Right now let’s talk about redirecting some retirement funds.
Featuring:
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Let’s talk about redirecting some of your resources for retirement into investment property. Bob, you’ve looked into, and some of your clients have actually looked at IRA’s as an access for funds for investment real estate.
Bob Nelson: Right, their Individual Retirement Account, if placed with a custodian that allows self-directed investments, not all of them do, I need to tell you. In fact, most of them will say, “No, you can’t do it.” Of course you can, you just have to find the right custodian that is equipped for dealing with real estate and buying trust deeds, that sort of thing, as an investment.
Marcia Edwards: So if it’s not self-directed, could it be redirected to a self-directed IRA?
Bob Nelson: Oh absolutely, and very easily, with one stroke of a pen and one phone call.
Marcia Edwards: So that’s just the willingness of the custodian of your IRA?
Bob Nelson: Yes. You need to find the “right custodian.” I’ve been doing this type of thing for quite a period of time. Pretty familiar with it. A friend of mine, David Moore, with IRA Advantage out of Portland, is my guru. If I have a question that needs to be answered, I race over to David. I can put you in contact with individuals that would show you how to do that, et cetera. And then from that point forward, if you say, “Hey, I want to buy real estate with my IRA,” I know how to do that, and I’ve done it quite a bit.
Marcia Edwards: Well, let’s talk about that. In the IRA, the real estate property you must buy is strictly for investment purposes. You couldn’t buy it for family members and couldn’t use it yourself. Is that correct?
Bob Nelson: That’s right. There are some rules about using your IRA. You’re not supposed to have access to that money because what’s effectively happened, you made a deal with the government through an act that was passed back in 1969, and later in the 70s, that would allow you to divert portions of your otherwise taxable income into a retirement account. Not pay tax on the money, just simply divert it over to a retirement account. Then, as you pull money out of that account, it becomes taxable. And if I can use that money, untaxed, to buy real estate, it’s a pretty neat thing.
Marcia Edwards: So the reason to go take your money out of an IRA and put it into investment real estate?
Bob Nelson: Your options would be stocks, bonds, other forms of investment. If you say, “Hey, I like real estate a whole lot better,” it’s there to be done.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.
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