How to Double The Buying Power of Your Retirement Funds - Seriously
Posted by John Sheflin on Mon, May 11, 2009
Behold the lever, first described in 260 B.C. (or so the historians say) by Greek mathemetician Archimedes.
The lever has helped people accomplish more than they thought possible. I imagine the first time a lever was used, it seemed magical.
Behold the lever, 2009:
Using a self-directed IRA, you can more than double your buying power if you use leverage to purchase real estate. More and more banks are learning about self-directed IRAs and offering loans for purchasing real estate. Because the loans are non-recourse (only secured by the asset), a loan to a self-directed IRA is the most secure option for a bank (and for the IRA).
Of course, some restrictions apply:
1) The loan must be non-recourse, which means your personal credit, and the rest of your IRA does not apply to the value of the loan - only the property does. In the case of defaulting on the loan, the bank takes over the real estate.
2) In most cases, the property must be income-producing.
The down payment is usually in the neighborhood of 40% of the value of the property. This means you more than double your buying power, which means you could increase the value of your retirement money (or make up for stock losses) faster.
Contact us if you have questions or view this helpful FAQ.