Joe Capote – Certified Investment Agent Specialist Expert in Real Estate Investments and Properties

In 2010, 54% of American workers had less than $25,000 saved for retirment, and 24% reported postponing their retirement date due to lack of sufficient savings. Only 46% have determined how much savings they will need. It has been estimated that a significant proportion of those nearing retirement will run out of funds.

As a Certified Investment Agent Specialist, I understand that investing in real estate is one possible way to increase the rate of return on a smaller investment for their retirement through leverage and cash flow.  Increased cash flow for savings is one method of increasing a retirment fund. Leveraging retirment funds for greater return on invesment is another.

Another option for retirment investing in real estate is the self-directed IRA (SDIRA). A SDIRA allows investors to specifically choose the types of investments for their retirment, including real estate. The benefit of the SDIRA is having control over your financial future, AND being able to invest with tax deferred income.

The main difference between a tradtional IRA and a SD IRA is that while both are managed by the investor, only the SD IRA gives the investor the full range of investment choices allowed by the IRS, including real estate.

Here are the simple, straightforward facts about SD IRAs:

• A SD IRA is an individual retirement account through which yuo make the investment decisions.
• You can invest in anything using an SD IRA, except life insurance, S-corporations and collectibles.
• You can roll over funds from your ther retirment accounts into an SD IRA.
• You can use your SD IRA to purchase real estate.
• The SD IRA acts as a trust when it purchases real estate: all funds must go through the SD IRA.
• A SD IRA usually protects your retirment funds as a traditional IRA would.
• Profits from properties purchases bya an SD IRA ususally have the same exemptions a regular IRA has.
• The same rules gnerally apply to SD IRAs as to regular IRAs.
• There are restrictions to buying real estate with a SD IRA

Is the SD IRA a possible way for investors to leverage retirement savings to invest in real estate? Yes. Am I advising anybody to run out and roll over all your funds into an SD IRA? No, I cannot advise anybody to do that.

Here comes the disclaimer: This article is intended to explain what a SD IRA is, but I do not give specific advice as to whether or not investors should use their SD IRA’s to purchase real estate, nor am I advising investors as to how to set up SD IRAs using other funds. It is important to remember that I am a real estate agent, and not a financial advisor. I strongly encourage you seek professional advice from an accountant or an SD IRA representative for more specific information as to how an SD IRA might benefit you.

Here is a good resource on SD IRA administration.

Real estate investments in San Mateo County is what I do. If you would like to learn more or talk to a SD IRA representative that is part of my team, Contact me for more information.