Your IRA Can Be a Logical Way to Invest in Real Estate

 Many investors have become disenchanted with the stock market and it's ups and downs plus stories of corporate scandal and corruption. In addition to impacting retirement account values, these events have also strained investor confidence.

It is no wonder then that more and more investors are considering Self-Directed IRAs (SDIRAs) that allow them to invest in alternative, which they believe will provide greater diversification and control over their retirement nest eggs.

What You Should Consider

While the list of alternative investments includes a wide-ranging group of assets - including private equities, hedge funds and mortgages - one area that has captured the greatest level of interest is real estate.

Typically, real estate comprises 60% of clients' alternative asset investments. Some real estate gurus suggest that falling prices, combined with increasing inventory, is creating new investment opportunities.

As prices begin to fall, the pendulum may swing past center to create oversold conditions, providing opportunities to buy real estate at low prices. Some areas in the U.S. may already be starting to experience this phenomenon.

Another consideration is that many real estate investors are being squeezed out of the market due to the current credit crisis. This has created a unique opportunity for cash-rich retirement plan investors. These investors are either purchasing the real estate outright, through a partnership, or LLC. It is estimated that the first of more than 78 million baby boomers will begin to retire this year.

This group controls more than $14 trillion dollars in retirement plan assets. These assets are being "rolled-over" from employer-based plans to individual retirement accounts.

Many baby boomers have already begun to shift away from traditional equity investments to those that generate income, such as, income producing property.

Add these factors with the possibility of equity appreciation, and it is clear why real estate is growing in popularity.

As investors needs change, alternative assets and self-directed retirement accounts will become important tools to diversify and grow retirement wealth, see the resource box below.

The problem is your IRA to become self directed must go through a legal process so that you're not answering 10,000 emails from the IRS.

Some firms make a killing off of this process, as much as $5,000.00 up front and a host of other fees that could cost you another $5K.

An excellent resource is Commercial Funding Unlimited which has the capacity to do it right for a flat fee of 3% and believe me, they don't make a living off of these fees once your IRS is fully self directed.

To find out more details on how to fund your business or even get a down payment on a mortgage from your stocks see my resource box below.