We get asked questions all of the time from savvy investors who we work with here at Full Disclosure LLC.
Most of the questions surround buying investment properties in Corpus Christi, TX… which we of course know a lot about.
But one part of buying an investment property / rental property is how are you going to pay for it?
And, can I use my IRA to buy local investment properties?
Self Directed IRAs (SDIRA’s) for Real Estate – Can You Use Them To Buy any types of Texas Properties?
First off, IRA refers to an individual retirement account.
IRA’s traditionally hold investments like stocks, mutual funds, etc…. mainly because that’s the mainstream way most people save for retirement.
But, since you’re reading this article you know that real estate can be a GREAT option for increasing your wealth.
But… how can you use your IRA to grow your retirement fund, earn the tax benefits of the IRA, and the benefits of Texas real estate too?
Though the self-directed IRAreal estate is increasingly being taken up by investors, you should do certain things ensure that the law is being followed to the letter when you use your IRA for local TX real estate investments.
Some Simple SDIRA’s for Real Estate Rules To Follow
No “Self Dealing”
If you’re using your self-directed IRA for real estate you are forbidden from self-dealing.
Self-dealing is outlawed with your SDIRA in the sense that it can’t purchase land or property (both commercial and residential) for the owner or any family member to reside in.
It is also prohibited from selling property or land to the owner of the IRA or family members in the process of business dealings in investment properties.
The Process of Buying Texas Investment properties with Your Self Directed IRA
There are very specific rules that you have to follow if you’re using your SDIRA to pick up Corpus Christi TX properties.
Once an you provide the correct documentation for purchasing the local Corpus Christi investment property to the self-directed IRA custodian, the custodian will start the purchasing process on behalf of the self-directed IRA real estate.
All the costs related to the purchase of the property are channeled through the self-directed IRA for real estate; hence it’s vital that it must have enough cash to pay for these costs.
Failure of this will lead to the forfeiture of tax benefits and the penalties to be paid by the IRA.
Choose The Type Of Self Directed IRA Wisely To Use It For Your Real Estate Investments
There are lots of options when it comes to self-directed IRA’s.
Not all SDIRA’s allow you to buy real estate in them… so you’ll have to do your research to find the best SDIRA custodians so you can start buying investments properties in it.
NOTE: We’ve worked with many SDIRA companies and we’ve found the best providers who are very experienced in working with real estate within an IRA. Call us today at 361-695-1943 or email us through our Contact page and we can give you information on the best SDIRA companies for your real estate investments. Our if you like the idea of growing tax free wealth in your SDIRA with real estate investments but don’t know a thing about real estate. Don’t Worry – we are always looking for debt partners who invest with us through their SDIRA’s. In other words, we do all the work…it’s what we do and you get great returns that can grow tax free within your SDIRA’s
Some Self Directed IRAs have more restrictions than others.
As an example… some of them require that you submit the investment details to them… they analyze it… then they send the cash from the account.
But there are accounts that give you whats called “check book control”.
An investor in self-directed IRA for real estate with control of the checkbook is able to make purchases by just writing checks rather than having to go through the lengthy process of having to pass it through the custodian first. This lets you take advantage of deals that you have to act quickly on (which many of our local investments properties go fast). But, we have found that the custodians we work with are quick and able to process our requests in the same day.
Your Role In The Investment After The SDIRA Purchases It
You as the owner of the self directed IRA account has the ability to really manage the investment in a hands on manner. The roles include: receiving checks for rent payments from tenants, managing the properties, etc… everything you’d normally do as the owner of an investment property. Again, don’t worry if you are not comfortable with rents and tenants and rehabbing houses…we do all that for our debt partners. So you just sit back and collect your check.
Of course, there are more guidelines that you have to follow if you plan on using your self directed IRA for real estate investments… so make sure you do your homework and do these two things immediately:
- Find a great self directed IRA company / custodian: This is the first step. You have to get this in place before you even think about purchasing anything through your IRA or partnering with us. . If your current IRA holder won’t allow you to buy and hold real estate in it… call us at 361-695-1943 and we’ll refer you to the best local custodians… and they’ll be able to help you transfer your current IRA to your new self directed IRA.
- Find a couple great investment property experts, like us at Full Disclosure LLC. One of the best ways to get great investment properties is by working with a professional investment property company like ours as either active or passive investors.. We find high discount properties (both single family and multifamily) in Corpus Christi Texas and surrounding areas to either partner on or sell them to investors like you at discounts so you can turn them into solid profitable rental properties. Join our Preferred Buyers List Here >>
We Can Help You Get Rolling With Your SDIRA For Real Estate.
Just reach out to us at the phone number below or send us an email… and we’ll walk you through the process, point you to the best SDIRA resources in Texas, and get you on our Preferred Investment Property buyers list.
Call Us For More Info On Buying Corpus Christi, TX and surrounding area
Real Estate In Your IRA at 361-695-1943