A real estate 401K/IRA is technically no different than any retirement account that you already have. The government created the 401K/IRA to allow investments to grow tax-free (ROTH) or tax-deferred (Traditional) compounded over time to maximize growth. The IRA can also qualify for yearly tax-deductions (depending on the account), provide asset protection, and assets can be passed to future generations. This is a retirement account and not a loan against current retirement account values. You can still borrow up to $50K from a Real Estate 401K as with any other 401K. You are also allowed to take a loan or distribution in certain circumstances as with any other IRA account if emergency should arise and funds are available.
A real estate 401K/IRA is unique because it allows investments in real property such as flip properties, residential rentals, commercial rentals, mobile home parks, vacant land, ect. Buying Notes/Mortgages is one of the best passive investments available if backed by strong collateral. There is much less worry than with stock market investing where volatility can wipe out years of earning in a matter of months. Real estate assets can still produce income even in flat or down markets. Look back no further than Enron to realize that retirement savings can be wiped out quickly. Your retirement account owns the tangible asset or note that is secured by a tangible asset.
Another unique option is the ability to use leverage(obtain a mortgage) through non-recourse financing. This is based almost solely on the ability of your retirement account to repay the debt. Down payment, reserves, and income from property are used as consideration for obtaining financing. Personal credit issues and personal income do not play a major factor in obtaining these loans.
We are familiar with these transactions, and have vast experience working with Custodians to close your transactions. It is a foreign concept to most real estate professionals, and not always easy to complete your transactions. We can assist in guiding you from set up through obtaining assets for your account.
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Call Bryce Mason 770-240-1010 xt 700 to review your options!
*Note there are some leveraged transactions that may create a taxable situation in IRA's. You should consult your CPA/Accountant on how it may pertain to you. There are also disallowed transactions when using Self Directed retirement accounts so be aware of those prior to making any investments*
Oakmark Realty Inc. Ph: 770-240-1010 - Fax: 770-573-6469
6175 Hickory Flat Hwy Ste 110-331
Canton, GA 30115 www.oakmarkrealty.com
