Buy Duplexes Through A Self-Directed IRA

With duplex financing more difficult to get and available properties at unbelievable values, many investors are turning to self directed individual retirement accounts (IRA) as a means of financing their acquisitions.

While IRAs exist in a variety of forms and are a method of sheltering retirement savings from certain taxes and lawsuits, it is through a self-directed IRA that an investor may directly choose the investments of the IRA.

Investors may roll over funds from other retirement accounts into a self-directed IRA, where they may invest in anything except life insurance, S-corporations and collectibles.

In other words, the IRA may be used to purchase real estate. However, it’s important to note there are some restrictions in doing so.

Property must be purchased in the name of the IRA, which acts as a trust. Profits and positive cash flow are deposited directly through the IRA’s custodian, which may not be the investor. The custodian also distributes funds to pay bills.

Self-directed IRAs are allowed to purchase real estate in a number of ways; either using all cash, by partnering with another investor or trust, or via leveraging.  For all intents and purposes, the self-directed IRA can invest just as a person would, but the funds are protected by the trust.

Many investors find by using their IRAs to invest in real estate that they earn a steadier appreciation than they would with a stock, in addition to cash flow, which helps boost the return on the investment.