With nearly three decades of experience in real estate and note IRAs and 401(k)s, Entrust has tools that can help you grow your business, and receive great tax advantages at the same time. We’ve put together a list of facts and fiction regarding real estate investing with your self-directed IRA. It will help you determine what can and can’t be done within a self-directed IRA, when investing in real estate such as:
- Real Property
- Residential
- Commercial
- Improved
- Unimproved
- Rehabs
- Foreclosures
- Options
- Tax Liens
- And more!
Facts vs. Fiction:
Fact: No one in the industry measures up to Entrust when it comes to knowledge, expertise, and support for real estate investors using tax-free and tax-deferred dollars.
Fiction: Real estate investments aren’t permitted in IRAs.
Fact: Real estate investments have been permitted in self-directed retirement plans since 1975.
Fiction: You can’t leverage real estate investments in an IRA.
Fact: You can leverage real estate investments in an IRA, but the debt can’t be recourse to you personally.
Fiction: You can’t roll over money from a 401(k) plan to an IRA.
Fact: You can roll over money from a 401(k) plan; you just can’t be working at the old employer anymore.
Fact: You can team up with other IRA owners, including friends, family, and partners IRAs, and even personal money for more purchasing power.
Fact: You can lend funds to anyone to make a purchase.
Fact: Income and profits from real estate investments come back to the IRA tax-deferred or tax-free.
Fact: By having funds immediately available in your account, you can close faster than when trying to acquire other conventional sources of financing.
Fact: You can use your IRA to combine with other investment opportunities.
Fact: All un-invested funds in your IRA are placed in FDIC insured accounts.
Fact: You, the IRA owner, direct how your IRA makes investments.
Fact: You, the IRA owner, can direct what bank your money is in.
By Munzer Ghosheh, Business Development Manager
If you envision big things for your financial future and retirement, get to know us. Munzer Ghosheh is the Director of Business Development for Entrust IRA Services, a premier provider of self-directed retirement plans. He can be reached at mghosheh@theentrustgroup.com or 310-899-3811.
In the current economy, it has become increasingly difficult to acquire traditional bank financing, even with good credit. With the tightening of lending practices to individuals and higher credit score requirements, borrowers are seeking private lending. Providing unsecured notes (private loans) to individuals is a good way to diversify your retirement portfolio.
Unsecured notes are not backed by collateral, which makes them a higher risk, but it can benefit both parties. For lenders, it means getting regular interest payments (or a lump sum upon maturity), and often a better return than other investments. For the borrowers, it provides quick access to the cash they need for that down payment or other needs, with a predictable fixed-interest rate. Of course, always do your due diligence before considering any kind of investment.
Investing in a private note is just one more alternative investment option available to you through a self-directed retirement account. Consult with your tax advisor to ensure that you are not participating in an prohibited transaction that can affect your investment. So the next time that you hear about an opportunity to invest in an unsecured note, see if it makes sense for your retirement future. If so, then take advantage of this great opportunity to explore and expand the wealth-building potential of your retirement funds.
Munzer Ghosheh is the Director of Business Development for Entrust IRA Services, the premier provider of self-directed retirement plans. You can reach him at mghosheh@theentrustgroup.com or 310-899-3811.
More and more individual investors are seeing the value in expanding their investments into nontraditional assets such as precious metals. Adding gold and other precious metals to your retirement account portfolio is a great way to create diversification and mitigate the overall risk.
Historically, precious metals, particularly gold, retain their value when stocks decline and provide a hedge against inflation. The fact that the value of these assets normally rises during periods of economic slowdown and uncertainty has made them an attractive option for many individuals that have recently seen the profits from their retirement plans plummet.
So how should you proceed if you want to add precious metals to your retirement plan? First, you need to set up a self-directed IRA with an established, reputable company that is knowledgeable of the process. Entrust IRA Services is the leader in the field and the choice of many investors for self-directed IRA administration. For over 25 years, Entrust has provided our clients administration and recordkeeping services for their self-directed retirement plans. With a self-directed IRA or Individual 401(k) plan, you have flexibility, control, and a world of choices when it comes to investment options.
As with any type of investment, buying precious metals has its risks. Before you invest, discuss your personal investment situation and goals with your financial advisor.
Take control of your financial future. Call me today at 310-899-3811 to learn more about self-directed retirement plans.
2008 marked the collapse of some of our largest financial institutions and most of us have seen our retirement accounts shrink significantly as a result of the unprecedented stock market decline in recent history.
There are about 55,000,000 IRAs and a staggering 95% of the trillions of dollars in those IRA funds are invested in Wall Street. In the wake of the market turmoil, what we are beginning to see is that a growing number of investors are deserting Wall Street and deploying their funds to truly self- directed retirement plans. As a result of poor performance in the stock market, more and more IRA holders are seeking direct control and empowerment of their retirement investments.
What is the benefit of making such a move? The main advantage of a truly self-directed IRA is that it allows the account holder flexibility to invest in all "allowable" assets, not just securities. That includes both "traditional" investments such as stocks, bonds, CDs and "non-traditional" investments such as real estate, trust deeds, notes, private stock, LPs, futures in addition to so much more. Currently, the retirement portfolios held in ‘traditional" IRA accounts in banks and brokerage firms offer only a limited menu of financial products with the incentive of making commissions. However, an Administrator of a self-directed IRA account like Entrust does not sell or promote any product and all fees are only made by doing the administration and record keeping of the IRA account.
So why limit your investment choices in your retirement plan? Take control of your financial future and expand the wealth generating potential of your assets with a truly self-directed IRA.
Munzer Ghosheh, Business Development Manager
mghosheh@theentrustgroup.com
With the tax deadline fast approaching, the difference between a Traditional and a Roth IRA is something that investors should take into consideration when allocating their retirement funds. While both forms of the IRA are great vehicles to save for retirement, each offers distinctive advantages. The Traditional IRA allows a person to make tax-deductible contributions (depending on income level). Why is this significant? It allows a person to deduct the amount they contribute from their income reported on their tax return as long as they are not barred by their level of income. However, tax will be paid on earnings when withdrawn from the IRA. While Roth IRA contributions are not tax-deductible, all earnings and principal are 100% tax free if all the rules and regulations are followed.
You should consult with your CPA before deciding whether to contribute to a Roth or a Traditional IRA. In general, the decision really should be based upon your tax bracket. Will it be lower or higher when you retire is the definitive question you should ask yourself. If it will be higher, then the better option would be the Roth IRA. Otherwise, it would be more prudent to select a Traditional IRA. The Roth IRA is going to make more sense in most situations but unfortunately, not everyone qualifies for a Roth. Also, the effect of potential changes in government policy regarding the tax rate and the tax advantaged status of both accounts should also be factored into the equation. There are still further distinctions between both forms of the IRA, but the bottom line is that the power and limitations of both should be studied thoroughly in determining which one best suits your long term financial needs and goals.
The most important consideration in today's economy is your tax planning. By contributing to the right IRA you have the advantage of compounding wealth on a tax deferred or tax free basis. Which is the better choice? It really is up to you!
Munzer Ghosheh, Business Development Manager
mghosheh@theentrustgroup.com