1031 & self-directed IRA class offerings in Phoenix

1031 Corporation will once again team up with Entrust Arizona for our three hour class Tax Deferred Real Estate Investing (AZ course #C0149) next Thursday January 14th and Friday, January 15th in Phoenix. I, along with Timarie McClendon of Entrust, will provide three hours of instruction on how you might benefit with tax savings on your real estate investments.

Both classes are offered from 10 AM to 1 PM and a free lunch (courtesy of Magnus Title) will be provided. The class on Thursday will be at Realty Executives' 36th and Campbell office. There is a $15 fee for attendees that are not Realty Executives agents. HomeSmart is hosting a class on Friday, January 15th that is also open to real estate professionals and investors. There is no fee for that class.

This is an educational seminar and not a marketing pitch. We benefit by getting our name out and you benefit from getting educated on 1031 exchanges and self-directed IRAs. The class is accredited by the Arizona Department of Real Estate for three (3) hours Legal Issues Continuing Education for Arizona licensed real estate professionals.

If you or someone you know is interested in learning about ways to invest in real estate on a tax-deferred basis, please encourage them to join us. It's credit toward your license renewal, a good education and a free lunch. Can't beat that deal!

Please contact Shari Griffin at 480.329.1335 or by emailing her at shari.griffin@magnustitle.com if you would like to attend. We look forward to seeing you there!

Buy Real Estate With Your IRA Or 401(k)

Since it's my birthday (not telling what number!), I thought I'd take the day off from blogging and publish an informative piece from one of our business partners. Entrust Arizona specializes in record keeping services for individuals and small business owners who wish to include non-traditional assets within their tax-deferred and tax-free portfolios. The following was provided by Timarie McClendon, director of business development with Entrust Arizona.

It’s a common misconception that the only investments allowed in an IRA or 401(k) is stocks, bonds, and mutual funds. The truth is that broader investment options, including real estate, have been available to the public since 1975. The key is to house your IRA or 401(k) at a company that will allow you to invest in real estate. All real estate investing with your IRA or 401(k) is legal - from single family residences to multi family, raw land, developed land, commercial property and even international real estate.

Self-directed retirement plans have quickly become the talk of the real estate community. Not only are real estate professionals self-directing their own IRA’s into property and projects, they are also using their knowledge about these plans to generate more business.

Don’t be confused by the marketing term “self-directed.” All brokerage firms will offer you their version of self directed. This means you can self directed your money into any of the stocks, bonds or mutual funds they offer. But…..that is where your investment choices end. Finding a truly self-directed administrative firm is not difficult. Some refer to this specific type of IRA as a “Real Estate IRA.” While this is not technically the legal description of a real estate investment within an IRA you can see how this might be the perfect description for the investor who is new to this option.

Understand these real estate investments are just that...investments. The real estate investment must be one that is an “arms-length” transaction. This means that the IRA account holder, as well as certain family members and business associates (disqualified persons), cannot live in a property, rent office space in a property, provide a service, or be involved in transactions in which the IRA buys or sells the property. The critical issue for many is making sure the property remains strictly an investment by avoiding self-dealing or prohibited transactions with family members or business associates. And an investor needs to be aware that all expenses, fees, etc. will have to be paid out of the IRA.

Retirement accounts can partner together in an investment. Utilize the investment power of multiple retirement accounts from people you trust and with whom you may already be doing business. Your IRA or 401(k) can even get a mortgage! You can partner your IRA with a 1031 exchange. You may also partner multiple IRA or 401(k) accounts or even partner personal monies!

You may hear false objections from uninformed advisors such as “that’s illegal”, “it’s too complicated” or “I’ve never heard of that.” Simply put, an IRA is a Trust. It’s that simple. If you understand a Trust, you understand an IRA. To simplify things even further, the IRS code is not written to specifically address what you CAN invest in. It is written to address what you CANNOT invest in. The IRS only prohibits two types of investment transactions - collectibles and life insurance.

You can use your retirement account to invest in real estate and harvest the same tax benefits of the IRA you may currently have invested in the stock market. Self-directed IRA administrative companies function just like your brokerage firms except that they specialize in alternative assets as opposed to securities.

For more information about self-directed IRAs and tax-deferred real estate investing, please take a look at Entrust Arizona's website or give them a call at (480) 306-8404.