This past week I received several calls from my investors. Each wanted to know who had the best interest rates and lowest down payment requirements. These questions are on the minds of many and they hearken, in an uncomfortable way, to the days when everyone was offering stated income loans and other mortgage products with little money down. As an agent I am quick to warn that every investment needs to have a modicum of potential equity and a minimum of risk.
Still... it's a good question. Which lender offers the best deal? Surprisingly- the answer could be the Bank of You. More about that in a minute.
If someone has a great credit score, available cash and little debt- it's only natural to want to find the vehicle that offers low rates and little down. The investors that have been asking me this have something in common. They're looking for an investment vehicle which will outperform their stocks and mutual funds. They're looking at real estate and are concluding that homes that cash flow now will help pay for themselves more quickly than those that don't. Such properties should also provide an equity jump when the market improves. Since cash is king- the buyers would like to preserve as much of it as they can and use other people's money- especially if the financing is advantageous.
Fortunately, such investors don't need to commit their liquid cash. Instead, they may want to look at funding with a self-directed IRA. This plan is not for everyone... it's best for those who have a good handle on a) the market and b) the investment(s) that the IRA will fund. In essence, they will be using their IRA as a lending vehicle ... and their investment property will be set up like a trust. This offers the investor a trustworthy source of funds (one's self), and the power to impact the value of the personal investment portfolio. Before embarking on this possibility, the investor will want to make sure the trust is set up correctly and that no rules are broken that would turn the tax-deferred investment into a non-retirement asset.
To make this happen, I work with licensed individuals who are able to assist people in transferring their investments to real estate property portfolios. Again let me reiterate- these are retirement accounts and, as with any investment- proper due diligence is essential to being able to ensure that the process is done in a manner that the IRS will be able to deem acceptable.
If you're interested, please call (480.292.0600) or email: chuck@azVest.com. I can help you find the properties- my colleagues will help you protect and enrich your retirement funds.
Photo Credit: "Chasing the Markets" by T. Al Nakib