| The pursuit for a secure retirement has become | | | | However, it is not something that should be |
| progressively more difficult. Given the uncertainty | | | | undertaken lightly nor should investors, unless |
| of today's stock market in light of corporate | | | | they are experts in their own right in the tax and |
| governance failure on a massive scale with the | | | | investment laws, undertake for themselves, due |
| Enron and WorldCom scandals, the poor recovery | | | | to the strict and sometimes complex legislation |
| of investment because of the panic selling of | | | | imposed through the IRS. Otherwise they may |
| stocks and bonds that have since wobbled their | | | | find themselves exposed to penalties and taxes. |
| way back up, without bringing investors' funds | | | | Just as you choose a traditional financial advisor |
| with them and the political and economic | | | | when looking into stock and mutual fund |
| uncertainty generated by the 'war against | | | | investments you should also look a properly |
| terrorism', it is not surprising that investors are | | | | qualified self-directed IRA advisor.First, traditional |
| looking for alternative choices to invest their | | | | financial advisors are not usually best placed to |
| retirement funds.These days, many investors | | | | give advice on real estate investment. While they |
| prefer to have a wider range of choices and the | | | | have a good understanding of stocks and shares, |
| ability to diversify their retirement fund | | | | they have very little experience of the real estate |
| investments outside the poorly performing, so | | | | market. Instead, you should look for an advisor |
| called conservative choices of stocks and bonds, | | | | who can help you structure IRA and real estate |
| and into other areas. This has resulted in a | | | | entities, evaluate investment opportunities and |
| massive expansion in the market for self-directed | | | | avoid infringing self directed IRA rules in setting up |
| IRAs.Oftentimes the phrase self-directed IRA is | | | | investments.Your IRA advisor will need to have |
| tossed around by prominent investment firms and | | | | extensive knowledge of self-directed rules and |
| is only narrowly understood by the majority IRA | | | | the expertise to implement complex deals plus a |
| investors. Unbeknownst to many self directed | | | | good strong background in real estate and real |
| IRA investors many investment firms would have | | | | estate development. Because, while an |
| them believe that the term self-directed IRA only | | | | investment in a single property is probably no |
| refers to the ability to choose which stocks, | | | | more difficult than buying your own home, using |
| bonds and mutual funds they can buy. | | | | private funds, especially self-directed IRA funds to |
| Fortunately, there is more to this narrative.In | | | | invest in real estate developments, real estate |
| contrast, a growing culture of investors is | | | | lots, purchasing apartment communities and other |
| educating themselves on their investment | | | | larger scale real estate investments is something |
| alternatives and they are now starting to invest in | | | | that most people don't have the requisite |
| real estate and other non-traditional assets. | | | | knowledge to undertake.A good example is |
| Indeed, any legitimate business investment is open | | | | rehabilitating individual residential real estate. If you |
| to them both as single investors and undertaking | | | | have never undertaken this kind of work, it can |
| group investments. If you know what you are | | | | be a very risky business. Without substantial |
| doing or have expert advice in the area, it is | | | | amount of real estate investment experience, |
| possible even with low cash reserves to diversify | | | | you can easily lose your IRA retirement money. |
| retirement portfolios and in particular to capitalize | | | | It is very important to have an appropriate real |
| on the growing real estate industry for | | | | estate advisor who understands where to find to |
| example.Most conventional financial planners don't | | | | good real estate opportunities and knows what a |
| offer truly self directed IRA plans since they may | | | | realistic real estate investment and realistic rate of |
| operate under plan documents which only allow | | | | return is and how to appropriately manage a real |
| investors to invest in stocks, bonds and mutual | | | | estate rehabilitation or real estate development |
| funds. Nor is it in their interest to do so. Their | | | | project from start to finish. Mainstream |
| commission structures are set up to favor | | | | do-it-yourself TV shows showing rehabilitation |
| investment in the financial markets whether this is | | | | projects are a case in point as the majority of |
| in the best interest of the investor or not. Which | | | | people go over budget during the rehabilitation and |
| means their advice is hardly objective.Of course, | | | | the majority of times lose money. Don't let this |
| this is not advising that investors completely | | | | happen to your retirement.Ability to offer advice |
| abandon stock market offerings, merely that | | | | has to be accompanied by permissibility to offer |
| they do not keep all their eggs in one basket. Just | | | | advice. A self directed IRA custodian (as opposed |
| as stock markets rise and fall so can real estate | | | | to a self directed IRA advisor) may not offer any |
| prices. But diversifying your investments minimizes | | | | investment advice to an investor. It is prohibited. |
| the risk on your returns.Procuring real estate for | | | | They must maintain a neutral position and can |
| investment purposes with an IRA provides | | | | only give you advice on the IRS regulations and |
| several favorable tax breaks. A Roth IRA allows | | | | their firm's investment policies. Therefore, an IRA |
| the investor to benefit from tax deferral while it | | | | custodian cannot offer advice on real estate |
| is growing and to be free from tax on distribution | | | | transactions, which is a good thing because their |
| in contrast to a traditional IRA which is taxed at | | | | primary purpose is to hold account holders |
| time of distribution. Nor is there a minimum | | | | monies.In short, real estate investment is a |
| distribution and investors can also continue to pay | | | | realistic option for most investors looking to |
| into Roth IRAs which can be of benefit if they | | | | diversify their holdings, but the key to benefiting |
| intend to pass them to their heirs (which can be | | | | from it is getting the right advice from the right |
| done without taxation). In addition, unlike 1031 | | | | source.Joshua Geary with Asset Exchange |
| exchanges, there are no specified investment | | | | Strategies is an avid writer, business strategist |
| timeframes or requirements to procure 'like kind' | | | | and online marketing consultant. For more |
| investments. Finally, capital gains tax is not applied | | | | information on how you can get checkbook |
| since taxation does not occur until distribution.All of | | | | control of your IRA and turn your self directed |
| these factors contribute to making real estate | | | | IRA into a wealth magnet visit the link. |
| investment with IRA funds very tempting. | | | | |