Buying real estate is one investment goal that many investors are highly interested in doing. In fact, there is no other investment category or genre that has produced more millionaires than real estate. For most investors that are getting started real estate typically acts as a basis for hands on experience and education; this is the investment where the beginners come to learn.
So how do the investors become millionaires without actually becoming six hundred thousandaires after taxation? Well the answer is pretty simple, they do it behind the tax walls or shelters. Many people thought this was only accomplishable through a REIT (Real Estate Investment Trust). While this is certainly one way to buy real estate with an IRA, it is not the only way.
What is a Real Estate Investment Trust?
A REIT is more like an investment vehicle like a mutual fund or something along those lines. The funds from the IRA simple go into the account and are then managed by a group of individuals the IRA holder has never met, and probably never will meet. Those investors then buy real estate all over the US and then pay out dividend or proceeds to the IRA.
What are the advantages?
When an investor buys real estate through a self-directed or real estate IRA he or she can decide which properties to invest in. This allows the funds from the IRA to go directly into the local economy thus helping to stimulate growth locally. The account holder can also go after foreclosed or short sold property. These investments are not as likely to be found in the REIT.
The account holder also begins to feel a greater sense of ownership in the IRA because she or he has made the decisions that have lead to its growth rather than leaving it to anonymous investors in NY or some other location.
The basics on how the self-directed IRA works help most people to understand the process of getting set up and moving forward. The image on how it all works is also very descriptive. We encourage all investors who are looking to get involved in real estate to explore the options of moving their funds from their 401(k)s or IRAs into an account structure that will allow and encourage investments in the private markets. These opportunities can be just as lucrative without the cyclical recessions that are as heavily realized by the pubic markets.
SilverStone’s processionals are well connected to assist their clients in a number of ways. The first is the assistance of setting up a self directed IRA. The second is the rollover or transfer of the funds from previous IRAs and 401(k)s into the new account. The third are the connections to investment opportunities in the private equity opportunities, real estate opportunities, and many others. To find out more on how our professionals can help you contact us to day.