Most retirement funds are invested in accounts through a brokerage firm or bank, which offers limited investment choices. Many people have been conditioned to think that only securitized investments like stocks, bonds, and mutual funds are the only options for investing their retirement dollars. That’s because most IRA administrators only offer products which they sell—which typically include stocks, bonds and mutual funds. Individuals who are unsatisfied with the returns these accounts earn often look for alternative investments, leading them to discover the self-directed IRA.
Additionally, individuals learn that by using self-directed IRAs, they can invest in other types of assets they possibly understand much better than those offered at more traditional institutions. Investing in what you know and understand can lead to higher returns within the retirement account. If your current IRA is not self-directed, you can roll over money from your current IRA into a “self-directed” IRA with no early withdrawal tax penalty. While major investment firms such as Vanguard and Fidelity Investments do not generally offer self-directed IRAs themselves, they will allow the transfer of your IRA funds to an established self-directed IRA custodian.
Self-directed IRAs that focus on real estate investments are often referred to as "Real Estate IRAs." With a Real Estate IRA, your retirement funds can invest in all kinds of real estate and real estate-related assets.
There are several ways to approach investing in real estate with your retirement funds but probably the most popular and easiest is to make an IRA investment as part of a partnership or LLC such as the investments available through American Landmark Properties. The IRA shares in the distributions and profits (or losses) of the entity in accordance with its percentage of ownership.
A direct investment involves purchasing a physical property and collecting the income generated within your self-directed retirement account. It is the simplest and quickest way to use liquid assets in your retirement account. Your IRA pays cash for the investment property and holds title to the property. Rules about prohibited transactions apply to direct real estate investments. Please make sure you understand these rules to avoid potentially significant tax penalties.
In a Real Estate IRA, the property becomes an asset of your IRA. This means your IRA owns it. You do not own it, personally.
Midland IRA—with over 25 years of experience—is available to facilitate your self-directed IRA investment with American Landmark Properties in compliance with Internal Revenue Service rules and regulations. You can open and fund your Midland account online and start investing within two weeks. Midland IRA’s dedicated client services team works with investors from start to finish during the account set-up and investment process, ensuring continuity and efficiency throughout the investment process. Investors can access their Midland IRA account on its online portal to view statements, tax records, make a distribution/contribution, and complete purchase transactions.
For more information, see our Self-Directed IRA FAQs.
NOTE: American Landmark Properties is not a tax professional, and therefore is not qualified to give tax advice on real estate investments. Investors should consult their tax professional regarding specific questions about real estate investments.