CP21: How to Use a Self Directed IRA to Invest in Real Estate
- E21
- 33:19
- August 25th 2020
Join Vince and Steve with Brian Eastman as they chat about what to do with your retirement accounts. Brian is a principal and senior consultant at Safeguard Advisors. He shares some options especially for accounts that are under performing and when you’re not satisfied with the current market volatility.
Brian’s company specializes in self-directed retirement plans with checkbook control. It serves as a tax-sheltered bucket of money, like any other retirement plans out there. Aside from the investment flexibility in self-directed IRAs, it also has a higher contribution limit. This type of plan benefits people who have been working for a while, those who have accumulated some money and have changed jobs at least once.
The nature of the investment with a retirement plan can create tax implications, depending if it is in a small business, an LLC or a corporate one like Ford. This can be a deal breaker or not depending on some conditions. There might even be a loss of gross return to taxation. In short, there is a cost in participating in these investments.
Brian discusses how some people had their 401(k) become a 201(k) in the period of 2008-2010. A lot suffered some loss, while some just froze. Investments took a pause for two weeks and now Brian said that they’re starting to see an uptick. This crisis has made people pay attention to their retirement funds and when they do, they may want to be diversified.
Brian discusses investing in a mix of asset classes in real estate and real estate-backed, ventures, and partnership interests. He said that there’s still a tremendous deficit in real estate supply and there might be people who are currently homeowners that are going to become renters. He sees that there will be an increase in the demand for rental property in the near future. So, it may create some buying opportunities in real estate investments.
Outline of the Episode:
● [02:00] Self-directed IRA and the solo 401(k) plans
● [04:00] Who benefits the most in self-directed IRAs
● [05:12] Tax issues in retirement vehicles
● [06:50] Self-directed IRAs are meant to be investing at arms length in passive-income producing things
● [08:40] Taxes on leveraged investments
● [10:50] There is a cost in participating to investing
● [13:20] Market volatility during Covid-19
● [17:16] The minimum amount to invest
● [18:55] Different kinds of arms-length investments
● [22:22] Brian’s experience in investing
Resources:
● 877-366-4074
● How to win Friends & Influence People - Dale Carnegie
● The Call of the Wild (2020 Film)
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The Cashflow Project
This is for busy professionals who are looking for financial freedom through passive income, with a focus on cashflow assets in Multifamily Real Estate. We will be covering a variety of topics such as buying, managing, and selling real estate assets, specifically apartments.
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