7 Ways To Fund Your Real Estate Investments You May Not Have Thought About
7 Ways To Fund Your Real Estate Investments You May Not Have Thought About
Real estate is one of the best and most reliable investment vehicles to grow your wealth over time. Many people have realized that but feel they lack the means to get started investing in real estate. Either they don’t have the money or they can’t find the deals to invest in. In this article we talk about the money – we go over several ways to fund your real estate investments that you may not have thought about. Whether you are an active or passive investor you will be able to find one that works for you!
Retirement Plans and Self Directed IRA
As investors are becoming more savvy about preparing for their retirement they have begun to understand the benefits of diversifying their retirement nest egg and moving away from the conventional wall street focused model of putting all your retirement funds into the stock market. Self Directed IRAs (SD-IRAs) allow an investor to make passive investments into alternative investments such as real estate, precious metals, tax lien certificates etc.
SD-IRAs are typically opened using a certified IRA custodian and the owner of the SD-IRA can not be actively involved in the operation of the property – i.e they must remain passive investors. An investor can open a completely new account or roll over funds from an existing retirement account. There are many benefits to owning real estate in a SD-IRA such as tax free gains.
Investors should educate themselves and or use the guidance of an adviser so that purchases will be made appropriately to prevent unwanted loss of tax benefits or potential Unrelated Business Income Tax (UBIT) when using a mortgage to purchase investment property.
Bonus Tip: If you are not yet ready to open up a self-directed IRA you may be able to borrow against your current retirement account. As we follow the guidance of responsible leverage you should, with this and all other approaches mentioned in this article, take a look at the big picture of your overall financial health and ensure