thePrivateMarket.com

Will it Happen Again?

Due to increasing requests about using IRA funds to purchase investment real estate, our team has created new preferred relationships for clients that streamline this process.  We now offer programs for direct IRA purchases of turn-key rental properties without or with leverage up to 65% non-recourse loans.  We can also organize purchases for LLC’s that own investment properties and private lending notes and first deeds of trust for our clients. 

In order to begin the process, you will need to establish a self-directed IRA account.  It is unlikely that you will be able to obtain this type of IRA account with your current brokerage or bank.  A quick google search will retrieve many custodians who help investors open real estate IRAs.  After comprehensive due diligence of many of these companies, we have selected Equity Trust Company for our own accounts and recommend that our clients include this company as part of their selection process for a custodian.  Consider account and transaction fees, allowed structures, types of entities, consulting and customer service when selecting a custodian.

The following types of accounts can be transferred to a self-directed account for full control by the owner:

• 401(k) rollover IRAs
• Roth IRAs
• SEP IRAs
• SIMPLE IRAs
• Solo 401(k) plans
• Traditional IRAs

After you have selected a custodian and opened a self-directed account, you will begin the process of determining what type of investments to buy.  Within your IRA, you will have many option for investments, including purchasing property directly, buying into LLC’s and Limited Partnerships, as well becoming a lender and holding a mortgage on a property that pays interest to your IRA.  If you choose to purchase property directly, it is possible to use a loan for up to 65% of the value of the property, using a 35% down payment from your IRA.  There are many rules and regulations pertaining to these transactions, so it is critical to get professional legal and accounting counsel during the process.

It is also critical to choose a real estate professional that understands the benefits and risks of investing in real estate (whether in your IRA or otherwise).  At PMRE, we pride ourselves and providing good education about real estate investments to both investors and real estate agents.  There are many agents in the industry that are very knowledgeable about normal transactions, but there are only a limited number that specialize in investment property – especially in the residential investment business.

Turn-Key Rental Properties Available in Central Denver
Our core business at PMRE continues to be turn-key investment properties for well-qualified borrowers.  Our turn-key rentals are completely hands-off investments, and ideal for IRA investment customers.  Here are a few of the benefits:

• Purchase price is discounted to current appraised value
• Extensive remodel completed including systems and finishes
• Professionally screened tenants in place on 12 month leases
• Carefully selected Denver metro neighborhoods
• Transferable full-service property management
• Referrals to qualified tax and legal advisers

Private Lending Notes 8% Monthly Income
The combination of changes of financing rules in November of 2008 combined with recent stock market losses have spawned a new industry of private lending in residential real estate, which we are embracing.  We are offering clients private first deed of trust mortgages on remodeled and rented income properties with good credit borrowers.  Please email us for current availability, 8% monthly payments to your IRA begin immediately.

Fix and Flip Opportunity
The stimulus package tax credit, low prices and low interest rates have further improved the first-time home buyer market.  A combination of low inventory of remodeled homes compared with ugly bank owned homes has created a “pent-up” demand from these buyers in some markets.  The 2009 selling season may be a very good time to be in the fix and flip market, but you must have quality product and a competitive price.

PLEASE NOTE:   We are not a “guru” sales pitch business offering “no money down” real estate investments and unrealistic expectations.  Our guideline for potential investors includes liquidity, verified income and good credit to purchase investment houses or units.  Our Private Placement investments require you to be an existing client and complete a form that states you are an accredited investor.

If you or someone you know may be interested in IRA real estate investments, please have them contact us for information.