In a real estate market where all-cash offers can win a bidding war for a house for sale, either from families or real estate investors, a self-directed IRA can be a way to win that war without pulling cash out of your pocket.
Retirement account holders and wealthy foreign investors can often pay entirely in cash for a house in the U.S., beating out first-time home buyers who may have difficulty qualifying for a mortgage loan or other financing. For investors with an IRA, they can use that money to buy a home with a negotiating tactic that’s often successful: cash.
As an alternative to the stock market, income-producing real estate properties can provide long-term income and appreciation gains for real estate investors while allowing investors to continue earning tax-free IRA benefits in their retirement portfolio.
A self-directed IRA can be used to simply write a check from traditional IRA or Roth IRA funds to buy real estate in the United States or around the world. All of the income and gains associated with self-directed IRA investments grow tax-deferred. [Read more…]