Signed in as:
filler@godaddy.com
Investment opportunities
Learn More Here .....
REAPING THE REWARDS OF REAL ESTATE INVESTING WITHOUT OWNING A SINGLE PROPERTY
courtesy of April Crossley, LazyGirl REI on July 29, 2013 in Real Estate Articles
You are probably wondering if you just read that right.
Can you really make money from real estate investing without owning a single property…? And the answer is a big YES! Stay with me and just keep reading and I will reveal exactly how you can grow rich without ever owning a single property.
UNLEARN WHAT YOU HAVE LEARNED
First I want to say, don’t let HGTV be your learning course in real estate investing. Too many times I have run into would-be real estate investors who assume that you can find-fix-flip a property in 30 minutes and at the end, you will make a ton of money. WRONG!! That thought is far from the truth. And because of this assumption, many are investing in real estate and end up owning property with NO KNOWLEDGE of real estate investing. What happens, eventually, is they end up losing money or even go into foreclosure. So does this mean that real estate investing was the wrong choice for them? No, I believe real estate is the best and safest form of investing available, you just need to learn the different ways to invest and figure out which way is the best fit for you.
DON’T BECOME STUCK WITH A PROPERTY DRAINING YOU:
I often come across people who stumble upon a chunk of money and then put that chunk of money into real estate investing, without knowing anything about it. Let me share a recent encounter with a motivated seller…
This is a scenario I come across all too often: A seller calls me desperate to get rid of their property because they “need the money.” I ask them – what are you asking for the property and how did you come up with that number? (comps, appraisal, etc). And the response is usually something like this: Well, I paid 200k for the property, PLUS then I put 40k into the property to fix it up … so I’m asking 240k for the property.
Unfortunately folks, this isn’t how it works. I stumbled upon this scenario with a multi unit I was seeking to purchase this past week. I was trying to explain to the seller that an investor would be looking at a 5k/year loss at minimum with her asking price. That the cap rate was only 3% when you looked at income and expenses. I could tell right away that, to her, I was speaking a foreign language. She had no clue about real estate investing.
So I ask myself: WHY would someone who knows NOTHING about real estate put a huge chunk of their money into a real estate investment property. No one wakes up in the morning and says: gee.. today.. I would LOVE to become a landlord! My full time job and family just aren’t keeping me busy enough. I can’t wait to be a landlord. Truth is – being a landlord is another full time job! Unfortunately, many sellers in this situation come upon a sum of money or have extra money that they don’t want to put in the stock market, IRAs, savings, etc. (can you blame them?) Fact is – you can get steadier and better rates of return in real estate. Problem is – you shouldn’t jump right in if you know nothing about it.
HOW TO INVEST IN REAL ESTATE THE RIGHT WAY:
So what do you do if you have extra money that you want to invest? You want great returns! You want steady returns! You know real estate is the way! You have a few options:
1. Find yourself an EXCELLENT real estate agent/investor COMBO – these are hard to come by. I will never let mine go. Once you find them.. treat them well! You need a real estate agent that is ALSO an investor! You can’t buy investment properties with an agent that has no background or knowledge of real estate investing. Interview your Realtor! Ask them what is in their portfolio. Ask if they work with other investors. Do they have time to work with investors. AND THE MOST IMPORTANT PART: DO YOUR HOMEWORK!! Don’t rely solely on your realtor. If they do real estate investing and have properties of their own, plus they are a realtor – then they are BUSY!!! Read up about real estate investing. LEARN how to do the numbers so you aren’t entirely dependent on your realtor to do everything for you. THEN PREPARE YOURSELF: Learn how to be a good landlord! Go to your local REIA meetings, get tips from other landlords. If you are saying.. man.. that is A LOT of stuff to learn and I don’t have time to look at potential properties, learn about real estate investing, and learn how to be a good landlord, or then on top of it be a landlord…I just have money to invest and I want to put it in real estate! THEN OPTION 1 IS NOT FOR YOU!!!
2. REAP THE REWARDS WITHOUT THE LEG WORK: So you want a steady, great rate of return, BUT… you don’t have time for all that other crap. YOU ARE IN LUCK! You don’t have to learn a thing. All you have to do is find someone you trust who is experienced and knowledgeable in real estate investing and invest your money with them! Give them a loan or mortgage! Become the bank! Because you can! And because it’s profitable! You won’t own a single property; you won’t take on another full time job as a landlord… YOU WILL get great rates of return!! HOW in the world do you find these people?? Who do you know in your area that does real estate investing? Who are the big players? Go attend a local REIA meeting https://www.meetup.com/REI-Meetup/ and find out. And then INTERVIEW them! Fire questions at them about everything and anything you wanted to know about real estate! Ask to see their portfolio.. and more importantly.. ASK TO SEE THE NUMBERS! Have them show you not only what they own but how these properties cash flow, what their profit is on rehab projects etc. Ask for REFERENCES!!! They can give you names of other people just like you that lend them money for returns! They should be able to tell you how the lending process works, give you information on lending from savings, lending from an IRA, etc. etc. The options are endless!
CONCLUSION
Your task now is to determine which option is best for you and take action and never stop learning because Real Estate can produce profit for anyone! But remember you don’t have to become a landlord to do it!
For a lot more info on Private Lending, click on the Private Lending tab in the menu options, then sign-up for your FREE Private Lending Report!
Investing in Real Estate using your ira
Did you know?
Real Estate is at a 30 year low right now in many markets. Recently all over Wall Street Journal, New York Times, and countless other publications there have been stories about big Wall Street companies jumping in and buying real estate rather than stocks… because they know they can get a better return.
