There are so many situations in life where we have little or no control – new regulations enacted by government that take away individual control albeit for the greater good, giant online portals like Zillow, that take control of individual home owners and realtors online listings and information. But you can have control over where you invest your retirement funds through a SELF-DIRECTED IRA.
With the recent stock market volatility, which seemed to come out of nowhere, one begins to wonder whether to diversify retirement money outside the stock market. There is very little choice, banks are paying so little interest, “putting it under the mattress” seems like the only alternative! The good news, is you can set up a self-directed IRA and have more control over your assets. You will be able to manage where your retirement funds or invested, as long as it is in the hands of a custodian and it follows IRS rules.
You can invest in alternatives to securities such as: single and multi-family homes, condos, commercial property, undeveloped land; foreclosures, rehabs, in addition to equipment leasing, precious metals, livestock, and many other types of investments.
One of the most important IRS guidelines requires the investment be an arm’s length transaction. For example, you cannot personally use or benefit from the real estate in your self-directed IRA. All expenses and revenues must come from and go directly to the IRA. Also, you cannot buy from or sell an asset to a “disqualified person” - a close relative or the custodian or advisor of the IRA.
If you are thinking about diversifying, you may want to look into the creation of a self-directed IRA to invest in real estate or other qualified types of investments. Consult with your tax professional and retirement advisor.
If you’d like help finding investment property for your self-directed IRA call us at 631-765-5333, email me at , or visit our office at the corner of Main Road and Horton’s Lane in Southold. It’s a good time to explore alternatives and we’re here to help you!
Source: Equity Trust, Self-Directed Real Estate 101, www.TrustETC.com.