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Monday, December 1, 2014

Can You Buy Real Estate With Your IRA?

There are many great Phoenix homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (480) 580-0171 for a FREE home buying or selling consultation to answer any of your real estate questions.

Today we are going to answer a question that we got recently from a client. The topic: real estate investing.

Robert sent us an email recently asking about investments in real estate. His exact question was "Can I purchase a real estate investment property with my IRA?"

That is an amazing question, and one we are happy to answer. You certainly can borrow from your IRA to purchase an investment property, and pay the amount back later.

There's one problem with this approach, however. If you borrow the money from your IRA and pay it back, you will have to pay back a lot of money in taxes as well.
Don't worry, though. We have another solution that you can take advantage of that won't require you to pay extra money in taxes. You can leave your money in the tax-free protection of your IRA, and use that to purchase your real estate.

This is called a "Self-Directed IRA" and what happens is that you make the real estate purchase through the name of your IRA.

This is a wonderful, and cheaper way to add real estate to your portfolio and help you make some more money.

If you have any questions, don't hesitate to contact us. We would be happy to answer them.