Ira Rollover Real Estate
August 12th, 2006
Question: Can a Roth IRA be opened fm rollovers of a IRA and 401k? Can I then invest the money in real estate?
Answer: You can rollover a 401k into a traditional ira once you have left a firm (some firms allow you to do this before you leave, but there’s probably no reason to). That traditional ira can then be converted into a ROTH ira. This means that you are going to pay taxes on all the money in the traditional IRA. This generally deters people from converting large traditional IRAs into ROTHs, since the taxes can be prohibitive.
Second question: Yes, you can invest in real estate within an ira. There are a select few firms that do this, you would have to search for them online. Remember a few things when doing this: You will have to have all the money to purchase a property outright in the IRA, since per IRS regulations you are not allowed to have a loan in an IRA. You CAN set up a partnership, with your IRA being one equal partner and yourself and equal partner. Then you can have a loan for yourself, but still not in the ira. Remember, we’re talking about quite a bit of money. Don’t try this unless you have a minimum of $250,000 in your IRA. Also remember that diversification is key. You want to have three or four properties, as well as stocks, bonds, mutual funds, etfs, etc. in the account.
Cadence Weapon – “Real Estate” video
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