4 Professionals You Need To Negotiate a Successful Self-Directed IRA Real Estate Investment
If you’ve purchased a house, or any kind of property, you know how complicated and daunting the process can be. The real estate market has been particularly tough to navigate the last couple of years, making some heads spin.
It can be even more complicated when you’re purchasing an investment property using your self-directed IRA. Buying real estate for investment is a fantastic way to grow your portfolio, but many people get intimidated by all the rules and regulations.
After all, buying a property for personal use is a headache all on its own. Once you add in the tax and legal aspects of purchasing a property for investment purposes, you add several more levels of complexity. It’s enough to make a lot of people walk away. But it can also be a rewarding experience that helps you take control of your future. You’ll be successful when you have the right people supporting you.
This is why you need a team behind you to make sure your real estate investment purchase is successful and profitable. Having a team that knows how to purchase an investment property will not only take away a lot of the stress and confusion but will also give you the best chance to fully capitalize on your investment.
In the end, that’s what it’s all about. When you’re buying real estate for investment, your goal is to grow your portfolio and increase your capital. You want people supporting you who understand that goal and will help you navigate the road to get there successfully without any extra hassle or headaches on your part.
There are four key professionals you want in your corner when you’re planning on buying real estate for investment. Without them, you’ll likely end up confused and overwhelmed. You may even end up making a prohibited transaction which could hurt you at tax time. Let’s take a look at who these professionals are and how they can support you to successfully navigate a real estate investment purchase.
1. A Knowledgeable Real Estate Agent
Any time you’re buying property, you want a real estate agent that knows the ins and outs of the market. This is even more true when you’re using your SD-IRA to purchase an investment property. A real estate agent for investors will be one of the core members of your team, and you want someone familiar with SD-IRAs to help you find the right properties for your investment goals.
When you’re searching for properties, you want someone who is looking at everything through an investment lens rather than a personal lens. A real estate agent for investors will have a good idea of what properties will work for your portfolio and which ones won’t. This is why a knowledgeable real estate agent is essential to negotiating a successful real estate investment.
2. A Prudent Lender
Unless you have the cash to purchase the property outright, you’ll need to work with a lender. Investing in real estate through your SD-IRA requires you to obtain a non-recourse loan. Unlike other loans, non-recourse loans ensure that your IRA is the only asset at risk should you default on your loan. The lender cannot come after your other assets.
Because there is often more risk involved for the lender with non-recourse loans, you’ll need to satisfy more requirements to secure your loan such as a higher interest rate.
Not every lender offers non-recourse loans. You’ll need to find a bank or private lender to complete this type of transaction.
3. A Savvy Attorney
One of the most important members of your team will be a savvy attorney who understands how to purchase an investment property. Purchasing any property involves many contracts and signatures, but it’s even more important to have someone who can help you navigate the legal side of things when you’re buying real estate for investment.
Unless you have a background in property law, you’ll need someone who can translate all the legal language and ensure the contracts are in order. You’ll also want an investment-minded attorney in case anything goes wrong or there are issues with buying the property for investment.
4. A Perceptive SD-IRA Administrator
There are a lot of rules and regulations when it comes to your self-directed IRA. You want to make absolutely sure you’re always in compliance. This can be tricky, though, because the IRS updates and changes the policies. This is where you need a perceptive SD-IRA administrator in your corner.
An administrator for your self-directed IRA will be able to keep on top of any policy changes that could impact your investments. They will also be able to advise you on exactly how to purchase an investment property so you’re in compliance with IRS policies that may affect your portfolio.
This work requires an eye for detail and diligent record-keeping to make sure your investments are profitable.
Other Professionals On Your Team
Once you’ve negotiated a successful real estate investment and closed the sale, it’s time to start thinking about other professionals you’ll need to help you manage your investment.
When purchasing an investment property in your SD-IRA, you’re not allowed to perform any of the work yourself, there’s no “sweat equity” allowed. This is where a reputable contractor comes into play. They will ensure your property flip gets completed accurately and in a timely manner.
If you’re planning on purchasing and holding your property in order to rent it out, you’ll need a trustworthy property management company in your corner to help you with those middle-of-the-night plumbing phone calls. Just like you’re not allowed to physically help with a property flip, you’re not allowed to perform maintenance.
Invest in Real Estate With Chicago Trust Administration Services
Buying real estate for investment is exciting and can help you prepare for your future. Using your self-directed IRA to invest in property can help to increase the value of your investments, but it can also be complicated. That’s why you need a team of professionals supporting you and guiding you to negotiate a successful real estate investment.
At Chicago Trust Administration Services, we know the ins and outs of buying real estate for investment. We provide the expertise to make sure your self-directed IRA is in compliance and you don’t inadvertently make a prohibited transaction that can cause serious legal issues.
We’re in your corner and here to support you as you negotiate a successful real estate investment purchase. Whether it’s your first time buying real estate for investment or your hundredth, we have the expertise to help you take control of your future through real estate investing with your SD-IRA.
To see how we can help, we invite you to schedule a complimentary meeting with us by calling 312-869-9394 or emailing steve@ctasira.com.
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*The content and opinions in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
**CTAS professionals are not financial advisors and cannot provide advice or recommendations regarding specific investment decisions.