Investors don’t have to be a landlord to get involved in the real estate market through one of these self-directed accounts.
Charlotte, NC (PRWEB) March 24, 2017
The Self-Directed IRA is usually seen as a way to invest in real estate, oftentimes requiring that the owner become, in essence, a landlord. But a recent blog post at American IRA shows that investors don’t have to be a landlord to get involved in the real estate market through one of these self-directed accounts.
One of the headlines of the blog post at AmericanIRA.com was that Self-Directed IRA lenders can service an underserved market. In other words, lending money through a Self-Directed IRA provides some added protections when investors make loans, while giving others who need mortgage loans an alternative to secure the loan they need.
Jim Hitt, CEO of American IRA and author of the article, pointed out that while most mortgage loans currently yield about 5% interest or under, there may be some small projects that can’t get funded the traditional way which could yield between 7% and 10%. This is, of course, a solid yield, particularly when investors are looking for a way to move some of their money away from the stock market and looking instead to diversify retirement assets.
Like all investments, mortgage funding via a Self-Directed IRA comes with risks, which means it’s wise not to plunge into it head-first. Jim Hitt is also quick to point out that there are rules against lending money to self, a spouse, to parents, grandparents, children, grand children, and the like. “You always want to start with the rules in mind first,” says Jim Hitt. “Then you can weigh your options once you realize that some avenues simply aren’t available to you through these regulations.”
Mortgage funding, the article says, is important because it’s a way to participate in the real estate market without the drawbacks of becoming a landlord or finding a property to buy within their Self-Directed IRA. This can be an alternative way for people to generate the returns they need without solely focusing on the strength of the stock market.
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