We get asked questions all of the time from experienced investors that we work with here at Lone Star Real Estate Solutions LLC.
Most of those questions surround buying investment properties in San Antonio Texas… that we naturally know a lot about.
But, one part of purchasing an investment property / rental property is how are you planning to pay for it?
And, is it possible to use my IRA to buy local investment properties?
Self Directed IRAs for Real Estate – Can You Use Them To Buy San Antonio Rental Properties?
First off, IRA stands for Individual Retirement Account.
IRA’s traditionally hold investments such as stocks, mutual funds, etc…. mainly because that is the mainstream way most people save for retirement.
But, since you’re reading this article you understand that real estate can be a fantastic alternative for increasing your wealth.
But… how can you use your IRA to increase your retirement fund, earn the tax advantages of the IRA, and also the benefits of San Antonio real estate?
Even though the self-directed IRA real estate is increasingly being taken up by investors, you ought to do certain things make sure that the law is being followed to the letter when you use your IRA for local Texas real estate investments.
Some Simple SDIRA (Self Directed IRA) for Real Estate Rules To Follow
No “Self Dealing”
If you are using your self-directed IRA for real estate investing in San Antonio you’re forbidden from self-dealing.
Self-dealing is outlawed with your SD IRA in the sense that it can’t purchase land or property (both residential and commercial) for the owner or any other family member to reside in.
It’s also prohibited from selling land or property to the owner of the IRA or any relatives in the process of business dealings in San Antonio.
The Process of Buying San Antonio with Your Self Directed IRA
There are very specific rules you need to follow if you are using your SD IRA to purchase San Antonio Texas properties.
After you provide the required documentation for buying a local San Antonio investment property to the self-directed IRA custodian, the custodian will begin the purchasing process on behalf of the self-directed IRA real estate.
All the expenses associated with the purchase of this property are channeled through the self-directed IRA for real estate; therefore it’s essential that it must have enough money to cover these costs.
Failure of this will result in the forfeiture of tax benefits and also the penalties to be paid by the IRA.
Choose The Type Of Self Directed IRA Wisely To Use It For Your Real Estate Investments
There are lots of alternatives in regards to self-directed IRA’s.
Not all SD IRA’s allow you to buy property in them… so you’ll need to do your research to get the best SD IRA custodians so that you can begin purchasing San Antonio properties in it.
NOTE: We have worked with many SD IRA businesses and we have found the best providers that are experienced in working with real estate within an IRA. Call us today at (210) 807-6567 or email us through our Contact page and we can provide you with information on the best SD IRA companies for San Antonio Texas real estate investments.
Some Self Directed IRAs are more restricted than others.
For example… some require that you submit the investment details to them… they examine it… then they send the money from the account.
But some accounts will give you what’s called “checkbook control”.
An investor in a self-directed IRA for real estate with control of the checkbook is able to make purchases by just writing checks instead of needing to go through the lengthy procedure of having to pass it through the custodian first. This permits you to take advantage of deals that you have to act fast on (which a lot of our local San Antonio investment properties go fast).
Your Role In The Investment After The SD IRA Purchases It
As the owner of the self-directed IRA account, you have the ability to really manage the investment in a hands-on manner. The roles include: receiving checks for rent payments from tenants, managing the properties, etc… same as you’d normally do as the owner of an investment property.
Of course, you’ll see that there are more guidelines that you’ll need to follow if you plan on using your self-directed IRA for property in San Antonio… so be sure you do your homework and take care of these two things immediately:
- Find a great self-directed IRA company/custodian: This is your first step. You have to set this up before you even consider buying anything via your IRA. If your current IRA holder will not let you buy and hold property in it… call us at (210) 807-6567 and we will refer you to the best local custodians… and they’ll be able to assist you in the transfer of your current IRA to your new self-directed IRA.
- Find a couple really good San Antonio investment property experts, like us at Lone Star Real Estate Solutions LLC. One of the best ways to get great properties here in San Antonio, Texas is by working with a professional investment property business like ours. We find highly discounted properties (both single and multi-family) around San Antonio and sell them to investors such as yourself at a discount so you can turn them into solid profitable rental properties. Join our Preferred Buyers List Here >>
We Can Help You Get The Ball Rolling With Your SD IRA For Real Estate.
Just reach out to us at the number below or send us an email… and we will walk you through the process, point you in the direction of the best SD IRA resources locally in San Antonio, and get you on our Preferred Investment Property Buyers list.