Recently, I was introduced to a whole new world in Real Estate.
It’s nothing new but for me it seemed like it just started yesterday because I had no clue this even existed. I now have what’s called a Real Estate IRA that invests in Real Estate only.
Within this IRA I can only purchase direct ownership of an investment property.
This also means that I cannot purchase a primary residence or vacation home with my Real Estate IRA.
With this IRA, I can invest in different strategies like;
Private Mortgage (Notes)
Rental Properties
Land
Tax Liens
Fix and Flip Properties
New Construction
I have read and understand that there’s risk involved when investing in Real Estate, but I also understand that without risk comes no reward.
There are several benefits with using a Real Estate IRA as well.
When it comes to rental properties by purchasing the note your not changing toilets or chasing tenants. When something goes wrong in the rental the owner receives the call or they have a management company take care of it. Think of it like this whoever holds your note (mortgage) now, when something goes wrong in your house who gets the call. Not Chase Bank or whoever.
Another benefit if things do go wrong and you must proceed with foreclosure, you should’ve purchased the note at a discount leaving a good deal of equity in the spread. In today’s market, will we see a bubble burst, or will the interest rates continue to rise, that remains to be seen.
What I do know and have read in several books from well known authors is that during the down times in the market is when they became wealthier. Being able to buy Real Estate 35 cent on the dollar will position you in a very strong position when the market turns around, which we all have experienced one way or another.
Another benefit is cash flow. Prior to learning this method of a Real Estate IRA. My 401K was tied to the stock market. My 401K turned into a 201K. It was frustrating due to the fact there was nothing I could do about.
You have no control over your money it’s like window shopping in a sense. When the bubble popped in 2008 thru 2010 prices of real estate were slashed by 75% in some parts of the country.
But the amazing thing during that time, people still needed a place to live. Rents didn’t get slashed like the prices because it’s tied to the labor force and the surrounding areas but for the most part they continued striving.
So, cash flow is one of the most important ways to stay conservative as a Real Estate Investor. As long as the homeowner pays the note your cash flowing as the note holder.
With this new way of investing for me it’s like a breath of fresh air when I see the stock down and knowing my money is no longer tied to that is totally a game changer.
Another method that was mentioned is you can invest in notes from your Infinite Bank.
This alone can change the dynamics of your financial life.
For more information on Infinite Banking click the link below for a free consultation.
