How to Buy Real Estate with your IRA or Retirement Plan Funds

Real Estate Sales Representative with Long Realty Company



How to Buy Real Estate with your IRA or Retirement Plan Funds


What a year 2009 is turning out to be! A new president, economic challenges, some big corporations closing their doors, and the stock market debacle...Isn't it time for a glimmer of hope? Well, that hope is here in the form of real estate.


With the economic downturn, there are foreclosed homes and depressed real estate prices everywhere you look, which has created opportunity with enormous upside. In fact, many houses can now be purchased for 25% or less of their recent value!


Individuals with liquid funds are already purchasing these properties in droves. But what is you don't have liquid funds? Then use your IRA or retirement plan funds!


Benefits of Purchasing Real Estate in your Retirement Plan


Your money grows three ways while owning real estate in your retirement plan:

  1. Through the increase of the value of the home appreciation
  2. Through the accumulation of rental income
  3. Through tax-free growth


How Buying Real Estate with your IRA or Retirement Plan Fund Works


Purchasing real estate in an IRA has been allowed for over 30 years under the ERISA Act of 1974. Most people don't know that they can do this because the brokerage houses typically earn fees on commissions or assets under the management, and don't want to offer Real Estate IRA's because they can't make money off of them.


Regardless, Real Estate IRA's allow you to purchase real estate with your retirement money, and currently constitute about 3% of retirement plan holdings.


Because they are retirement plan, Real Estate IRA's must be set up with a qualified administrator and abide by a few simple rules (see a list of recommended administrators, and links for the requirements, at ( -Estate-In-An-IRA.asp) or (


How to Get Started


Below are a few simple steps to get started:


  1. Read and Research. Make sure you understand the rules and requirements of a Real Estate IRA. You'll have to set up an account with a qualified administrator, not commingle funds, and abide by a few other rules. You can use the above website to find a qualified administrator.
  2. Find the Right Properties. Don't just buy houses because they are cheap. Make sure you have a plan as to where you want to buy, why you want to buy there, and whether or not you will rent the properties. Use your Realtor for guidance.
  3. Know your Personal Temperament. You'll not only have to spend tine selecting and closing on properties, but depending on how many you purchase and for what reason, may want to rent out your new properties. Make sure you know your requirements and capabilities.

Richard Lecinski

Long Realty Company



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