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When the banks won’t lend, why not beat them at their own game and lend from yourself? Or better yet, coordinate deals where you bring together private lenders with underperforming investments, and pair them with below-market real estate properties? The playing field has changed my friends, and for those who know how to take advantage of it, fortunes will be made!

Most people you meet are sick and tired of the rollercoaster ride the stock market has taken them on. And, many people are also wary of real estate with its plummeting values. However, nearly everyone understands the value of a ‘hard asset’ like real estate, if it’s explained to them correctly. The next time you’re talking to a potential private lender, ask them “How would you like a return OF your money as well as a return ON your money?” Most stock brokers never ask that question!

Nearly 97% of all IRA investments are in traditional stock and mutual fund accounts. The rest of this article is for the other 3% who want better control of their financial destiny, leveraging self-directed IRAs and creative finance to build their retirement portfolio.

There are three primary models for self-directed IRA investing:

  • Assignment of Contract to Purchase Real Estate
  • IRA Lending
  • Purchasing Long-Term Real Estate to Hold

Model 1: Assignment of Contract to Purchase Real Estate
This is the simplest form of investing: You find something that someone else would like to purchase (a house, condo, duplex, building, etc.), and place a Contract to Purchase on it, naming your IRA as the buyer with the right to assign the contract before closing. Basically, you’re finding something to buy wholesale, and selling it at retail! Any profit you make will be tax free forever if it is a Roth IRA, and tax deferred if it is a Traditional IRA (or a plan taxed like a Traditional IRA).  You can quickly build up investment capital with this method.

Model 2: IRA Lending
You can keep your IRA money working all the time at a predetermined interest rate with this technique. You loan trustworthy individuals with your IRA funds which is secured by real estate at a safe loan-to-value, earning a competitive interest rate.

Model 3: Purchasing Long-Term Real Estate to Hold
Most people aren’t aware that their IRA can borrow money to purchase real estate. This means you can allow your IRA to enjoy the same leverage as you (the IRA owner) might have. There is no limit to the number of houses your IRA can own.

These three models just scratch the surface, and as you can imagine, there’s much to learn to employ each strategy successfully. My goal is to get your wheels spinning so you can begin to see the possibilities of what is available once you know what to look for.

Combining creative financing and IRA investing provides an unbeatable strategy for today’s liquidity crisis . . . and it can be successfully used in all areas of the country. Walter Wofford will be teaching these topics and more on October 23-24 at the REI Rainmaker Retreat.

He has been successfully investing in residential real estate in the Jackson, Mississippi area. In his 29-year investing career, he has bought and sold over 1,000 houses and renovated 200 houses, upgrading whole neighborhoods at a time. He is a real-life real estate investor who works every day in the business and teaches basic and advanced IRA education involving real estate, notes, options and wraps throughout the country. Walter combines real estate knowledge with practical experience, and mixes it with a sense of humor that will keep you glued to his every word. And, he’s a hoot to listen to…come prepared to be taught AND entertained! It’s a rare case where you can have your cake and eat it too.