Partner with other Self-Directed IRA investors and become an investment powerhouse!
Imagine looking for the perfect real estate deal or perhaps a really great business to invest in. Let’s say that you found it, the returns look great, and the risk is minimal. You take a look at the investment amount and realize that it is 10 times the amount that you actually have in your IRA. Most investors would be let down and think to themselves “How am I ever supposed to make the kind of returns I want to, if I don’t have hundreds of thousands of dollars ready to invest now?” On the other hand, the Self-Directed investor would rest assured knowing that he or she could invest without any problems.
The secret that the self-directed investor knows about is that you can actually partner with other self-directed IRAs on certain types of investments in a completely legal and IRS approved fashion. The simplest way to explain how this works is with a real estate transaction. Let’s say that there is a piece of property for sale that cost $200,000 and that you wanted to purchase that property in order to use it as a rental home. The only problem is that you only have $50,000 in your IRA. If you had a self-directed IRA then you could legally partner with other self-directed IRA owners and all go in on that property. The next step either finding other self-directed IRA owners or getting access to an investment network that finds multiple investors for you. (These types of investment networks do exist and USelfDirect can help you find one.) Now, let’s say that you found 3 other investors all with $50,000. Together you could purchase the property. Once the property was rented out then the rental income would be split proportionately amongst the investors, in this case, four 25% portions. That income would go right into your Self-Directed IRA.
The above example illustrates the basic formula to partnering with other Self-Directed IRAs. If you or someone you know is seriously considering this option, then we suggest you speak with a licensed professional in order to make sure that you are investing under legal and tax-healthy circumstances.
Ultimately, this is just one of the many powerful ways a Self-Directed IRA allows you to invest SMARTER. Using these types of investment methods will have you earning more money and eventually retiring the way that YOU want to. If you would like to learn more about how to partner with other IRAs or about other Self-Directed IRA benefits then please reach out to us today.
You can also find more information on our SD-IRA Basics page.