Why Real Estate Professionals Need to Know About Self-Directed IRAs and 1031 Exchanges
Real estate is one of the most common investments purchased inside of a self-directed IRA yet only a small percentage of Realtors® know about this opportunity. When an investor uses their IRA to purchase real estate, all of the rental income and sale proceeds from that property are deposited into their retirement account tax-free. This strategy is a tremendous opportunity for Realtors® to help them sell more real estate.
Purchasing real estate using a self-directed IRA isn’t just a strategy to defer taxes on investment real estate, it’s also an alternative source of funding that Realtors® can offer to their clients. Currently, there is over $5 trillion in IRAs, and according to recent projections that number is expected to exceed $8 trillion by 2017. Investors have the option to purchase 100 percent of the investment property inside of their IRA, or they can purchase a portion of the property by having their IRA partner up with another (or several) buyers. For example, they could purchase a percentage of the property personally and a percentage of the property with IRA funds. Moving forward, any income/expenses generated by the investment property would be split according to ownership percentages.
This is a great way for Realtors® to save a deal with an investor that is…
- Lacking personal funds
- Having troubles qualifying for traditional financing
- Worried about the taxes associated with the property
The best thing real estate professionals can do for their clients is to inform them about the benefits of purchasing real estate using a self-directed IRA. Offering new solutions to clients on different ways they can purchase real estate not only separates the good Realtors® from the great Realtors®, it’s another way to earn more commission. Click here to learn the top ten reasons why every Realtor® should know about a self-directed IRA.
Is Your Client Not Interested in a Real Estate IRA? Mention a 1031 Exchange!
Real estate professionals that have investors who do not want to use their retirement account could possibly do a 1031 exchange. A 1031 exchange is another tax-saving strategy that allows the real estate investor to exchange their current investment or business use property for another (or multiple) investment or business use properties of equal or greater value, deferring all taxes associated with the sale of the property. Realtors® can inform their clients of the differences between a 1031 exchange and a real estate IRA to figure out what strategy would work best for their client’s situation.
How to Market Real Estate IRAs and 1031 Exchanges to Your Clients
There are many ways to market these real estate investing strategies to your clients. Below are just a few ways to get started.
- Add an “investment real estate” option to your website with information on real estate IRAs and 1031 exchanges
- Post blogs on both topics on your website, LinkedIn, and other social media platforms. You can post one of our real estate IRA blogs or 1031 exchange blogs as long as you reference Midland IRA and keep the same content.
- Add your contact information to our customizable 1031 exchange brochure
- Create flyers or add your contact information to our customizable 1031 exchange cheat sheet and customizable real estate IRA cheat sheet.
- Plan an educational event
- Market these strategies in your newsletter, mailings, or on your business card (i.e. “Ask me how to pay no taxes on your investment property!”)
Invite Midland IRA to Speak to Your Office or at Your Next Event!
Midland IRA takes pride in educating others about real estate IRAs and 1031 exchanges. If you would like us to come into your office to speak to your team or to your clients, we would be happy to do so at no charge. Midland IRA works with real estate professionals every step of the transaction to ensure everything is completed properly in a timely and stress-free manner. Real estate professionals and their clients can call us anytime at (239) 333-1032 to ask any questions they might have, or to get started!
Email us below to speak at your office or at your next event: