Entrust New Direction is proud to be a supporting member of Investors Realty Resource. We hope that the information you find here will help you get started finding creative ways to finance your investment purchases. We welcome your questions and inquiries, call 
303-546-7930
to speak directly with one of our office experts.
Getting Started - The Self-Directed IRA as an Investment Tool
Don't forget to download your free Guide to the Self-Directed IRA as a Wealth-Building Tool by entering your email in the space provided at the left-top of this page. We value and protect your contact information, read our privacy policy for full details. Purchasing Investment Property with IRA or 401k funds has never been easier.
It has always been possible to purchase Real Estate with an IRA. What has not been easy up until now is finding a custodian/administrator who was willing to allow this type of investment. That is what we do. Entrust New Direction IRA will allow you to select your real estate purchase and fund the purchase money at closing though your IRA or Qualified Plan.
Reasons to consider real estate?
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It's a tangible asset, you can see it and touch it
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It can be a leveraged investment if you choose
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Potential cash stream as well as market appreciation (for income properties)
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You have control
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You always know where it is
We offer the best education on Self-Direction and retirement plans and it's available free on the web. Why? Because we want to be your administrator for your new Self-Directed IRA or Qualified Plan.
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Top 5 Pitfalls of Purchasing Real Estate in an IRA or 401k
When deciding to purchase real estate as a retirement plan investment, there are some important guidelines to be aware of to ensure that you avoid losing special tax treatment or paying penalties for an error.
- Do not personally accept rent money or other income from the IRA's property. All income flows into the IRA and all expenses need to be paid from the IRA account.
- You may not personally use the property. The IRS does not allow you to personally benefit from your retirement plan investments until distributed at retirement age. Personal use of the IRA's investment property is a violation of the IRS rules.
- All contracts should be in the name of your IRA, not your personal name. The property is owned by the IRA and this should be reflected in all legal documents from the earnest money payment to the purchasing contract to the contract with the lawn company. Contact our office for specific details on titling.
- You cannot purchase the IRA's investment property from yourself. Similarly, you cannot sell the IRA's investment property to yourself. This scenario constitutes self dealing, which is not permitted.
- You cannot remodel the property for free or for pay. Anything that adds value to the property such as an extensive renovation or an addition should be performed by a paid third party company at market rate.
Remember the primary concern in avoiding these pitfalls is keeping your account tax-deferred (or tax-free if a Roth). There are other rules which our office or your real estate broker can help you with when your IRA buys real estate.
Real estate is the number one investment held in self-directed IRAs, maybe it's the right one for yours.
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Basics of IRA Lending and Borrowing
Did you know that your IRA can both a borrower and a lender be? The number of banks willing to lend to IRAs purchasing income producing properties continues to grow. Contact our office for some lenders that have made these loans in the past by calling 303-546-7930 or email info@ndira.com.
General Rules Regarding Lending IRA Funds to an Outside Party
If you are considering loaning the funds in your IRA,
here are some general rules to keep in mind:
- The borrower cannot be a disqualified person.
(Disqualified persons include the IRA holder, their
spouse, parents, children or their spouses, some
business partners or any entity majority owned or
controlled by disqualified persons.) - The note must be a real economic transaction.
(No zero percent notes or gifts.) - Reciprocal notes, where the IRA lends money to an individual who then lends the money back to you are strictly prohibited by the IRS.
- If the note is secured by real estate, you (and other disqualified persons) may not use or do any work on the property.
Download our special report entitled "Using Self-Directed IRAs as a Wealth Building Tool" and find out how to take control today. Just enter your email in the form to the left and get your FREE report within minutes!
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