| Maximizing Your Options: Self-Directed
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| | When using a self-directed IRA to invest
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| IRAs and Real Estate Investing The
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| | in real estate, you select the property,
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| perception of retirement savings is that
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| | negotiate the price, and find the lending
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| the money has to be invested in
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| | institution, while an escrow account is
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| traditional avenues like CDs, bonds,
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| | created in the IRA trustee's name and the
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| stocks, and funds. However, there are a
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| | IRA trustee performs the actual
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| large number of non-traditional
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| | transaction. The property is then held as
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| investment options that are available
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| | part of the account's assets. This is
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| through an increasingly popular type of
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| | analogous to picking a stock with great
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| retirement account, called a
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| | dividends and instructing your IRA
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| self-directed IRA. Self-directed IRAs let
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| | advisor to purchase a certain number of
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| the individual investor decide where to
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| | shares.
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| invest their money based on their own
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| | What an IRA Trustee Means The structure
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| expertise - and one of the most common
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| | of self-directed IRAs provides a balance
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| investments is in the opportunity-rich
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| | between independent real estate
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| real market.
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| | investment control and experienced
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| How Real Estate Investing through an IRA
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| | investment professionals. For any
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| Works Individual retirement accounts
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| | self-directed IRA, there has to be a
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| (IRAs) make up more than $2 trillion of
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| | qualified custodian, or trustee, for the
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| investment assets, about 20% of the total
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| | account. The trustee understands all
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| assets in retirement plans. While about
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| | legal and tax prohibitions on
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| 98% of these IRAs are invested in
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| | investments, manages the actual
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| traditional areas like mutual funds and
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| | retirement account, handles
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| stocks, a large number of IRA holders are
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| | administrative tasks and carries out all
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| switching to self-directed IRAs, which
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| | of the actual transactions. The trustee
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| let them decide where to invest their
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| | also offers professional advice as you
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| money. In fact, the amount of assets held
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| | plan your investment strategy, which is
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| self-directed IRAs has more than doubled
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| | particularly important for long-term
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| in the last five years, representing tens
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| | investing in real estate. All account
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| of billions of dollars in assets.
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| | funds are held in an escrow account
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| Most self-directed IRA funds are spent in
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| | managed by the trustee.
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| real estate, and virtually any kind of
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| | The self-directed IRA trustee has an
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| property is allowed for investment: land,
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| | integral role in whether you successfully
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| commercial properties, office buildings,
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| | invest in real estate with your IRA. Even
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| shopping and retail centers, single
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| | major investment companies may not have
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| family homes, rental units, condos and
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| | experience with self-directed IRAs or
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| multi-tenant buildings. The only limit
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| | real estate investing, and knowledge
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| for real estate investments is that they
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| | matters. For example, the profits from a
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| cannot directly benefit the account
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| | self-directed IRA may be subject to
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| holder or a near relative (such as buying
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| | unrelated business income taxes (UBTI)
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| an investment property and then using it
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| | because of the nature of the investment,
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| as your primary residence).
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| | while depreciation and expenses for the
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| There are three different ways that IRA
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| | property are calculated differently.
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| funds can be invested in real estate:
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| | (This is in sections 511-514 of the IRS
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| • By purchasing the property outright.
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| | tax code.) An experienced IRA trustee
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| In this case, the assets in the IRA are
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| | will know all the liabilities and
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| used to buy the property entirely. •
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| | incentives available.
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| By supplying a deposit or down payment.
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| | Most importantly, ask about investment
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| The IRA fund can be leveraged to get a
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| | goals and options; get involved and be
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| mortgage on a property, with the property
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| | willing to take control of your
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| used as collateral. This minimizes
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| | investments. The most important asset the
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| personal risk and can greatly increase
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| | IRA trustee offers is strategic,
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| the overall value of your investment.
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| | experienced planning. Trust
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| • By buying a property as part of an
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| | Administration Services specializes in
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| investment group. As long as the property
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| | IRA-funded real estate investing, along
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| deed shows your undivided interest in the
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| | with other self-directed IRA investment
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| property, it's available to your
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| | plans, with billions of dollars in
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| self-directed IRA for investment.
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| | assets.
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