We get asked questions from savvy investors we work with here at HAS Holdings LLC.
Most of the questions surround buying investment properties in Augusta GA … which we know a lot about.
However, one part of buying an investment property / rental property is how you will pay for it.
Can I use my IRA to buy local investment properties?
Self-Directed IRAs for Real Estate – Can You Use Them To Buy Augusta Rental Properties?
First off, an IRA refers to an individual retirement account.
IRAs traditionally hold investments like stocks, mutual funds, etc…. mainly because that’s the mainstream way most people save for retirement.
But, since you’re reading this article, you know that real estate can be a GREAT option for increasing your wealth.
But… how can you use your IRA to grow your retirement fund, earn the tax benefits of the IRA, and the benefits of Augusta real estate too?
Though investors are increasingly taking up self-directed IRA real estate, you should do certain things to ensure that the law is followed when you use your IRA for local GA real estate investments.
Some Simple SDIRA (Self-Directed IRA) for Real Estate Rules To Follow
No “Self Dealing”
If you’re using your self-directed IRA for real estate in Augusta you are forbidden from self-dealing.
Self-dealing is outlawed with your SD IRA because it can’t purchase land or property (both commercial and residential) for the owner or any family member to reside in.
It is also prohibited from selling property or land to the owner of the IRA or family members in business dealings in Augusta.
The Process of Buying Augusta with Your Self-Directed IRA
You have to follow particular rules if you’re using your SD IRA to pick up Augusta GA properties.
Once you provide the correct documentation for purchasing the local Augusta investment property to the self-directed IRA custodian, the custodian will start the purchasing process on behalf of the self-directed IRA real estate.
All the costs related to the property purchase are channeled through the self-directed IRA for real estate; hence it must have enough cash to pay for these costs.
Failure will lead to the forfeiture of tax benefits and the penalties to be paid by the IRA.
Choose The Type Of Self Directed IRA Wisely To Use It For Your Real Estate Investments
There are lots of options when it comes to self-directed IRAs.
Not all SD IRAs allow you to buy real estate in them, so you’ll have to do research to find the best SD IRA custodians to start buying Augusta properties in them.
NOTE: We’ve worked with many SD IRA companies and we’ve found the best providers who are very experienced in working with real estate within an IRA. Call us today at 706-873-1213 or email us through our Contact page and we can give you information on the best SD IRA companies for Augusta GA real estate investments.
Checkbook Control
Some Self Directed IRAs have more restrictions than others.
For example, some of them require that you submit the investment details to them, and they analyze it. then they send the cash from the account.
But some accounts give you what’s called “checkbook control”.
An investor in a self-directed IRA for real estate with control of the checkbook can make purchases by just writing checks rather than going through the lengthy process of passing it through the custodian first. This lets you take advantage of deals you have to act quickly on (which many of our local Augusta investment properties go fast).
Your Role In The Investment After The SD IRA Purchases It
As the owner of the self-directed IRA account, you can manage the investment hands-only. The roles include receiving checks for rent payments from tenants, managing the properties, etc… everything you’d normally do as the owner of an investment property.
Of course, there are more guidelines that you have to follow if you plan on using your self-directed IRA for real estate in Augusta… so make sure you do your homework and do these two things immediately:
- Find a great self-directed IRA company/custodian: This is the first step. It would be best to get this before purchasing anything through your IRA. If your current IRA holder won’t allow you to buy and hold real estate in it… Call us at 706-873-1213, and we’ll refer you to the best local custodians. They’ll be able to help you transfer your current IRA to your new self-directed IRA.
- Find great Augusta investment property experts like us at HAS Holdings LLC. One of the best ways to get great properties here in Augusta GA is by working with a professional investment property company like ours. We find high-discount properties (both single-family and multi-family) all around Augusta and sell them to investors like you at discounts so you can turn them into solid, profitable rental properties. Join our Preferred Buyers List Here >>
We Can Help You Get Rolling With Your SD IRA For Real Estate.
Contact us at the phone number below or email us… and we’ll walk you through the process, point you to the best SD IRA resources locally in Augusta, and get you on our Preferred Investment Property buyers list.