InvestorLoft Real Estate Investing Blog

In these days of tightened lending criteria and the stated income mortgage having gone by the wayside, what’s a real estate investor to do? Creative financing requires putting on your thinking cap and looking for new, untapped sources of liquidity. Forget thinking outside the box – you need a whole new frame of mind when it comes to your real estate financing needs.

The process of purchasing real estate in your IRA is relatively simple, yet widely unknown and the subject of this week’s blog. For those in search of a financing source for their real estate investment goals, we’ll plant some seeds worth cultivating today.

The lending environment today is a far cry from where we were 12-24 months ago. While many of the tools that real estate investors used to achieve their goals have now been dispensed with (i.e.: stated income loans, 80/20 loans and the Option-ARM), there’s a pile of money just waiting to be used and it’s likely you’ve been sitting on it this whole time: your IRA. Most investors aren’t aware that they’re able to expand beyond the norm of mutual funds, stocks and bonds with their retirement kitty, but it’s an easy process.

Here are 3 tips to get you started on the path of utilizing your IRA to invest in real estate:

1. Find a custodian for your IRA. There are specialized custodians for self-directed and real estate IRAs. Consult our handy list of custodians to begin your due diligence process.
2. Learn about non-recourse loans and how they can help you finance your real estate purchase by using leverage in your IRA.
3. Review permitted and prohibited transactions. Purchasing real estate in your IRA doesn’t come without Uncle Sam’s restrictions. Once you know what they are, finding a qualifying property is simple!