. I have found they’re often easier to deal with than private money lenders. Whether you’re considering using your own IRA to invest in real estate or borrowing from somebody else’s, here are some tips and tricks of the trade you should know. 1 CHOOSE THE RIGHT ADMINISTRATOR An increasing number of companies offer self-directed IRAs. Make sure you spend some time doing your due diligence. Check online reviews and make a few test phone calls to get a feel for how long it takes to get in touch with a person directly. Call with a few questions and see how willing the person on the other end of the phone is to spend the time making sure you feel confi- dent in making a well-informed decision. Also, ask for a few references; quality service and speed of processing vary significantly across the industry. Some companies run a call-center-like environment, while others offer a more personalized experience. 2 BE FAMILIAR WITH THE RULES One of the major differences between a self-directed IRA company and your typical brokerage company (Fidelity, Schwab, Vanguard, etc.) is that self-di- rected IRA companies don’t provide investment advice or guidance. While they should be comfortable explaining what is and what isn’t allowable behav- ior in an IRA, it’s not their job to find or endorse any particular investment offer- ing. Make sure you speak with an IRA expert to ensure your idea follows the rules in Section 4975 of the IRS code.
Since you’re reading this magazine, I’m already confident that you’re inter- ested in real estate as an investment. While there are a number of trainers touting their expertise in seller financ- ing, creative deal structuring or deed- in-lieu investing, self-directed retire- ment accounts are the Swiss Army knife of real estate investing. I encourage you to review your retirement portfolio and then contact an expert to answer any questions about using tax-advantaged accounts to invest into whatever sort of real estate investment appeals to you. •
3 BE PREPARED TO STRIKE WHILE THE IRON’S HOT I field many phone calls every week from real estate investors who are excit- ed to take advantage of the tax-deferred or tax-free growth of an IRA. However, all too often, they’re shopping around for property while their IRA money is still tied up in mutual funds at anoth- er institution. There are times when a property is sold right out from under a prospective self-directed IRA inves- tor because he or she didn’t have an account established with funds available for a good-faith deposit. 4 BECOME AN EXPERT Attend as many educational events related to self-directed IRAs as possi- ble. More than $5 trillion in retirement plans is eligible to be self-directed. When you’ve established yourself as a savvy real estate investor and an IRA expert, people will flock to you with deal flow.
BY TYLER CARTER
Tyler Carter lives in Orlando, Fla., and works for NuView IRA. He has 10 years’ experience in the financial services indus- try, holds Series 7 and 66 licenses and is passionate about alternative investments of all types. Contact him at email@example.com or 407-716-3636.
16 | think realty magazine | mar :: apr 2016
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