3300 S. Parker Rd. #100
Denver, CO 80014
Licensed Colorado Real Estate
I’ve been getting a lot of phone calls in the last few days from all over Denver about the crazy stock market, since I had put out a video before about investing retirement money in real estate. I wanted to revisit that issue with the market getting crazy again.
We brought in our resident expert Josh about investing in real estate without the tax implications of pulling your money out of a 401k or an IRA. Let’s talk about the self-directed retirement account for real estate. It’s not a type of distribution wherein taxes are paid, it’s just a different type of account where you can purchase real estate within the retirement account.
With traditional accounts, you can purchase stocks and bonds and other publicly traded investments; with the self-directed account, you can purchase different assets like real estate, and it’s still within your retirement account. Somebody might choose to do this to avoid market volatility on Wall Street, or simple diversification. It can generate some potential cash flow and long-term appreciation.
There are however some restrictions and limitations from the IRS. For example, the real estate has to be investment-oriented in nature, so you can’t buy a property and use it, or have it used by immediate family members. You can’t buy property to or from your account. The IRS has these rules to avoid conflict of interest and self-dealing.
This is a retirement investment option that we’ve been really excited about. If you’re interested in learning more, we’d love to sit down and figure out your best course of action with you. Don’t hesitate to call or email us!