Commercial real estate is quite costly when compared to residential real estate. However, these assets present solid passive investments options when the right property is acquired.

How it Works

  • Commercial property includes retail, office buildings, and land.
  • Profits are generated through rental income or proceeds from the sale of the property.
  • Rental income can be gained by little effort of the IRA owner as maintenance and management should be performed by a third party.
  • All income and expenses flow directly into and out of the IRA.
  • Commercial property is expensive, but capital can be pooled by partnering your IRA funds with personal funds and/or with another person or entity.
  • Non-recourse loans can also be acquired to help finance the purchase.
  • Unrelated business income tax (UBIT) and/or unrelated debt financed income (UDFI) tax may be applicable if a loan is used for the purchase of these assets.
  • As with all self-directed investments, due diligence is critical to avoid fraud and to ensure the potential for returns on your investment.

If you are interested in learning more, contact Midland IRA. We can explain the details and help you get started investing in commercial real estate today.