This 'Fix and Flip' netted the client's real estate IRA $28,500 in just six months!
Atlanta, GA (PRWEB) October 12, 2012
American IRA, a national provider of self-directed real estate IRAs, celebrates the success of yet another client on a 'Fix and Flip' real estate purchase! This 'Fix and Flip' netted the client's real estate IRA $28,500 in just six months.
The client used their real estate IRA to purchase the property for $50,000. In this case, the property needed about $15,000 in work. It wasn’t a huge rehab project but certainly one that many of the people reading this article have done themselves. Also keep in mind, once again, the holding costs. In this case, it was $1,500. HOAs, taxes, insurance and things of that nature are included in that number.
After 6 months, the client sold the property for $95,000. Once again their real estate IRA owns the asset, so depending upon the account the gains are going to be tax free or tax deferred. The property sold price was $95,000, the purchase price was $50,000, rehab costs were $15,000, and the holding costs were $1,500. The total profit was $28,500 ($95,000-$50,000-$15,000-$1,500=$28,500).
What a fantastic outcome: $28,500 in just six months!
Some words of caution:
People need to make sure that they are not exhausting all of the money from their real estate IRA when making a purchase. They need to have a substantial amount left over for any sort of incidental costs.
Also they need to keep in mind that their real estate IRA owns the asset, so all the cash flows in and out of their real estate IRA. When they’re paying the contractor for the work that’s done on the property, they’re going to instruct the American IRA, LLC office to actually cut that check from their real estate IRA to whatever appropriate parties for the acquisition.
The American IRA, LLC team can’t stress this enough. Do not cut it this close. The American IRA, LLC office probably gets two calls a week from a client panicked because they bought too much house, they don’t have enough money in the account, and at the end of the day the only option they really have is to make that contribution for the year to cover that balance.
As is always the case, the account holder needs to do the 'due diligence' on the asset that they’re purchasing.
American IRA, LLC was established in 2004 by James C. Hitt in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Mr. Hitt and his team have grown the company to over $250 million in assets under administration by educating the public that their self-directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more!
As a self-directed IRA administrator they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms ). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville, NC.