Longboat Retirement Solutions LLC

Using Retirement Funds for Real Estate Investment June 15, 2012

BY: Lars Forsberg

The ability to invest in real estate with your IRA or 401k is one of the most appealing attributes of self directed retirement as people lose faith in the stock market and it’s less than illustrious “professionals”.

There are many ways to approach real estate investment with retirement funds.  The two main divisions are the Internal Method and External Method.  With the Internal Method, the investment property is held in the retirement account name for the benefit of the account holder.  With the External Method, the title of the investment property is held personally in the name of the owner.

We will compare the internal and external methods over several posts so that the information is digestible as it can get pretty thick with technicalities.  Due to the nature of these real estate investment techniques, it is recommended that you get a good handle on the process and procedure before jumping.

Before you leap, make sure that you organize your thoughts and goals just as you would for any investment related to your retirement savings.  Are you investing for value appreciation or cash flow?  What is your timeframe?  Are you considering living in this property during retirement?  Will this property be used to generate cash investment into your IRA or 401k….during your working years?….your retired years?….both?  Do you plan to sell the property when you retire?….before you retire?


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