| It has been said that there are only two sure things | | | | from the account. These are called 'traditional IRAs'. |
| in life: death and taxes. This is unacceptable. Since it | | | | Traditional IRAs are great, but for my money there's |
| doesn't do us much good to 'fear the reaper' (sorry | | | | an even better choice out there: ROTH IRAs |
| Blue Oyster Cult - I had to borrow it) let's focus on | | | | ROTH IRAs allow for tax free withdrawals of the |
| the other one - taxes | | | | investment and any gains (which could be as big as |
| If there's one thing better than making money, it's | | | | you want with real estate investing) provided the |
| keeping it. Taxes have been a part of life for the | | | | account has been open for at least 5 years and the |
| average American since 1913. Here is what the first | | | | account holder is over the age of 59 1/2. The money |
| tax form looked like: | | | | invested in a ROTH is 'after-tax' which means that |
| I guess folks didn't have it any better back in the | | | | you cannot get any kind of tax benefit when you |
| day either. On more than one occasion, I've tried to | | | | make the investment. But...tax free gains! C'mon - this |
| navigate this thing and...let's just say I'm glad that I | | | | is good stuff! |
| have a good accountant on my team! | | | | One thing to consider with ROTH IRAs is that the |
| Even though taxes have been a part of living and | | | | contributions may be limited for high-income earning |
| working in American for almost 100 years, there are | | | | households. Your private investors will have to work |
| some things you can do to minimize or eliminate your | | | | with their tax advisor on that part. But, for many |
| tax burden. And, perhaps just as important for real | | | | private investors, the thought of growing their |
| estate investors, you can use the tax laws to your | | | | money with you tax free is a great option. |
| advantage in a big way by using something called... a | | | | Part of bringing in private money is offering |
| Self-directed ROTH IRA. | | | | something that hits people at multiple levels. Keep in |
| Self-directed IRAs can be great tools to use for your | | | | mind that people buy on emotion and then justify |
| own personal retirement wealth creation. You can | | | | with logic. For instance, consider the Mercedes Benz |
| buy and hold and even flip houses in your IRA. Pretty | | | | buyer. The emotional appeal of a feeling of |
| cool stuff. And... | | | | achievement, status and prestige is primary and the |
| Secondly, self-directed IRAs are tremendously | | | | logic of precision engineering is secondary. With |
| powerful tools for bringing in private money. Most | | | | private investors, avoiding the gut-wrenching torment |
| people don't know that they can invest in real estate | | | | of the stock market and keeping more of the |
| using an IRA (which can provide tax-deferred or tax | | | | money they make can be great hooks to get them |
| free gains on investment). When they find out, it's | | | | coming to you with open wallets. |
| like a whole new world has been opened up to them. | | | | If you neglect to mention self-directed IRAs to |
| They might even realize that their financial planner | | | | potential investors, you're greatly limiting the money |
| hasn't been giving them a complete menu of options | | | | you will raise. I would even go so far as to say you |
| to choose from. | | | | should lead with this approach in many cases. |
| Most IRAs are set up as 'tax deferred' - which | | | | Using the tax free investment benefit of self-directed |
| means that the money that goes into the account | | | | ROTH IRAs is a great hook to raise capital. I suggest |
| can grow and compound each year without being | | | | implementing it yesterday. |
| taxed. Taxes are paid when the funds are withdrawn | | | | |