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Why isn’t everyone doing this?

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This blog is being written for informational and educational purposes only. It is not intended to provide individual or professional advice, and is intended only for people who have Traditional Individual Retirement Accounts and/or rollover employer retirement accounts and want to purchase real estate.

Today I want to address a common question I hear about Real Estate IRAs from IRA holders: Why isn’t everyone doing this?

There are three main reasons why someone will not change their IRA into a Real Estate IRA:

  1. The IRA holder does not know that the option is available.

Many financial tools are available to investors, but without adequate knowledge of all of the options that are available in a particular situation, it is impossible to arrive at an educated decision.

For example, savvy real estate investors know about a tool called a 1031 Tax Deferred Exchange. Even though 1031s have been around since the late 1970s, for some they are not common knowledge. Real Estate IRAs are the same way – not many people know that they are an option.

  1. A thorough review by a Real Estate IRA Professional reveals that the Real Estate IRA is not a viable option.

Having your individual situation evaluated by an experienced professional is a must in order to determine how the various rules and regulations will apply to you. Because there are different rules during the accumulation and distribution periods, you cannot determine your own qualification based on the information that you might find with a simple Internet search. Instead, to determine whether Real Estate IRAs are a good fit for you, you must consult with a professional.

  1. “You can’t do that!”

At some point in your childhood, someone may have discouraged you from pursuing one of your goals by telling you, “You can’t do that!”

Naysayers are everywhere, and they try to discourage you for many different reasons. Now that you are an adult and you have saved your money and accumulated assets, why do naysayers discourage you from using some or all of your IRA to purchase real estate? The laws permitting IRAs to be used to invest in stocks, bonds, precious metals, real estate, and mutual funds, among other investments, have been in place since 1974. Why, then, would institutions that offer equity-type investments have their employees tell you that same old phrase: “You can’t do that”?

As with all financial decisions, you must do what is best for you and your family. How you invest your IRA is your choice; learning about your options, consulting with a professional about your specific situation, and pursuing your best option in spite of naysayers can decrease your risks and provide you with a greater sense of satisfaction.

To see how Real Estate IRAs can benefit you and your family, visit our Home Page and click How to Begin, then Three Step Real Estate IRA Process.

Alan N. Potts a Chartered Financial Consultant is located in Tallahassee, Florida. He can be reached at 1.800.525.1893.