Real Estate
14 articles
What is the workflow for buying real estate?
Your plan entity is the buyer at every stage from the first offer through the final closing. The checklist below gives you the key action and the critical compliance point for each phase of the transaction. Transaction checklist Phase Action Watch ...
How do I sign contracts as manager or trustee?
Two things must be true on every contract your plan enters: the entity is listed as the contracting party, and you sign in your designated role, not as an individual. Getting either of these wrong can create a prohibited transaction or title problem ...
How do I handle earnest money deposits (EMD)?
The earnest money deposit must come from your plan entity's bank account. No exceptions. Why personal funds are not an option Paying the EMD from your personal funds, even with the intention of reimbursing yourself later, constitutes an extension of ...
Can my plan use a mortgage to purchase real estate?
Yes. Your IRA or Solo 401(k) can use financing to purchase real estate. The ability to bring leverage into a tax-sheltered retirement plan is one of the most powerful wealth-building tools available to self-directed investors. Your plan can extend ...
What is a non-recourse loan?
A non-recourse loan is one where the lender's only security is the collateral - typically the property itself. If the borrower defaults, the lender can seize the collateral but has no claim against the borrower's other assets. No personal guarantee ...
Can my plan partner with others to purchase real estate?
Yes. Your plan can co-invest with other parties to purchase real estate in a variety of structures. Partnering allows your plan to access larger deals, share risk, and leverage professional management without committing the full purchase price from a ...
Can my plan buy foreign real estate?
Yes. A self-directed IRA or Solo 401(k) can invest in real property located outside the United States. For investors with specific knowledge of a foreign market, through prior residence, family connections, or professional experience, it can be a ...
How do I invest in Tax Liens & Deeds?
Your plan bids at a county tax sale the same way any other bidder does, with one difference that governs every step: the plan entity is the buyer, and every dollar in and out moves through the plan's own account. Getting the sequence right matters ...
Do I need an LLC for tax lien & deed investing?
No. Tax lien and deed investing can be executed directly through an IRA Trust or Solo 401(k) trust without an LLC. Whether an LLC makes sense depends on whether your plan ends up holding real property. For lien-focused investing, a trust is ...
Do I have to hire a property manager?
No. You can self-manage a plan-owned rental property. Whether to hire a property manager or handle it yourself is a practical decision, but IRS rules create an important boundary on what self-management actually means for a retirement plan. What ...
How do I pay expenses and receive rent?
All expenses are paid from the plan entity account. All income is deposited to the plan entity account. Those two rules cover the full picture. Paying expenses Write a check, use the entity debit card, or wire funds directly from your plan entity ...
What kind of property insurance does my plan need?
Plan-owned real estate requires the same types of insurance as any investment property: hazard coverage and liability coverage. The critical difference is that the policy must be issued in the name of the plan entity, not in your personal name. The ...
Can my plan buy raw land?
Yes. An IRA or Solo 401(k) can purchase raw land, agricultural land, timber land, and similar undeveloped parcels. Land is a real asset that can hold value through economic cycles and appreciate over time, particularly as development expands or land ...
What if I find a deal before my plan is ready?
The short answer: do not use personal funds or sign a contract in your own name. Once you do either, that property cannot be acquired by your plan. IRS rules prohibit any direct or indirect transaction between a retirement plan and a disqualified ...