How To Invest in Real Estate with A Retirement Account (yours or someone else) In this video I am going to show you how to use a retirement account like a 401(k) or another person’s retirement account, OPM (other people’s money) to invest in real estate! Now, as many of you may be thinking, is it legal to use your or someone else’s retirement account to invest in real estate? The simple answer is YES…..BUT it depends on what retirement account you have that would qualify you to use your retirement account to invest in real estate. There are several ways to invest in real estate with your retirement savings but it may require you to execute a roll-over into a different retirement savings account that is structured properly to invest in real estate. So if you have an existing 401k or IRA, these have the ability to convert into an account that will help you invest in real estate with your retirement savings!
This all started about 3 years ago when I was introduced to this strategy by a Tax Attorney, Mat Sorensen, using a Self-Directed IRA retirement account to invest in Real Estate…..LEGALLY! So here is how I used retirement savings to invest! I found a deal that was actually located in my neighborhood, the home was up for $30k and it needed around $28k worth of rehab costs. And since I was familiar with the average price of the neighborhood homes, I knew that this property would sell for just around $100k. So with everything involved, I was looking at a $30k profit if the property sold. So what I did is that I found an investor with around $200k in their retirement savings. This individual was already looking to invest in real estate with their retirement savings (this made it easier). So what I did, I broke down the process of how to invest in real estate with your retirement savings. The first step is to roll-over the funds into a Self-Directed IRA Account. Self-Directed IRA Accounts let you invest into real estate, companies, businesses…….anything within the guidelines of the IRS. You can also open an LLC within the IRA account to control the account with a legal entity for protection. This also helps access the funds from the retirement account because you can open a checking account, to pay for the home and rehab costs. So overall, the process goes like this: Roll-over existing retirement savings into a self-directed IRA, set-up an LLC for control of the IRA, Purchase, Rehab, Profit! And that’s how you invest in real estate with retirement savings!