Real Estate Investing And IRAs

                                                                                         

Shortly after the ERISA laws established the IRA in 1974, the major financial companies started producing the first generation of plan documents. These documents were heavily burdened towards financial products that these companies could provide and that they would benefit from the most. This is perfectly understandable but the problem was that successive generations of plan documents followed precisely in their footsteps.The end result of this follow-the-leader planning was that entire classes of perfectly legitimate investments remained disallowed by these restrictive plan documents. Real Estate was probably the largest investment option hobbled by these developments. Savvy investors who understood the original laws, however, started to challenge the restrictions placed on most IRAs by developing freer plan documents and getting them approved.Fast-forward a few years and not only are self-directed IRAs widely available, they are made even stronger by the advent of self-directed Roth IRAs. Now, IRA owners can not only buy real estate whenever they choose, they can sell it when they choose, and they can avoid the lion's share of custodial fees associated with real estate transactions within IRAs.The Secret to Self-Directed IRA Real Estate InvestingThe power behind the self-directed IRA is the Limited Liability Company. Forming a self-directed IRA LLC allows the investor to have direct checkbook control over his or her IRA. For real estate deals, where time is always a factor, this freedom of action can make all of the difference. This is especially true with probate properties and tax lien properties, where some of the biggest returns lie, and where some of the most brutal competition is.Written By Scott Janko, The National Association of Financial and Estate Planning (NAFEP)For more details on the Self Directed IRA go to www.nafep.com.

About the author:
Scott Janko is president of The National Association of Financial and Estate Planning. NAFEP is an leader in the self directed retirement planning industry, providing education, training and specialized products to help utilize this unique strategy.

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