COMMERCIAL REAL ESTATE - Using Self-Directed IRAs To Buy, Hold and Sell Investment Real Estate

By Brent Greer

Did you know that self-directed IRAs are being used with increasingly frequency to purchase, hold, and sell investment real estate?

There are a number of advantages to doing so. If you have a piece of investment real estate you want to hold for income, your IRA can purchase the property. The title is held in the IRA, and is titled to the IRA. For example, if it were in my name, the title might read, "XYZ Trust Company Custodian For the Benefit of (FBO) Brent Greer IRA." Get it? Here are the major benefits: 1)Tax advantages -- When you sell you do not pay tax at that time because all the proceeds are kept inside the IRA. Any gain you have from the sale of real estate within your IRA will be tax-deferred (tax-free for a Roth IRA). 2)Access to capital - A frequent barrier to purchasing investment real estate is initial capital. But many people have money in their IRA that can be used to buy property for income (multi-family, commercial), raw land, even mobile homes. In addition, you do not have to own the entire property yourself. You can go into partnership with another investor.

For more detail on self-directed IRAS and commercial/investment real estate, I have a longer discussion of the possibilites on my CASH ON CASH Investment Blog. Click here to read the longer version of the above discussion.

Brent Greer is an investment specialist in Columbus, Ohio with Prudential CRES Commercial Real Estate. Brent represents buyers and sellers of income-producing properties, particularly multi-family, land and office, and consults on IRS 1031 tax-deferred exchanges. Email: bgreer@prudentialcrescolumbus.com