many developer success stories!
Never hit the MLS!!
13 of the 21 homes!!
Jim Onesti & Mike McCann – BHHS Fox & Roach.
215.627.6005 Main or 215.440.2052 Direct
Best way to get in touch: firstname.lastname@example.org
Bella Vista LOT APPROVED for a 4000 sq’ home
Located in the Meredith School District Catchment
Build your dream home! Several comps well above $1,000,000+++
OR build a custom home for a client!!
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For more information contact Jim Onesti. 215.440.2052 or email@example.com
Your not limited to buying stocks, Bonds and Mutual funds in your IRA. you can open a Self Directed IRA. continue to contribute to your IRA for the tax benefits but unlock those funds and buy a Triplex or a property to fix up and flip!!!!!
A self-directed IRA is the lesser known of IRA options and requires account owners to make active investments on behalf of the plan. To open one, an owner must hire a trustee or custodian to hold the IRA assets and be responsible for administering the account and filing required documents with the IRS.
Similar to other IRA accounts, owners can invest in stocks, bonds and mutual funds, but they can also invest in things that investment houses like Charles Schwabb, Fidelity and Vanguard don’t offer, like small businesses, boat slips, storage units, parking lots, land and homes.
Investors may still be leery of investing in the housing market, but real estate investor Scott FladHammer, says real estate can be a good long-term investment and generate higher returns than the stock market.
Investing in real-estate also provides a lot of options. “Owning real estate can be very rewarding, especially for people who are investing in what they know,” says Amy Gates, an independent advisor offering investment for Trust Advisory Group.
But the process of using a self-directed IRA to jump into investing in real estate requires preparation and caution.
“The move can make sense in certain circumstances, but only when the investor fully understands both the positives and negatives and the requirements involved,” cautions Ken Himmler, president of Los Angeles-based wealth management firm Integrated Asset Management.
Interested investors should seek legal advice, as well as input from an accountant and real estate agent for a well-rounded picture. They should also be familiar with the rules for the type of IRA they’re using. Whether it is a Simple IRA, Roth or Traditional IRA, SEP or Solo 401(k), contribution limits still apply, and there are penalties for early withdrawals.
Here are five things to keep in mind when considering investing in real estate through a self-directed IRA.
It takes time. Gates advises devising a timeline based on the account-opening process, transferring or rollover of assets and finding the actual investment.
It normally takes two to three weeks to open an account at a typical brokerage firm, and you’ll need to find a custodian who will hold real estate inside an IRA. The down payment must come from IRA funds, so rollovers may be required.
When a real estate investment is contracted, the IRA account holder reviews and signs the purchase agreement and then the custodian must approve it and release of funds to the title company. All of this takes time, so it’s prudent to learn as much as you can before jumping into a decision.
You cannot take advantage of IRA investments until you retire. You can’t use the fund to pay off your mortgage or live in or use the property you buy as an investment in the self-directed IRA.
“You buy it because it is anticipated to appreciate in value, plain and simple,” Gates says. You also lose the depreciation tax deduction that you would otherwise receive on an investment property.
Your spouse, immediate families or companies you have a 50% interest in cannot be involved. While it is possible for the property to be held as tenants in common, an IRA is an individual account—and you must avoid any conflicts of interest.
Self-dealing or enabling a transaction that is beneficial to you on the other end is strictly prohibited. You also cannot use the IRA as collateral for a loan; it should be treated like other retirement accounts.
It’s a lot of work. “While late-night infomercials highlight the potential benefits, many investors don’t fully appreciate or understand the reporting and administrative requirements involved in using a self-directed IRA to buy real estate,” according to Himmler. For example, the investor should not be doing the work on the property, especially because he can’t get reimbursed.
All expenses, maintenance, taxes and insurance are paid from the IRA. If there are association dues or golf memberships, those all must be withdrawn from the IRA. Finding tenants and contractors may take time, and every penny in and out must be approved by the custodian. FladHammer recommends having a reputable property management company in place to navigate the day-to-day duties.
All income from the property is tax deferred. That includes rental income and capital gains, Gates says. If you plan to be in a lower tax bracket at retirement, this is quite beneficial. You can also make tax deductible contributions to the IRA.
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