So you want to be a passive real estate investor? Congratulations! 90% of the world’s millionaires do this to create wealth. Problem is you have job and can’t spend all your time inspecting properties, dealing with tenants and negotiation deals. Using a Self-Directed IRA you can save for your retirement and invest in real estate tax-free (Roth) or tax-deferred. Here are a few of the ways to practice passive real estate investing and keep your day job:
Promissory notes, trust deeds, performing and non-performing debt are all ways to invest in real estate using Notes. You can use your IRA to lend money to others with real estate projects for real estate acquisition or improvement. Your IRA can buy performing and even non-performing debt (A loan on which the borrower is not making interest payments or repaying any principal.)
Real Estate Investment Trust
A REIT, or real estate investment trust, is a company that either owns or finances real estate that produces income. REITs invest much of their money into real estate, and it’s how they make most of their income. There are REITs that focus on both residential and commercial property. Most REITs are equity REITs, but some trade in mortgages instead of actual properties.
Real Estate Syndications
Syndications give you a chance to pool your IRA’s financial resources to invest in properties and projects much bigger than could be afforded or managed alone. Investing in someone’s SEC-approved syndication can be one way you grow your retirement. There are Reg-A, Reg-B, Reg-C and Reg-D offerings. Each type has its own rules, but the net result is the same. There are lots of reasons to invest in real estate syndications.
So where do you find these opportunities? Network! Spend some of your after-work time going to Meetup groups, REIA groups, talk with friends and get referred to deals. Before you invest, of course, do your homework (also known as due diligence) and get to know the asset class. What are the potential pitfalls and potential rewards?
Once you pick the investment that’s best for you, your Self-Directed IRA comes into play. It’s a 3-step process to 1) Open an account 2) Fund you account and 3) Invest. To learn more about passive real estate investing, call us at (866) 447-6598 or send an email to info@uDirectIRA.com or click HERE