Can I Use My Self Directed IRA to Invest in Commercial Real Estate Loans?
Yes you can. Thousands of commercial loans are secured every day as people raise money for new business ventures, for re-investing in their businesses, and for purchasing existing businesses or just a piece of one.
The definition of commercial real estate is a piece of property that is used exclusively for business purposes. This includes warehouses, hotels, resorts, golf courses, storage facilities, office towers, malls, industrial parks, parking lots, etc. (any place where goods or services are sold).
Whether you are an individual investor, or a commercial real estate developer, you can fund your next or pending commercial development project from a self-directed Real Estate IRA.
Investing in commercial properties can be an excellent way to build wealth by coupling a commercial real estate loan with your IRA or 401k funds to purchase your next commercial real estate purchase.
The benefits to you include:
- Using retirement funds for all if not part of the down payment
- Financing the property without conflict with IRS codes
- Getting a reasonable salary for managing the project
- Having the net proceeds flow through to retirement accounts
- Developing flexible partnership allocations
There are no rules that prohibit investing in real estate for commercial or residential use. Most types of commercial real estate are eligible. This includes office space, golf courses, hotel and resort properties, tree farms, fisheries, and more.
If you want to invest in commercial real estate, and have an IRA or 401k, give us a call and we’ll help you determine the best way to get started.
