IRA Real Estate Loans
The IRA Real Estate Loan will not be found at your neighborhood bank but they absolutely do exist. These loans provide a greater opportunity to diversify your retirement portfolio.
IRA real estate investments provide 3 opportunities for growth in your retirement portfolio.
- Cash Flow from the rents,
- Appreciation of the property, and
- Investing your rents in other investment options.
The stock market historically has many ups and downs and the value of your retirement portfolio can change very quickly. This is not to suggest that the real estate market doesn't have a cycle or ups and downs. However, the trend in real estate values has typically been an upward trend. Properties held in self directed IRA or 401(K) products are all investment properties. So even if the real estate market takes another down turn, your properties will still be providing your retirement account with cash flow.
From the appreciation standpoint, now is an excellent time to look at real estate for your retirement portfolio as the real estate market already took a severe correction and appears to already have hit bottom.
The exciting thing about the IRA Real Estate Loan product is that it allows you to combine your retirement funds with a non-recourse loan to purchase multiple properties and diversify your retirement portfolio further. This loan does not limit the investor to a maximum of 4 properties total which many major banks are doing. Additionally, purchasing real estate with retirement funds does not require income qualifying because everything is handled by the retirement account.
Unlike your conventional investment property loan, the IRA Real Estate Loan is a commercial loan product. What does this means for the individual looking to diversify his/her retirement portfolio?
Approvals for a commercial loan are underwritten very differently from a conventional loan. Underwriters for conventional loans review your credit worthiness, income, assets and debts to determine if you qualify for the loan. The IRA Real Estate investment underwriter looks at the property to determine if the property is a good investment, i.e does the property generate sufficient income (cash flow) to make it a good investment that will make money for your retirement account. If the answer is no, the loan will not be funded. The idea is to take the emotion out of the investment and make sure that each property purchased stands on its own in helping to grow your retirement portfolio.
And if you don't have enough funds in your self-directed IRA accounts to get started, you can join with family, friends, etc., and begin by purchasing property together.
Because these loans are not conventional real estate loans, I can assist you in purchasing property nationwide.
If you have questions, please complete the Got a Question? form below. Or call our office at 866-822-7477 to schedule a phone or in-person consultation.
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