Rental Income w/ A Self Directed ROTH IRA

whichwayWhen I first started my Self Directed IRA the IRS said the most I could contribute to my IRA was just $2,000.   So I got started with $2,000 – and I am glad I did.

As my account grew, it didn’t take long for someone to point out the benefits of the ROTH IRA. The Roth IRA is different from a regular IRA in that when I decide to make withdrawals, the proceeds will be TAX FREE!

And that is a HUGE benefit, especially as tax rates have started to climb.I love the ability we have to invest in rental properties inside what’s known as a Roth IRA.

Mixing real estate with the benefits of the Roth IRA works something like this:

Buy a small townhome or condo in the name of your IRA.  Let’s say that cost you 100k.

Every month that home will have rental income.  Let’s say that is 1,000 every month.

That $1,000 of monthly income will go back into your Self Directed Roth IRA.   And that happens every month  until you sell the home.

So, let’s say that happens every year for 10 years.  Your total income will have been $120k. Of course you probably had to replace or repair something along the way, but you get the idea.

Now, watch what happens…..  What if you also made additional contributions to your Roth IRA every year too?  The IRS says that in 2013 and 2014 the maximum amount you can contribute to a Roth is $5,500.  You can find it posted here – http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits

If you kept all of your income, and then used your additional contributions, you could buy another 100k home in about 6 years.  Then you would have over $24k coming in every year.  10 years from now, you could easily own three homes – all inside your Roth IRA – giving you about $3,000 in monthly income.  If you decide to retire, I would imagine an extra $3,000 each month would help, wouldn’t it?

The best part is that if you retired and started to take some distributions from your Roth IRA – unlike a traditional IRA – the proceeds are TAX FREE!  That is a huge benefit, especially when you are retired.  Imagine starting the year knowing that you will have $36k coming in – tax free?  It’s not going to let you live the lifestyles of the rich and famous, but you won’t be destitute either.

But here is the best part…. you still have 3 homes inside your Roth IRA, with a value of $300k, or more, that you can tap into as needed.  Maybe you won’t want to hassle with 3 rental homes as a retiree.  At 36k per year, selling all three homes will give you a little more than 8 years of living expenses.   That’s not bad, is it?

This is exciting stuff, especially if you plan on having an active retirement,  You will likely need as much as possible stored away to keep up with the rising cost of living.  I know that my savings accounts aren’t going to give me the returns that my rental properties will – that’s for certain.

If you enjoy learning how you can protect and grow your net worth, you are going to love some more of these stories on Monday night.

Let’s talk about “Secrets of Self Directed IRA’s” this month at WREIA.  Come on out Monday night and join us at WREIA.

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Remember…We will have WREIA this month on this Monday, July 21st.

Same Place, Same Time.
You can meet us all at the same place at the Womans Club of Bethesda, and we will start at the same time, opening the doors at 6:30 for light refreshments and networking.
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“Secrets of Self Directed IRA’s”
 Register Here For The WREIA July Event

Join us at WREIA Monday night July 21st, and let me know if there is anything I can do to help you and your business.

John Peterson

301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Secrets of Self Directed IRA’s – July 21st Meeting – Jack Kiley

Next WREIA Meeting
Mon. July 21st –  Doors Open @ 6:30PM

Topic: Self Directed IRA’s w/ Jack Kiley
Updates: What You Need To Know In 2014

Warren Buffet said he would buy up “a couple hundred thousand” single family homes if it were practical to do so.

Mr. Buffet made these comments back in 2012 – and I’m sure he still believes it.  “If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down.” You can still find the article posted at  http://www.cnbc.com/id/46538421

Now, for most of us who do not run a large hedge fund, buying thousands of houses is out of the question.  However, owning a home or two tucked away inside a retirement account is not out of the question.

For starters, you should know that doing almost anything with real estate is just as easy inside a retirement account as it is outside of an IRA.

My friend Jack Kiley is going to give a short presentation on Monday night at WREIA.  He will be there to answer questions, and point out the situations where investors can use their retirement accounts alongside there traditional business.

Jack owns the company “Mid Atlantic IRA” which is the custodian of my Self Directed IRA.  Years ago, I did my research to find the best company in our area that could support my needs.  Even today, if you ask around, his name will keep coming back as the go-to guy in the DC area for Self Directed IRA’s.

I am incredibly grateful that his office is just up the road in Frederick, and when I have been in a jam he and his staff have been able to help on many occasions. As my business has grown, I have had to go to Jack with a few small business questions.  In every case, his answers have helped my business and my accounts grow.

And let me tell you how these accounts can grow – QUICKLY.

For example – Did you know you can use your Self Directed IRA to fund a wholesale deal?  One of our students used their IRA account to fund a deal with only $1,000.  They quickly wholesaled the deal to a rehabber for a 20k fee.   That 20k went directly into their IRA.

How many times in your career would you like your investment to grow 20X in just a matter of weeks?

You can see how fast you can grow your account large enough to buy a small townhouse, or maybe a small home out of our area.  Florida perhaps?  Yup, we have some WREIA members who have done that too.  Slow drips of monthly rental income….  Who doesn’t want that in your retirement years?  How many rental homes do you need to keep up your lifestyle when you retire? My answer is – not as many as Warren Buffet!

If you enjoy hearing how you can protect and grow your net worth, you are going to love some of these stories on Monday night.

Let’s talk about “Secrets of Self Directed IRA’s” this month at WREIA.  Come on out Monday night and join us at WREIA.

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Remember…

We will have WREIA this month on this Monday, July 21st.

Same Place, Same Time.

You can meet us all at the same place at the Womans Club of Bethesda, and we will start at the same time, opening the doors at 6:30 for light refreshments and networking.

*******


“Secrets of Self Directed IRA’s”

 Register Here For The WREIA July Event

Join us at WREIA Monday night July 21st, and let me know if there is anything I can do to help you and your business.

John Peterson

301-881-5541
Washington REIA Network, President

Profitable Property, Founder

P.S.  The answer is YES, in 2014 we are still doing partner deals with our students and WREIA members.  You may need some help with financing or need a valuable construction partner with years of experience. Or do you need us to help speed up the process for you, and help drive your business to the next level?   We are here to help.  Just send us a few quick details at http://dchardmoneylender.com/quick-property-submit/  and we will get back to you ASAP.