Investing with Self-Directed IRAs and 401(k)s
Of the $7 trillion dollars that are held in Individual Retirement Accounts only 2% are invested through Self-Directed Accounts; however the number of people converting to Self-Directed Accounts is growing exponentially, as more and more people are becoming aware of the opportunities offered by a Self-Directed IRA/401(k). Greystone provides real estate investment opportunities to IRA/ 401(k) account holders. We will first assist you in creating a Self-Directed IRA or Solo 401(k) account, and then guide you through the entire investment process.
What Makes the Self-Directed IRA/401(k) so special?
You are responsible for:
Your Administrator is Responsible for:
Tax-Free Scenario: The Power of Compound Interest
In this example, a 35-year old contributes $2,000 annually to his traditional IRA, until the age of 65: 30 contributions total $60,000. Assuming 10% annual return, this account will be worth over $400,275 at age 65!
Remember, this example is based on contributions to a traditional IRA. A traditional IRA is funded with before-tax dollars, which, in most cases, are tax deductible, and taxes are deferred until funds are distributed.
An even more powerful investment vehicle is the Roth IRA where contributions are made with after-tax dollars, so you don’t receive a deduction, BUT your earnings will not be taxed when you make a qualified distribution
Taxable Scenario: The Loss of Compound Interest
Let’s look at same investment made outside the IRA’s tax-deferred environment. We’ll use the same assumptions as above, except the individual’s investments would be subject to a 28% annual tax rate.
The total value of the same individual’s account at age 65 would be just $227,220. The federal, state and local governmental budgets he helps to support have claimed more than $170,000 of his profits.
Depending on the type of IRA, withdrawals from the account can be completely tax-free. There is no other investment vehicle that provides such powerful tax advantages that we know of in the United States.
Investing your Self-Directed IRA/401(k) the Greystone Way
Greystone will assist you in creating a Self-Directed IRA or Solo 401(k). Our team covers every aspect of the real estate investment process paying special attention to the rules governing the IRA/401(k) investment process.
You can decide on which of the 3 ways you wish to fund your investments: transfer funds, rollover funds from your IRA custodian or contribute new funding from your personal account.
We assist you by providing top-down, holistic perspective of the business risks associated with a real estate investment, including the costs of ownership and amount of liquidity required in your Self-Directed IRA/401(k) Account to allow for contingencies.
We can facilitate non-recourse financing for those who wish to avail themselves of the option of leveraging their purchase.
We will advise you on what type of account is best suited to hold the purchased asset. There are instances where you may be subject to taxes such as an Unrelated Business Income Tax (UBIT) when purchasing your property through an IRA account, but not if you purchase with non-recourse financing through a Solo 401(k) account.
We provide a complete breakdown of fees associated with the purchase through the Self-Directed IRA/401(k), and other fees such as closing costs, title insurance, and so on, and walk you through each fee and explain who is responsible for it and why.
We help you understand the length of time it takes for a new construction to start cash-flowing, and the safeguards and incentives we provide to our customers so that their down payment continues to perform during the construction process.
We have handled thousands of investments for Self-Directed IRA/401(k) investors from beginners to sophisticated investors alike, and tailor our approach uniquely to each individual so our Self-Directed IRA/401(k) account holders know that they are in good hands. If you would like more information on how to invest in Class “A” Real Estate through a Self-Directed IRA/401(k), please feel free to email us at: email@example.com or call one of our advisors on: or fill in the form below…
One of the most important things to be aware of when it comes to specifically investing with your IRA or 410k is that it has to be an investment property. This means that you and other disqualified persons such your immediate family, cannot occupy the investment. Here are some other important facts about owning property through an IRA or 401k.
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