Did you know your IRA can purchase real estate? Since 1975, IRAs and 401(k) plans have been afforded the ability to purchase real estate, helping knowledgeable investors see significant change in their retirement wealth.

By establishing a Midland self-directed IRA, clients can combine their knowledge and expertise of the real estate market with the tax advantaged growth of their retirement plan, creating the ultimate wealth building machine.

• Single Family and Multi-Unit Homes
• Apartment Buildings
• Co-ops
• Condominiums
• Commercial Property
• Improved or unimproved land

In order to maintain the tax advantaged status of the IRA, clients must adhere to IRS rules on prohibited transactions and disqualified persons.

Funding the Purchase

Cash – In this scenario the IRA pays cash for the entire property. The property is titled to the IRA and all income and expenses must flow through the IRA.

Partnering – IRAs can purchase fractional ownership in property. Ownership interest is determined on the pro-rata amount of the investment purchased by the IRA. All income and expense must flow through the IRA in the same rate basis.

Financing – An IRA can purchase real estate with a mortgage as long as the loan is non-recourse, which means there is no personal guarantee to repay the debt by the IRA owner, or other disqualified persons. Repayment of the underlying debt must come from the retirement plan. Taking on debt in the IRA may subject the plan to Unrelated Debt Financed Income.

5 Easy Steps to Buying Real Estate in your IRA