New investors ask us all the time at Midwest Fix-and-Flip about buying investment properties in Toledo OH…. We try to be as informative as possible. And, one of the key questions that most investor newbies (and many experienced investors alike) ask is how to finance real estate investment/rental property…. what’s the best way to pay for it.
Did you know you can use your IRA funds to buy local real estate investment properties?
Self Directed IRAs for Real Estate – You Can Use Them To Buy Rental Properties in Toledo!
For those who don’t already know, IRA refers to an Individual Retirement Account.
IRA’s traditionally investment your money in stocks, mutual funds, etc…. mainly because that’s the traditional “mainstream” way of doing things that most people are comfortable with for their retirement savings accounts.
But, now that you’re reading this article, you know about another great option for retirement savings…. real estate, which can be an BETTER way to increase your wealth!
But… how do you use your IRA to grow your retirement fund, and still earn the tax benefits of an IRA, as well as the larger ROI that real estate can provide in Toledo?
The tax laws provide for Self-Directed IRA investing which smart investors are increasingly using to buy real estate. Just make sure you follow all the requirements to ensure that your investments are performed according to the tax laws when using your IRA for local OH real estate, and you’ll find its an awesome financial vehicle which you can roll over again and again into new real estate purchases.
Some Simple SDIRA (Self Directed IRA) Rules To Follow for Real Estate
If you’re using your Self-Directed IRA for real estate in Toledo you are forbidden from self-dealing. Self-dealing is outlawed with your SDIRA in the sense that you can’t use it to purchase land or property (either commercial or residential) for the owner or any family member to reside in.
It is also prohibited to sell property or land to the owner of the IRA or their family members in the process of business dealings in Toledo.
The Process of Buying Real Estate in Toledo with Your Self Directed IRA
There are very specific rules that you have to follow if you’re using your SDIRA to purchase Toledo area properties.
Once you provide the correct documentation for purchasing local Toledo area investment properties to the Self-Directed IRA custodian, the custodian will start the purchasing process on behalf of the SDIRA real estate.
All the costs related to the purchase of the property are channeled through the SDIRA with real estate; hence it’s vital that it must have enough cash to pay for all the costs. Failure of this will lead to forfeiture of tax benefits, and penalties to be paid by the IRA!
Choose The Type Of Self Directed IRA Wisely When Using It For Your Real Estate Investing
There are lots of options when it comes to Self-Directed IRAs.
Not all SDIRA’s allow you to buy real estate with them… so you’ll have to do your research to find the best SDIRA custodian to start buying Toledo area properties with.
NOTE: We’ve worked with many SDIRA companies and we’ve found the best providers who are very experienced in working with real estate within an IRA. Call us today at (419) 930-9900, or email us (see Contact page for address) and we can give you information on the better SDIRA companies for Toledo area real estate investments.
Some Self-Directed IRAs have more restrictions than others.
As an example… some of them require that you submit the investment details to them…. they analyze it first… then send the cash from the account. That could be too late, in a hot real estate market where the best deals go fast.
There are also accounts that give you what’s called “checkbook control”.
An investor in a Self-Directed IRA for real estate with control of the checkbook can make purchases on their own timetable just by writing a check, rather than having to go through the lengthy process of passing the deal upstream to the custodian for evaluation before acting on it. This lets you take advantage of deals where you have to act quickly. (Many properties in the Toledo area that are suitable for investment go fast.)
Your Role In The Investment After The SDIRA Purchases It
You as the owner of the Self-Directed IRA account have the ability to manage the investment in a hands-on capacity. The roles you could assume include: receiving rent checks from tenants, managing the properties, etc… everything you’d normally do as the owner of an investment property.
Of course, there are many more guidelines that you have to follow if you plan on pursuing a Self-Directed IRA for real estate in Toledo…. But, the benefits are worth it! So be sure to do your homework, and do these three things immediately:
- Find a great Self-Directed IRA company to be your Custodian:
This is the first step. You have to get this in place before you even think about purchasing a property with your IRA. If your current IRA holder doesn’t allow you to buy and hold real estate with your account… Call us at (419) 930-9900 and we’ll refer you to one of the better SDIRA custodians locally…. They’ll be able to help you transfer your current IRA to a new Self-Directed IRA account with them.
- Talk to your tax accountant:
We are not tax consultants, lawyers or financial fiduciaries. As such, the suggestions we provide in regards to SDIRAs are for information purposes only. Its best to do your own due diligence, and to consult your personal tax advisor for specifics about your individual tax liability when using SDIRAs to purchase real estate in the Toledo area.
- Find a couple of great Toledo area investment property experts, like Midwest Fix-and-Flip.
One of the best ways to get great properties in the Toledo area is by working with a professional investment property company like ours. We find high discount properties (both single family and small multi-family) in and around the Toledo area. And, we sell them to investors like you at discounts that enable you to turn them into profitable rental properties.
We Can Help You Get Rolling With Your SDIRA For Real Estate.
Call us at the phone number below, or send an email (see Contact Us for address), and we’ll walk you through the process, help point you to the best local SDIRA resources in Toledo, and put you on our Preferred Investment Property Buyers List for when we find deals that suit your specific investment criteria.