So, why are most Americans still trusting their own retirements… IRAs… 401ks… with the stock market?
Answer is, they don’t know any better.
Before we dive into the good stuff… remember, we are not financial advisors and by no means should this guide be meant to act as financial, tax, or legal advice. It’s for informational purposes only. Consult your own professional advisors before you make any financial choices like this.
The Self-Directed IRA for Real Estate
There’s something called a Self-Directed IRA. They’ve been around for a while… and in the past several years lots of people have realized that their IRAs aren’t earning them a darn thing (sometimes even losing money). So, those people (maybe this is you) have started to look for other ways to earn better returns with that same IRA.
Enter the “self-directed IRA”.
A self-directed IRA is simple. It’s a retirement account that has the same tax benefits as a normal IRA… but, you have more flexibility in deciding what you want your IRA to be invested in.
You can invest in…
- Real estate (commercial, income generating rental property, rehabs, etc.)
- Promissory Notes secured by mortgages (i.e. – private lending)
- Tax lien certificates
- Limited partnerships
- LLC’s
- Sub-C corporations
- Real estate options
- Some types of precious metals
- … and the normal investments like stocks that your normal IRA can invest in
Basically, this opens it up so you can buy investment real estate with your IRA… or be a private lender in real estate.
Are There Restrictions?
Yes, there definitely are. There are restrictions on what you do with the real estate if you buy and hold… what types of precious metals… and often times the “custodian” of the SDIRA has restrictions on what they think you can and should invest in.
A custodian? Whats that?
Great questions.
Self-Directed IRA Custodians
The US Government created the SD-IRA loophole to help investors take more control over their investments while at the same time still getting the tax benefits. But, at the same time… they don’t want people setting up these SD-IRAs and just doing whatever they want.
So there is a barrier that they have to have in place… and thats the custodian.
The custodian is usually the Self-Directed IRA company who you have your IRA with. They act as the “go between” when you’re going to make an investment. Many custodians have guidelines on what you can invest in, how long it will take for you to actually make your money work for you once they approve the investment… etc. Some custodians are more passive… and let you actually have a checkbook where you can write checks from your SD-IRA to make investments.
You should do your homework and find the custodian thats right for you. Here’s a few that we know and respect:
- Guidant Financial (expensive, but gives you true checkbook control, which is huge) – https://www.guidantfinancial.com
- Equity Trust – http://www.trustetc.com/
- Entrust – http://www.theentrustgroup.com/
- CAMA PLAN- http://camaplan.com/
Do some research to find the right fit for you.
Some have more expensive fees than others… and some give more flexibility than others.
TOP 5 QUESTIONS to ASK a Self-Directed IRA Company Before You Work With Them:
Before you sign on with a SD-IRA company… ask them a few key questions.
- What are your fees? – Fees can vary wildly. Some charge an annual fee based on the value of the account, some charge an annual fee, some charge large setup fees, etc. Find out what works for you. But, the idea is that by being able to invest in real estate with your IRA… you’ll more than make up for the fees you’re paying with your higher returns.
- What’s the process for approving an investment? – Some companies can take up to 30 days+ to fund an investment after you send it in for approval. Some SD-IRA’s give you what’s called “true checkbook control”, where you actually get a checkbook where you can write checks from your IRA account… which gives you immediate access to the funds (i.e. – to close a deal quickly). Checkbook control usually is a tad more expensive to set up than an IRA account that requires all investments to go through the sometimes lengthy custodian approval process, but again… find out what’s best for you.
- Are there any restrictions on what I can invest in? I want to invest in real estate and make private loans. – Some SD-IRAs with larger more traditional companies like Schwab and SmithBarney put restrictions on what your account can invest in. Some don’t allow real estate… while others do. Just ask.
- Is my retirement account eligible to “roll over” into a SD-IRA? – Not all retirement accounts can be rolled over into a self-directed IRA. Most IRAs can be… and even some 401(k)s can be. Just ask your financial advisor and ask the representative at the SD-IRA company you’re working with.
- How long will it take for my account to be up and running and have funds available for investment? – Some people wait way too long to get this process rolling. If you know you want to use your IRA to invest in real estate… get the ball rolling on getting it rolled over into a SD-IRA account asap. Some companies may take weeks or even over a month to have your account setup complete and ready to invest. So, don’t wait until you’ve found a great real estate deal to get started… get started today so your funds are ready to invest when you need them.
Getting Off The SIDELINES and Getting YOUR Money Working for YOU
If you feel a self-directed IRA may be a great way for you to invest a portion of your retirement in things you know (rather than the unpredictable stock market)… then dive in, take some time to educate yourself on the pros and cons of a SD-IRA (those websites I put above are a great place to start. They have all kinds of resources to learn more about self-directed IRAs and how you can use them to invest in real estate).
If you have any questions on how you can work with us as an investor… just connect with us through FIND OUT MORE below or call us anytime at: 208.907.1949. We are currently working with several investors who utilize their SDIRA as a tool for private lending. It's a great way for them to create passive income without all the work of finding real estate deals, maintain property or becoming a landlord. They partner with us to get the returns of real estate, without the headaches. To explore more about a SDIRA or private lending, please feel free to reach out to us at any time. We have a SDIRA ourselves and have experience working with people to get them switched over to an SDIRA and get their money working for them right away!
Happy investing! We’re here as a resource for you so don’t hesitate to connect with us anytime.
"Working for You so You are Making Money in Your Sleep" ~ Sheila Britt