Using Retirement Funds for Real Estate

Learn about putting your retirement funds to work in this highly informative discussion. By some measures, real estate has historically performed better than stocks, bonds and mutual funds. Josh Plave from Wall to Main discusses the ins and outs of retirement investing, including how to eliminate capital gains taxes.

Learn About:

What is a self-directed IRA?
Using existing retirement accounts to invest in real estate
Taxes involved when investing in multifamily with certain self-directed retirement accounts, and avoiding them in others
Who submits the tax forms?
Which states’ tax form do you submit? Where you live, where your LLC is, or the property?
Advantages of checkbook control
What is UDFI? What is UBIT?
What is the impact of UBIT on a typical investment? Does it ruin returns?
How can you avoid UBIT?
Why is multifamily a good fit for retirement accounts?
What are the requirements to open a Solo 401k?

Helpful Links

Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits by David Lindahl

I invest my retirement funds through Rocket Dollar and enjoy their service model and ease of use.

	Rocket Dollar
	Wall to Main

This article is not a substitute for professional, legal or financial advice. Please read Disclaimer.

Many of the links on this website leading you to products or services may be affiliate links from which I may receive compensation. These commissions help keep this website operating. I only promote products or services that I feel will truly deliver value to you. Thank you for your continuing support!

Bryce Cannon Witcher

Bryce is the founder of Actively Passive. He has over 20 years' experience in real estate investing, and began flipping houses in the historical districts of Phoenix, and also held rental properties for the long term. He believes that at our current level of technology, passive investors can now take part in opportunities from their couches in the comfort of their own homes. Bryce is passively invested in 82 apartment units across the US, and as a general partner, will soon be offering investment opportunities to friends and people within his personal and professional network.

Download

Definitions to the industry terms used on this website.

0 0 vote

Article Rating

0 Comments

Inline Feedbacks

View all comments

Start Here

Just getting started? This article will map out your learning experience.

Population Growth and Migration – What Does This Mean for Your Investment?

April 20, 2021 Data

Looking for places to invest, and looking at multifamily syndication investment opportunities? Seek out opportunities in high population growth. Growth in population creates demand for housing and helps keep rents maximized – and your investment.

How Much Real Estate Should be in Your Investment Portfolio?

April 19, 2021 Risk Mitigation

Blindly following traditional rules of thumb can leave the investor more exposed to unnecessary risk. The right allocation for you will depend on your risk tolerance, time horizon and additional factors specific to your unique situation. Let’s take a look at some things you might want to consider.

Good and Bad News on Using a Roth IRA to Invest in Real Estate

April 18, 2021 Income Tax

One of the coolest things about using a Roth IRA for investing in multifamily commercial real estate is that you do not pay any taxes on any gains. Find out how.

The Split – 2 Profitable ways to Share in a Project’s Return

March 3, 2021 Income Opportunities

When looking at different multifamily syndication investment opportunities, you need to be aware of the split. An offering will generally specify the percentage of profits and where they go.

5 Tips for Preserving and Increasing Your Net Worth

February 3, 2021 Income Risk Mitigation

Throughout all of his many investments over the years, and gaining investment momentum, a friend of mine has adhered to some guiding principles that he feels other people could use as well.

So… What are the tips?

Passive vs. Active Investments

January 13, 2021 Guest Article Income

Learn the differences between investment styles within active and passive investing, from day trading in stocks and options trading to multifamily syndication investing. There’s a vast spectrum in effort needed to succeed in each and everything in between.

Tax Benefits of Multifamily Syndication

January 6, 2021 Guest Article Tax

There are a number of powerful tax benefits that come with investing in real estate. It’s likely the number one benefit that are the massive deductions. Why do apartment investors get all of these great tax benefits? It’s because of government incentives.

Using Retirement Funds for Real Estate

January 3, 2021 Retirement Tax Video

Learn about putting your retirement funds to work in this highly informative discussion. By some measures, real estate has historically performed better than stocks, bonds and mutual funds.

Should you invest in Apartment Syndications or Single-Family Homes?

December 23, 2020 Guest Article Opportunities

Many people who have full-time jobs are lured in to the idea of passively owning rental homes and the promise of “mailbox money.” Which is better: Apartment syndications or single-family rentals?

Opportunity Zones – How to Defer or Eliminate Capital Gains

December 23, 2020 Opportunities Tax

Using opportunity zones to re-invest our unrealized capital gains into projects that help local communities, we can defer and sometimes eliminate taxes on capital gains. Opportunity zones are designed to spur economic development and job creation in distressed communities.

Start Here

December 13, 2020 Data Income Opportunities

So… You want to invest in real estate but your time is limited and you do not want to have to manage tenants, toilets and trash.

