How to use your real estate experience to save for retirement



You have built your career helping your clients create long-term wealth through real estate. What if you could use your knowledge to strengthen your financial future? With a self-directed IRA, you can do just that.

What is a self-directed IRA?

BUT Self-Directed IRA (SDIRA) it’s just an IRA. What sets it apart is access and control; and with SDIRA both are unlimited. Your investment options go beyond the typical stocks, bonds, and mutual funds offered by banks. Instead, you can diversify your retirement portfolio with alternative investments such as real estate.

Investing with SDIRA does not mean that you are also committed to a particular type of property. Popular options include developed or undeveloped land, single-family homes, commercial real estate, multi-family housing, or even mortgage bills. As with your clients, your real estate expertise is your greatest asset.

Choose the correct account type

Being a real estate agent means you have a good chance of being self-employed. In addition to basic necessities like taxes and health insurance, you are also responsible for your retirement planning. With SDIRA, you have the same control over this as you do with the rest of your small business.

There are a number of accounts that can suit your needs, each with their own tax benefits, contribution limits, and eligibility requirements. Traditional IRAs, Roth IRAs, SEPs, and SIMPLEs can be self-contained, so you can use them to invest in real estate and other alternative assets. To find out how they work and how they differ, check out our Accounts Guide.

How to invest in real estate with SDIRA

When you are self-managing, your hands-on experience becomes the backbone of your retirement strategy. And your SDIRA is the vessel that fulfills it. The process of buying a property with SDIRA is not much different from a standard transaction. However, there are some rules and regulations you must ensure that your account remains in good standing.

Here’s a quick overview of how it works:

  1. Open SDIRA… As mentioned, you can choose between several different types of accounts. Check with your tax advisor if you are unsure what is best for you.
  2. Top up your SDIRA by transfer, renewal or cash deposit. If you would like to transfer funds from an existing IRA or employer-sponsored plan, you can do so via Transfer or Renewal. You can also start by making cash contributions and increasing your account year after year. Find out more about the different funding methods here.
  3. Find the right property and define your buying strategy… Some popular options include direct buying, partnerships, leveraged funds, or through a limited liability company (LLC).
  4. Instruct your SDIRA provider to initiate a transaction… Make sure the title of the contract includes the name of your SDIRA as the purchaser. For example, “Entrust Group FBO (In Interest) [Client Name] [Account #123456]… »Upon completion of the contract, your provider will use your SDIRA funds to pay the deposit.
  5. Close escrow. At this time, you will send any remaining documents, such as a grant document, title deed or closing expense report, to your SDIRA provider. They will then send funds to complete the transaction.

Upon completion of these steps, the investment property becomes the property of your SDIRA. This means that any income and expenses related to real estate will go through your SDIRA; not your personal funds.

What to do next?

Learn more about the real estate investment process with SDIRA. Get a free copy of our 5 steps to investing in real estate guide today.


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