Can I Invest in Real Estate with Someone Else’s Retirement Money?
It may sound like a scam but it’s far from it. Finding the gold mine in retirement funds is an excellent way to tap into real estate investing. Using retirement funds to invest in real estate over and over again generates good return not only for yourself but for your investors as well. Many investors have jumped on board cashing out retirement funds and IRAs to utilize the money for real estate investments. Can you use other people’s retirement funds to invest in your real estate?
The key is education. Informing potential investors of the benefits and perks to investing their retirement funds into your real estate adventures. Retirement funds simply sit there until retirement; why not use those funds in the meantime by investing in real estate and increasing the chance of potential growth substantially? Instead of investing in banks and stocks, these investors set up self-directed accounts to take control of their own retirement funds and redirect those dollars into your real estate deals.
If you’re planning to do this with other people’s retirement funds make sure you understand the steps involved and are able to explain it without confusing your potential investors.
So how does this work? If investors have funds through a 401(k) plan they will need to conduct an in-service transfer through their benefits department. All employers have different restrictions and requirements but typically those funds can be transferred tax and penalty free into a self-directed retirement fund. From there those funds can go directly to your real estate deals offering investment potential, growth, and a quicker return for you and your investor.
If you think of it this way, retirement funds are set aside for potential investment purposes and since these funds are typically not designated and tell retirement, the chances of you using the funds over and over, so long as your investor gets a good return, are quite positive.
Again, the key is educating your investors on the different options to redirecting their investment funds. Keeping it simple and yet highly lucrative is the positive way to invest these funds. If they’re confused they can certainly talk to your CPA or tax advisor for a better explanation of how this all works.
Call me today and I would love to talk to you about putting your retirement funds or others to use for real estate investing.