Buy Low and Sell High – The Real Estate IRA

You may have heard the wise old adage "Buy low and sell high". Real estate, right now, fits this description. You may have always wanted to invest in real estate; you may have seen many opportunities pass you by because you thought you didn’t have the money or the experience. You may have said to yourself, I’d love to invest in real estate, but I don’t know where to start.

Here's where you start: Rollover an old 401(k) or IRA into a self-directed IRA or open an IRA and start contributing. A self-directed IRA can buy real estate. A self-directed IRA can also hold trust deeds, secured and unsecured notes, limited partnerships, private stock and other nontraditional investments.

How it works: In 1975, as part of the Employee Retirement Income Security Act of 1974 (ERISA) and the creation of IRAs, self-directed IRAs were also created. The term "self-directed" simply means that you, as an individual, have complete control over selecting and directing your own IRA or 401(k) investments. Once established, your account can buy real estate, notes, limited partnerships, commercial paper and many other types of assets. With a self-directed IRA, you make all of the decisions regarding your investments. The self-directed IRA custodian or administrator completes the documents required to establish your account and purchase your investment.

If the option of using tax-deferred funds to purchase property sounds appealing, find a truly self-directed IRA administrator and open an account. If you want out of the stock market, there are options. There is still money to be made in real estate, even in (perhaps especially in) this economy. Everybody has to live somewhere, work somewhere, shop somewhere - and you can provide them with that "where".