Many people I talk to are not aware that they can use retirement funds for Real Estate Investing.
Hi. This is Devin Elder, and I wanted to talk today about investing in real estate with retirement funds. I wanted to make this video because a lot of people I talk to aren’t aware that they can use their retirement savings to fund real estate projects.
While I’m not a CPA or an attorney, and this is not financial advice specifically, I just want to make people aware that you can use something called a self-directed IRA. What this means is you have control over that individual retirement account to put it into real estate projects. You could fund somebody’s … if there’s a real estate investor that’s got a flip project that they’re going to do, or they’re going to use capital for a short term to renovate a house and then refinance it and have it as a rental, or somebody’s putting together an apartment syndication where there’s a sponsor getting a lot of different investors into buying an apartment complex and cash flowing that. There’s a lot of different avenues that real estate investors raise capital for or through, and a lot of people just don’t know that they can use their own retirement funds for that.
There are two companies that I want to recommend, one that I use, and then one that friends of mine use and investors of mine use. I’ve gotten good feedback on both. The first is Equity Trust. You can look them up and set up a self-directed IRA with them. The second is Quest IRA. Both of these companies have really low fees and good support from what I’ve seen on Equity Trust and then what I’ve heard from Quest IRA. In fact, I’m going to look into opening a Quest IRA account myself based on the feedback from a friend of mine that recently invested in one of my apartment complex investments.
You can take those retirement funds, use it to invest in a property, and then all the proceeds and profit come back into the retirement account. You can’t touch it. That’s part of the rules, right? You can’t invest in your own real estate projects, it’s got to be somebody else’s, and you can’t touch it yourself, so the money goes out from the retirement account, and it comes back into the retirement account, but this is nice, in a way, because you don’t need that money. You don’t need that cash flow. Assuming you’re under the retirement age, you’re not going to be able to touch it anyway without heavy penalties, but you can invest in real estate with a self-directed IRA. Let that money grow tax-free. Let the proceeds come back to the retirement account and, over a period of years, rinse and repeat that.
Invest in a project. It pays off in six months, or two years, or five years later, whatever the project looks like, and that nest egg is going to grow tax-free, which is really exciting because, A, it’s growing and compounding and, B, you’re not doing the work. You can go to work at your day job or do whatever else you focus on while there’s a real estate investor operator out there running that project and making those gains for you.
Quest IRA is one. Equity Trust IRA is another. Both of those companies, while I’m not affiliated with them or anything other than being a customer, they both, I’ve found, have really good education programs for investors how to get your money to work in real estate investments instead of it being a savings account or in the stock market or things like that. I hope that helps and gives you some avenues to explore with your retirement funds.