Buy Deeply Discounted Cash Flow Real Estate in your Self Directed Retirement Plan

Everyone has heard about the exceptional values in the real estate marketplace represented by Bank Owned, "Real Estate Owned Properties" (REO). Banks which have foreclosed on properties are marketing them through retail channels that include Brokers and Agents that specialize in REO properties. These brokers and agents in particular are familiar with the processes and procedures used when dealing with the Asset Managers and Loan Servicers who control the sale of these deeply discounted properties. On a daily basis, investors are buying properties that yield very competitive cash on cash returns in California and many other states and there is the possibility of future appreciation over time on top of monthly returns.

Not everyone is aware that you can make Alternative Investments in a Self Directed Retirement Plan including the purchase of REO real estate for investment.

The process of making offers and having them accepted on REO properties is different from the traditional Owner Occupied Real Estate Residential Purchase and working with a Broker or Agent who is familiar with the process can make the difference between getting the property and not getting the property from the servicer/lender/bank that owns it.

The time frames and conditions for REO purchases make the possibility of an all cash offer using funds from a Self Directed IRA or other Self Directed Retirement Plan very attractive for investors and banks, since there are no financing contingencies. Asset managers love to see offers of this type and respond favorably when they know the deal will get done. If needed, a non-recourse loan can be used for properties over $100,000.00 in price. These loans do not use personal credit and are based on the cash flow of the property, but do require 6 months expenses to be available in the IRA after the earnest money and down payment are made.

When using a Third Party Administrator (TPA) for record keeping in the Self Directed Plan, the process and documentation used in a Real Estate purchase with IRA money is nearly identical to a personal purchase, except that all of the documentation is made out in the name of the Self Directed Plan and Title is held "For the Benefit Of" your IRA or other Self Directed Plan.

Needless to say, careful due diligence of the properties is important and the prospective buyer should consider paying for an inspection especially since REO properties are sold "As-Is". It is best to know if repairs are necessary, since the costs for repairs must come from assets in the plan or new contributions to the plan and not from personal assets of the IRA owner. You should also do careful calculations on the potential return on your real estate investment.

IRA and other Self Directed Plan owners can also combine funds from multiple plans and plan types to make real estate purchases as Tenants In Common or using specially constructed LLC's that are funded from plan assets. Before you can make any offers or buy any real estate, you need to open and fund a Self Directed Plan. When transferring assets from an orphan IRA or an old 401(k), 403(b) or TSA plan, you need to allow at least 4 weeks for the funds to transfer after opening an account with a truly self directed plan administrator or custodian. So if you are interested in a purchase at todays low prices, get started today.

If you are interested in learning more about this type of investing or participating in a webinar, send an email to lance@selfdirectioncentral.com