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Self Directed IRA’s For Real Estate – What Are the Rules in Dallas-Fort Worth?

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A self-directed IRA can be a great investment vehicle even for real estate! Before you buy your next Dallas-Fort Worth investment property read this article first!

We get asked questions all the time from savvy investors who we work with here at TMC Property Solutions. Most of the questions surround buying investment properties in Dallas-Fort Worth, Texas. Which we, of course, know a lot about. The biggest question about buying an investment property or rental property is how will you pay for it and can you use your IRA to buy local investment properties?

Self-Directed IRAs for Real Estate – Can You Use Them to Buy Dallas-Fort Worth Rental Properties?

First off, IRA refers to an individual retirement account. Individual retirement accounts (IRAs) are tax-advantaged retirement savings accounts that people can utilize to save and invest for the future.

IRAs traditionally hold investments like stocks, mutual funds, bonds, etc. mainly because that’s the mainstream way most people save for retirement.

However, after reading this article, you will see that real estate can be a fantastic way to increase your wealth. So, how can you use your IRA to increase your retirement account funds while still taking advantage of the IRA's tax advantages and the advantages of the Dallas-Fort Worth real estate?

Although self-directed IRA real estate is becoming more popular, you should take some precautions to guarantee that the law is followed to the letter when using your IRA to invest in local Texas real estate.

Some simple Self-Directed IRA (SDIRA) rules for real estate to follow are:

No “Self-Dealing” -

Self-dealing is prohibited if you use your SDIRA to buy real estate. In the sense that your SDIRA can't purchase land or property (including commercial and residential) for the owner or any family member to live in, self-dealing is prohibited. In the course of business activities in Dallas-Fort Worth, it is also illegal to sell property or land to the IRA's owner or family members.

The Process of Buying Dallas-Fort Worth with Your Self-Directed IRA

You must follow the IRS rules when using your SDIRA to pick up Dallas-Fort Worth properties. Once you provide the correct documentation for purchasing an investment property to the IRA custodian, the custodian will start the purchasing process on behalf of the self-directed IRA real estate.

All the costs related to the property purchase are channeled through the self-directed IRA for real estate; hence it must have enough cash to pay for these costs. Failure of this will lead to the forfeiture of tax benefits and the penalties paid by the IRA.

Choose The Type of Self-Directed IRA Wisely to Use for Your Real Estate Investments

There are lots of options when it comes to self-directed IRAs. Not all SDIRAs allow you to buy real estate in them so you’ll have to do your research to find the best SDIRA custodians so you can start buying Dallas-Fort Worth investment properties in it. The SDIRA custodian we have used for close to 20 years is Equity Trust Company.

NOTE: We’ve worked with a few different SDIRA companies, and we’ve found the best providers are very experienced in working with real estate within an IRA. Call us today at (817) 599-8058 or contact us through our Contact page and we can give you information on the best SDIRA companies for Dallas-Fort Worth real estate investments.

Checkbook Control

Some Self-Directed IRAs have more restrictions than others. For example, some of them require that you submit the investment details to them, analyze them, then send the cash from the account. But some accounts give you what’s called “checkbook control.”

An investor in a self-directed IRA for real estate with control of the checkbook can make purchases by just writing checks rather than going through the lengthy process of having to pass it through the custodian first. This lets you take advantage of deals that you must act quickly on (which is many of our local Dallas-Fort Worth investment properties in today's market). On the other hand, having checkbook access can also get you in trouble if you aren’t very careful.

Your Role in The Investment After the SDIRA Purchases It

As the owner of the self-directed IRA account, you can manage the investment in a hands-on manner. The roles include receiving checks for rent payments from tenants, managing the properties, etc. Everything you’d normally do as the owner of an investment property.
Of course, there are more guidelines that you must follow if you plan on using your self-directed IRA for real estate in Dallas-Fort Worth so make sure you do your homework and do these two things immediately:

1. Find a great self-directed IRA company/custodian: This is the first step. You must get this in place before you even think about purchasing anything through your IRA. If your current IRA custodian doesn’t allow you to buy and hold real estate in it, call us at (817) 599-8058, and we’ll refer you to the best local custodians and they’ll be able to help you transfer your current IRA to your new self-directed IRA. Don’t wait until you find the deal and then try and set up your SDIRA. Do it NOW!

2. Find a couple of great Dallas-Fort Worth investment property experts such as TMC Property Solutions; one of the best ways to get excellent properties here in Dallas-Fort Worth is by working with a professional investment property company like ours. We find high discount properties (both single-family and multi-family) all around Dallas-Fort Worth and sell them to investors like you at discounts so you can turn them into solid profitable rental properties. 

We Can Help You Get Rolling with Your SDIRA For Real Estate. Just reach out to us at the phone number below or Contact Us here and we’ll walk you through the process, point you to the best SDIRA resources locally in Dallas-Fort Worth, and get you on our Preferred Investment Property buyers list.

Additionally, you can learn more about self-directed IRAs during our periodic training that the West DFW REI Group holds. Create your free account here.

Call Us for More Info on Buying Dallas-Fort Worth Investment Properties In Your IRA at (817) 599-8058.

The West DFW REI Group has been a great source for networking and learning how to start and grow their real estate investing business since 2009.  Come visit us here at www.WestDFWREIGroup.comthe "Watering Hole" for North Texas Real Estate Investors.



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