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Funds From Self Directed Roth IRA Invested in Real Estate Can Grow Rapidly
By Adam D. King Platinum Quality Author
 

If the owner of a self directed Roth IRA invested in real estate, it is possible that he or she could double, triple or even quadruple that investment in a very short period of time. If you are thinking of purchasing real estate in your IRA, read on, there are some things that you need to know.

First of all, as you may know, you must have a self-directed account in order to make investments of this kind. Second, you must choose the right custodian, trustee or broker. Most only offer their clients the option of investing in traditional things like stocks and bonds.

Once you have found the right custodian and have your account set up, you're ready to go. But wait, do you know anything about real estate investing? Do you know the rules and regulations that relate to IRA real estate investments?

Funds from a self directed Roth IRA invested in real estate, must be for investment purposes only. You cannot buy property for personal use. For example, you and your family can not live in a house that you bought with IRA funds. There are other applicable rules.

In order to be sure that purchasing real estate in your IRA follows the rules; your custodian should be familiar with them. Make sure of that, before you sign up with them. Equity Trust, for example, can give you the details about what investments are and are not allowed by law.

Your custodian can tell you the rules, but he cannot find property for you to invest in. That's up to you. If you have some experience, then you might be okay. If not, you might want to get some help. There are some experienced real estate investors that will "take you by the hand", so to speak, and show you the way.

They can help you find the right deals. Cash deals, for example, are best. It may be possible to obtain a mortgage or other loan in the name of your IRA account, but purchasing real estate in your IRA will be most profitable if the needed funds are already in the account.

If you are working with an experienced investor, he will talk to you about how much you would like to invest and then look for property that can be purchased for that amount. You could do that yourself, if you have the time and the knowledge, but it can be a hassle.

Working with an experienced investor can take the headaches and the hassle out of purchasing real estate in your IRA and help you increase your wealth. If the owner of a self directed Roth IRA invested in real estate, without first learning the process or getting the right help, he could easily lose money. Or, he could lose his tax free status. You don't have to make those kinds of mistakes, not with all of the help that is available today.

 
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