Investments
Alternative: IRA / 401K
Invest in Real Estate Using Your IRA or 401K
Turbo-charge Your Self-Directed IRA or 401K
It’s Easy! We can Show You How
A retirement plan designed especially for real estate investors
INVEST RETIREMENT SAVINGS IN WHAT
YOU KNOW AND UNDERSTAND – REAL ESTATE!
Invest in REO/Foreclosures, Houses, Apartments, Condos, Commercial Buildings, Land, Bridge Loans, 2nd Loans, Personal loans, Seller-carry Loans, Options, Local Business Opportunities, Mutual Funds and a Host of other Investments.
There are many benefits of our plan to investors. Here are just two of them: 1. When you purchase real estate with a loan, unlike an IRA, your profits are not taxed. (No UBIT tax!) 2. By having checkbook control, you do not have to pay a custodial fee for a check to pay for a toilet replacement, a roof repair, etc. Plus, you do not have to fill out a form every time you have a minor repair, and then wait a week or two for the custodian to pay your repairman. You just write a check!
Self-directed IRAs and 401Ks are not created equal. Self-directed can mean very little control up to 100% control and your investment choices can be slim or they can be extensive. It’s all about control and choices. Most people are not aware of these differences. They can mean the difference between a shrinking retirement account and one that is increasing in value or between being able to retire and having to work during retirement years. While self directed IRAs have achieved a preferred status over a self-directed 401K, the truth is that a self-directed 401K has major advantages over a self directed IRA. This is a secret that many professionals in this industry don’t want you to know.
Many people like to invest in real estate to create wealth and for financial security but are unaware that they can invest their IRA and 401K retirement savings in real estate and have total control and flexibility while enjoying tremendous tax advantages. Recently, Americans have seen the value of their IRAs and 401Ks drop sharply as the stock market took a historic dive and then went on a roller-coaster ride. More than at any time in recent years people are rethinking their approach to funding their retirement.
How many Americans would invest their retirement funds in real estate if they understood the benefits and how to do it? The answer; a lot of them! What if they could get bank financing for real estate purchases and borrow cash from their retirement funds with no penalties and taxes! It would seem like it is too good to be true.
The key is in how you structure your IRA or 401K. If done correctly, you can have 100% control and checkbook access to your funds and be in a position to act quickly on a wide variety of investments opportunities, including real estate.
Now, with the proper retirement fund structure, you can tap into the $3 Trillion retirement market and see your retirement income and your investment capital soar. Would you like to take advantage of investments like rental properties, lease to purchase transactions, fix-up real estate, or even commercial property? You may even be able to have YOUR OWN IRA or 401K purchase your dream retirement home right now!
We can show you how to correctly set one up with the following benefits:
- Tax Free Growth of Your Money
- Checkbook Control
- Asset Protection
- Borrow up to $50,000 Tax Free
- Limited Custodial Fees
- True Diversification – Lots of Investment Choices
- Stocks and Mutual Funds
- Real Estate
- Financial Paper
- Private Businesses
. . . and there are many more benefits (see them below)
Why You Need to Take Control
Most employers today offer a 401K plan. But employees often complain that their investment choices are limited to only a few mutual funds and perhaps a low-paying fixed account. IRAs offered by bank and brokerage firms may offer a few more choices, but seldom offer more categories of investment. You are stuck with the choices they sell – usually stocks, bonds, and mutual funds. It is not the IRS, but the custodian that limits your investment choices. The following are just some of the investment categories allowed under the IRS rules:
Real Estate
Financial Paper
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Businesses
The Financial Markets
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Financing Real Estate Purchases in Your IRA or 401K
Don’t ask your banker or broker if you can borrow money from your IRA or 401K because the answer will be a resounding NO! But, we can show you a strategy where you can borrow up to 80% loan-to-value on real estate purchased in your IRA or 401K using a NON-RECOURSE LOAN. This non-recourse loan allows your IRA or 401K to borrow the funds without tying up your borrowing power.
Who Can have a Turbo-Charged Solo 401K Plan?
You can if you are a self employed with no employees. That includes Sole Proprietors, Partnerships, S-Corps, C-Corps, LLC’s, and small family businesses. If you get 1099 wages, you are eligible.
You can also have a solo 401K plan if you have a part-time job in addition to your fulltime job. You cannot have any fulltime regular employees other than your spouse and in certain cases your children.
If you have a company with hundreds of employees, we can help you navigate through the maze of qualified retirement plans available to you. If you wish to self-direct your retirement plan assets, or allow your employees to self-direct, you are allowed to self-direct any type of qualified employer sponsored retirement plan such as: 401K plans, Profit Sharing Plans, Defined Benefit Pension Plans, and more.
If your plan is setup properly you can have part-time or occasional employees as long as they do not work more than 1000 hours in a twelve month period.
NO CUSTODIAN REQUIRED
One of the best benefits of the 401K is that it does not require the participant to hire a bank, custodian, or trust company to serve as trustee. This flexibility allows the participant to serve the role as trustee. This means that all assets of the 401K trust are under the sole authority of the trustee of the plan. Any transaction that the 401K trust enters into is entered into by the trustee. This simplification eliminates the cost and delays of IRA custodians and or LLC formation.
As Trustees of your employee’s plan or your own Solo 401K plan, you carry fiduciary responsibility that requires you to allow for diversification of plan assets, whether directed by you, the Trustees, or by the individual employee.
The IRA vs. the Personal 401K
Surprisingly, the 401K is not limited only to large corporations. Since 2001, a personal 401K has been available to individuals (sole proprietors, LLCs, small corporations) where there are no employees other than a spouse. In almost all categories, the features of the 401K top that of the IRA.
Annual Maximum Contributions (2009): IRA $6,000 401K $52,000
Minimum Contribution: Neither plan has a minimum annual contribution. This allows you to reduce or eliminate contributions in an off year and pour it on (in your 401K) – in a good income year.
Roth Feature: The Roth 401K can be structured to allow both pre-tax as well as Roth contributions within the same plan. Remember, Roth distributions are tax-free!
Taxation on Real Estate Profits: Unlike the IRA, leveraged real estate profits in your 401K are not subject to current taxation. (Although it may not be practical, it’s possible to eliminate the taxation in an IRA by using a 1031 exchange.)
Asset Protection: Unlike the traditional IRA, your 401K can protect you from predatory creditors and lawsuits.
Cash Availability: Unlike the IRA, you can borrow (up to $50,000) from your 401K (and pay interest to yourself!)
Participant Qualification: Unlike the Roth IRA, the 401K has no personal income ceiling to limit participation
We can provide you with Self-Directed Retirement Solutions combining the best of both worlds: The flexibility to invest when, where and how you choose, along with 100% checkbook control. Checkbook control – Yes, you can be in charge!
SOUNDS TOO GOOD TO BE TRUE?
That’s only because these options aren’t well-known. The San Francisco Chronicle put it best when they said, “The reason you haven’t heard about them [these investment alternatives] is that there is little profit incentive for financial institutions, which primarily sell stocks and bonds to IRA accounts.” [Source: San Francisco Chronicle, January 6, 2003]
If you have questions or would simply like us to show you how to set up your own “turbo-charged” self-directed retirement account with all the advantages and benefits mentioned above, please fill out the form below.
If you have questions or would like to set up a self directed IRA / 401K program to purchase real estate or other investments, please fill out the form below.
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