How can you use your retirement accounts to invest in real estate? 401k and IRA’s can earn so much more than you were led to believe. Most people put their money into their account and they let it ride until they are 60 and can pull it out. You were taught to believe this is the only way to use your account because the people telling you that get paid a commission when you put your money in stocks and bonds. The IRS has a list of things you can invest your money in, including real estate and businesses.

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How to Start Investing with Retirement Funds

There are two ways to invest your money, actively or passively. Being a landlord is active, whether you have a property manager or not. There are always decisions to be made by you, the property owner. The bigger your portfolio gets the more involvement you’re going to have. You will be managing your property manager, making decisions about new carpet, asking yourself if you should file an eviction notice, deciding if it’s worth it to fight the city on this, etc. The passive side of real estate investing is being the leader – being the bank in other peoples deals. This is great for people that are busy, that don’t have time to be active. You’ll get a check every month based on a set interest rate that you decided on and that’s that. As a private lender, you go on with your life and just collect your payment.

  1. How do I get started?  
    1. If you’ve ever changed employers then you most likely have a 401k that needs to be rolled over to your new job. Or you can take that money and open up a Self-Directed IRA. There are no taxes to be paid to do this. Now, you can self direct where your money goes. Your money is not tied to the stock market, it’s free to go wherever.
  2. What are the restrictions?  
    1. Parents, spouses, grandparents, and children can not invest with you.
    2. All of the money within a deal has to come from the IRA and go back into it, but remember that it is penalty and tax free.
  3. Hire a third party property manager.  
    1. Keep things clean and get a third party property manager. Then you can avoid questions such as:
      1. Did you accidentally take money that should have gone into the IRA?
      2. Are you co-mingling?
      3. Where did the funds go? Where did they come from?
    2. Rent will go to the manager, all expenses will leave from them, and then the balance at the end of the month will go into your retirement account.
  4. Traditional or Roth?
    1. Traditional comes pre-taxed, meaning you don’t pay taxes on money to invest it. At the end of the day, when you pull it out, you will pay taxes on those funds.
    2. Roth’s are post-tax dollars, it grows tax-free, and when you pull it out later in life it is not taxed.
    3. Both have the same foundation. You can personally contribute up to $5,500 a year. You can roll over any amount you want from other accounts.


You can invest in whatever you want. Stocks, bonds, businesses, and real estate. You can invest actively in real estate by having the IRA be the owner of a property or you can invest passively by funding a project.

Don’t Forget!

If you love the returns of real estate investing, but don’t want to deal with any people, you have the option to be the bank. You can be part of a trust or a fund. Right now, I have a fund set up for accredited investors with over $5 million in assets. The fund has preferred interest and 70% profit sharing. Visit me at to find out if you have the opportunity to invest with us.

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