Housing Your Next Real Estate Investment in an IRA

I’ve spent most of my career overseeing the construction of multimillion-dollar apartment complexes, single-family dwellings and office property, as well as buying and selling raw land, commercial buildings and so on. Since 2004, the real estate portion of my business holdings has focused on investment, development, appraisal and consulting. I still regularly evaluate prospective deals and oversee the management and development of our current properties. Helping fill a need in the community and region at large has been a driving force behind my success and my investments.

Five years after starting my first real estate company, I co-founded what would become known as Kingdom Trust, an alternative asset custodian. I heard many stories of properties purchased by and held in retirement accounts, and after some intensive research on the legality and relative simplicity of investing with retirement funds, I decided to address a new need—one that could affect working Americans and potential investors throughout the country.

Kingdom Trust clients can hold virtually any investment in a Self-Directed IRA. This includes precious metals, private companies, loans, timber rights and other alternative investments as well as traditional investments like stocks, bonds and mutual funds. We specialize in the nontraditional space, though, with real estate being the most popular alternative investment.

As most real estate investors and agents know, real estate has historically been a stable investment that consistently appreciates in value. Unfortunately, only a small percentage of investors know how to invest in real estate with tax-advantaged retirement funds. Because of educational opportunities such as this publication, more real estate investors and agents are aware that this opportunity exists, but they remain undereducated on two key facts.

For starters, real estate investing within an IRA does not require a substantial amount of money. Yes, you can certainly invest in property with hundreds of thousands or even millions of dollars. But if you don’t have that kind of cash available in your retirement account, you can invest small amounts into options contracts or property tax liens. You may even invest in debt-financed property where your IRA merely covers the down payment and a non-recourse loan covers the remainder of the cost.

Secondly, investing in real estate with retirement funds is no more complex than investing in real estate with personal funds. The only differences are that the property has to be titled in the name of the retirement account and that all fees and income are paid from and to the account. Your custodian handles all payments out of the IRA to cover fees like property taxes, and any income like rent or lease payments must be paid to the IRA, not the account holder.

I encourage you to consider your options when it comes to investing using tax-advantaged funds. With a Self-Directed IRA, you have a variety of real estate-related investment options to help support your long-term retirement goals. So the next time you think realty, consider the opportunities that await you by using an IRA to house your next real estate investment.

  • Matt Jennings

    Matt Jennings is CEO and Co-Founder of Kingdom Trust, a leading alternative asset custodian. A Certified General Real Estate Appraiser and licensed agent, developer and entrepreneur, Jennings manages a multimillion-dollar portfolio and remains very active in all of his businesses, which include holdings in the real estate, investment and fishing industries. 888-753-6972 info@kingdomtrust.com www.kingdomtrust.com

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