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Creating Self Directed IRA Passive Income
By Adam D. King Platinum Quality Author
 

Many people have questions about self directed IRA passive income. Most of us would prefer that our investments are such that little work is required on our own part, but the money continues to flow in. Here's a look at how that can be accomplished.

Stocks, bonds, mutual funds and certificates of deposit are the traditional choices for the IRA portfolio. The problem, today, is that most of these investments are slow to grow, without constantly trading and making the right trades. Returns from certificates of deposit barely keep up with inflation.

One reason that those traditional choices have been and continue to be popular is that you can usually see at least a little consistent growth, in the long run. Holding a position requires little effort on anyone's part.

There is another choice for self directed IRA passive income. That choice is real estate. Real estate can help you grow your account balance faster, if you make the right deals. Now, granted, there is a little work involved, at least at first, but any source of passive income requires a little initial work.

Let's say that while reading the classifieds, you find a house that needs some work. After talking with the owner, you find that he is aging, in poor health and planning to move in with his daughter. He wants to move as quickly as possible, because he is unable to even take care of simple maintenance, like mowing the grass.

He agrees to sell the property to you for $28,000. You direct your IRA custodian to make the purchase. Additional fund are needed for repairs and remodeling, let's say $7500. Those costs must also come out of the IRA account.

While upgrades are being completed, you are able to rent the property out for a year. $10,000 in collected rent becomes part of your self directed IRA passive income.

The couple that was renting the house likes the location and the renovations, so they inquire about purchasing the house. They agree to pay $135,000, the value of the home in its current condition.

After expenses, you made a profit of $93,500. Sound incredible? It's true. This is a real life example of a deal made by an Equity Trust client in DC.

You will find that the majority of your self directed IRA passive income is due to interest and tax advantages. If the client had made the real estate deal using his own personal funds, his total profit would have been about $20,000 less, because of capital gains taxes.

Albert Einstein said, "The most powerful force on earth is compounding interest." Compounding interest is the key to self directed IRA passive income. You earn interest on your contributions, your profits and you earn interest on that interest.

If you have no experience in real estate investments, there are some experienced investors that are willing to help you find the right deal. If you can complete just a few deals like the one above, you will have all of the self directed IRA passive income that you could want. And, you can have the retirement that you want...maybe sooner than you think.

 
An Authoritative Approach to Quick Turn Real Estate Investing.
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