Financing Rental Properties with an IRA

Cash buyers in the real estate industry rarely have to worry about putting up the funds to purchase an available property. For the common investor, alternative financing options must be explored in order to obtain a piece of property. Holders of retirement accounts do have options when it comes to buying rental properties in the U.S. The video below as well as the guide on this page provides an overview for financing rental properties with an IRA nationwide.

Fact: IRA Accounts Can Obtain Financing 

A retirement account is managed by a third party known as a trustee for a reason. Individual account holders cannot independently complete all the steps that are required in order to begin investing in different markets. A self-directed IRA is often the preferred choice to use when a purchase of a rental property is considered although a solo 401(k) can also be used. An IRA can generally obtain financing and JWB works with a private lender to help leverage the funds needed to buy an investment home.

Fact: Multiple Property Purchases are Possible 

Unlike a cash buyer who buys a single rental, a person can use a qualified IRA account to purchase one or more properties. As an example, a person with a $200,000 retirement account could actually purchase 2 $130,000 properties using the non-recourse loan method. The financing ($60,000) for the remainder will be tied the non-recourse loan that is provided by the private lender. This multiple buying method is used by most successful investors to take advantage of growing retirement account funds to buy real estate using the least amount of down payment funds necessary.

Fact: No Personal Credit Pulls on IRA Financing

Investing in other markets can often require more than one credit pull in order to make sure that a person qualifies for an investment financially. When an IRA is used to buy a rental home, no additional credit pulls are needed that could put a person with an average score into a lower level after a lender pull. This means that the IRA is responsible for the credit available and a person's credit report is not affected negatively through extra credit pulls.

Download: Free IRA Real Estate Investing Guide 

New investors can have a lot of questions before investing into an available rental home. JWB produces some of the most informative guides on the topic of retirement account investing that are available free of charge. Right on this page, a download button is available to access the current investment guide available. This guide offers a way to learn about strategies in use to build housing industry wealth using a variety of investment methods.

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