Solo 401k: The Ultimate Retirement Plan for Real Estate Investors

by qinfokusuma 3. February 2013 14:53

Solo 401k:  The Ultimate Retirement Plan for Real Estate Investors

 

The Solo 401k retirement plan offers many advantages, especially for real estate investors.  Advantages such as high Solo 401k contribution limits give investors more opportunities to increase their income. 

 

Consider a few advantages of the Solo 401k:

 

High Solo 401k contribution limits

 

After working so hard, real estate investors hate to see their hard-earned gains frittered away in taxes and penalties. 

 

High Solo 401k contribution limits allow more income to be sheltered from taxes.  The Solo 401k allows contributions to be made in two capacities- as employee and as employer, in effect doubling the ability to shelter income. 

 

Unlimited investment opportunities

 

With a typical retirement fund, investment options are limited and confined to the stock market. 

 

The Solo 401k is different.  It allows investments to be made in virtually any investment class, such as residential and commercial properties, foreclosures, tax deeds, tax liens, and raw land.  Real estate investors can access their funds to invest in almost any real estate opportunity. 

 

Checkbook control

 

With many real estate investment opportunities, time is of the essence.  With the Solo 401k Plan, the owner is the trustee and can direct how the funds will be used and invested, without custodian consent.  Decisions can be made immediately, without additional delays and fees.  Making an investment can be as simple as writing a check. 

 

Loan feature

 

The Solo 401k also offers a loan feature.  A loan can be taken from the fund for any reason, tax and penalty free.  The owner can borrow up to $50,000 or 50% of the total value of the Solo 401k, whichever is less. 

 

Choosing a retirement plan requires the same care and research used in making real estate investments.  For the real estate investor, many benefits such as high Solo 401k Contribution Limits and Checkbook Control make the Solo 401k Plan the ultimate choice.

 

To learn more about this plan please contact Sense Financial Services at (949)228-9393

 

Tags:

Retirement | Retirement Plan

TEAM NUVISION VIDEO

by qinfokusuma 13. November 2012 20:18

Take Control of Your Future: Use Your SD IRA to Invest in Real Estate

by qinfokusuma 7. June 2012 13:30

Did you know you could use your nest egg to purchase an investment property and increase its value through cash flow? You can roll your traditional IRA or 401k into a self-directed IRA (SD IRA) and—as the name implies—have direct control over where your funds are invested, namely a cash flow-producing rental property.

Traditional IRAs, in most cases, are distributed among stocks, bonds, and mutual funds at the discretion of the bank or financial institution by which they’re managed. The financial institution acts as the trustee or custodian of the IRA; it distributes, receives, and holds the account funds for the investor. In most cases, the investor is out of touch with his or her investment activity and just hopes for the best.

While approximately 97% of all retirement account assets are invested with banks, brokerage firms, mutual fund companies, and insurance companies, many people don’t know there are other retirement investment options available and that many of these options have greater return capabilities.1 Real estate, limited liability companies, private companies, and joint ventures are just a handful of possibilities. These investments require that you first roll your IRA into a self-directed IRA to allow you to direct its activity. Because self-directed IRAs are less profitable for financial institutions than traditional IRAs, and because fewer institutions are proficient at handling them, they’re more reluctant to communicate this option to investors.2

There’s no penalty for rolling your retirement funds into an SD IRA, but like a traditional IRA, it requires an account custodian. The difference is your ability to tell your custodian where to invest your funds. For example, you can have your custodian purchase real estate with your SD IRA, then hold the property as a rental investment and have the cash flow go back into your SD IRA. As a bonus, the fees associated with SD IRA custodians can be lower than traditional IRA fees.3

It’s much simpler than most people think. The first step is to find an SD IRA custodian. Not all banks and brokerages handle this type of account, and you’ll want to find one that specializes in SD IRAs. And be aware, rolling your IRA into an SD IRA typically takes six to eight weeks.

Once you have your SD IRA all set up, you can make an offer on a selected investment property in the name of your SD IRA. After negotiating a deal, your custodian executes the contract. There’s extra paperwork involved when going this route, but your custodian can help guide you through the process.

If you’re interested in boosting your retirement and diversifying your investments, using an SD IRA to invest in real estate is a great strategy. You’ll want to consult with your accountant and find a custodian who is experienced with SD IRAs. This method is certainly more proactive and lucrative than leaving your retirement funds in the hands of someone else and simply hoping for the best.

For immediate assistance, please contact your
TEAM NUVISION Real Estate Investment Broker Kyle Ngo
Tel: 626-215-2368 or email: Kyle@TeamNuVision.net


1Allen, Matthew M. Leverage Your IRA: Maximize Your Profits with Real Estate, Scottsdale: LIFESUCCESS PUBLISHING, 2010.

2Ibid.

3http://www.biggerpockets.com/articles/3088-4-reasons-to-invest-with-your-sdira-in-real-estate

 

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