How to Use a Roth IRA to Buy Investment Property

December 3, 2017


How to Use a Roth IRA to Buy Investment Property

Many people don’t realize the power of a Roth IRA until they use it to purchase rental property and buy flips in the Louisville KY area. By utilizing a self-directed IRA like Equity Trust, they can control exactly what they are investing in – or exactly where they are investing.

When working with Equity Trust, an investor is not the “buyer” of the property; Equity Trust is the buyer but the real estate investor chooses the property. They purchase property for the benefit (fbo) of the investor and it is deeded that way. When buying rental property, the rents should go directly to Equity Trust as they are gains and not taxed again since the Roth IRA is funded with post-tax dollars. This is HUGE. Improvements and taxes can be paid from the IRA as well as property management fees.

House renovation and resales – flips – can also be purchased with a Roth IRA. The advantage of course is that it is all a gain on the investment and so you avoid the taxation.

I have clients that utilize this method to enormously benefit their portfolio. Check with your tax advisor before making any major investment.

NOTICE: Mark Atteberry & Louisville Market Realtors and their affiliates are not tax professionals, attorneys, doctors or 3 out of 4 dentists. Don’t take our word for it (even though it is true). The tax code is ever-changing so we recommend doing this sooner than later.