• The Top 16 Commercial Real Estate Terms That You Need to Know NOW

The Top 17 Commercial Real Estate Terms That You Need to Know NOW

December 4, 2020 Terms

Average Annual Return (AAR), Capitalization (Cap) Rate, Cash-on-Cash Return (CoC), Cost Segregation Study, Depreciation, Due Diligence, Forced Appreciation, Hurdle, Income Statement (T-12), Internal Rate of Return (IRR), Net Operating Income (NOI), Offering Memorandum, Preferred Return, Rent Roll, Schedule K-1, Value-Add Property

Liability Protection – CYA – Cover Your Assets.

November 28, 2020 Overview Risk Mitigation

I think you can interpret what I’m saying here. When you start investing in apartment complexes, you can expose yourself to needless risks in the form of tenant lawsuits. It is wise to do it the right way. Luckily, most syndications can offer several layers of protection.

Accredited Versus Sophisticated Investor – Which Are You?

November 21, 2020 Income Opportunities

Syndicators always ask their investors if they are accredited versus sophisticated investors, because it is required by law in the United States. Syndicators have to follow certain regulations set forth by the SEC in order to operate legally. There are 2 main categories of private placements, 506(b) and 506(c). Within these are certain restrictions affecting the kind of investors they can accept. This article will help explain which one you are.

8 Awesome Ways to Find Syndicators This Week

November 14, 2020 Syndicators

Many investors who hold well-paying careers or operate successful businesses, pick investing passively with multifamily syndicators. If you are one of those people, you are likely to have already found some sponsors, or you need help connecting with some. Let’s discuss how to find syndicators.

Quiz – Winner or Dud? – Choosing the Right Investment

November 7, 2020 Income Opportunities Overview

Once you make your connections with lots of good syndicators who have met your screening requirements, you will start receiving offers to participate in investment opportunities on a regular basis. I seem to get several each and every week in my email inbox. Most look too good to pass up, but with so much to choose from, you need to exercise discipline and only choose the best of the best.

Underwriting 101

October 30, 2020 Data Opportunities

Underwriting in the context of commercial real estate simply means researching all the extenuating factors of an investment and mitigating its risks by allocating resources appropriately. In English: Doing your homework… Learning everything you can, leaving no stone unturned, and figuring out what the cash flows will look like based on the available evidence.

How to Pick a Syndicator Getting to Know the Sponsors to Invest with Them Directly – Ask the Right Questions

How to Pick a Syndicator to Invest with Them Directly – Ask the Right Questions

October 23, 2020 Risk Mitigation Syndicators

Knowing how to pick a syndicator is a skill that every passive investor needs to hone. Before you evaluate syndication deal opportunities, you first need to evaluate the actual syndication teams. Good teams will usually have good deals, so if you are looking for opportunities, finding the team is the higher priority. But then, this article will show you what needs to happen next – the interview. Ask the right questions.

Finding Sponsors by Looking at SEC Filings – a Tutorial to Find Syndicators

October 16, 2020 Opportunities Syndicators

Now it is time to put on your detective hat to find syndicators. All syndicators in the United States are compelled to file their offerings with the Securities and Exchange Commission (SEC). This filing is a Notice of Sale of Unregistered Securities. Looking for these types of filings gives you a starting point for finding syndicators who have experience syndicating at least one project.

5 Multifamily Investment Opportunity Characteristics

October 9, 2020 Opportunities Risk Mitigation Terms

Each multifamily investment in a real estate project deal is unique, so it is sometimes difficult to compare them against each other. One way that you can do this is to compare the different characteristics of risk in order to make an informed decision on which one to invest in. You ultimately want to make sure that the riskier a project might be, that you are getting paid for that risk.

The Challenges of Active Real Estate Investing: Tenants, Toilets and Trash

October 2, 2020 Income Overview

Active real estate investing can be very difficult. This article will make you think twice about taking on such a huge responsibility, especially when you can get the same returns passively through syndications. When actively investing, you are responsible for finding opportunities, financing them, renovating them, and renting them out. Managing your property takes time from you since repairs and maintenance calls are inevitable.

What is Multifamily Commercial Real Estate?

September 26, 2020 Overview Terms

… any residential property consisting of 5 or more rental units. But there is a lot more to this that meets the eye. To truly understand how multifamily commercial real estate is defined, it is important to understand the context of where it fits within the myriad of commercial real estate types.

What to Expect During Your Passive Syndication Investment

What to Expect During Your Passive Real Estate Investment

September 19, 2020 Income Opportunities Retirement

Welcome to the world of passive real estate investing. The adventure continues. You have made a decision to invest in a syndication that offers great returns and with a team that you know, like and trust. Will it be a bumpy ride, or will the syndication team execute every aspect of their business plan flawlessly?

The Syndication Offering – What to Expect During an Investor Presentation

September 12, 2020 Opportunities Terms

A syndication offering – that is, a passive investment opportunity – can be a lot of information at once, but it is usually quite structured. If you are just starting out, you are probably not that familiar with what one entails. There are key topics that should be discussed by the syndicator, and presentations usually have everything addressed below but likely not in the same order.

A Rewarding Side Hustle – Make an Extra Income Outside of Your Day Job – Without Becoming a Landlord

September 5, 2020 Income Overview

So… You’re looking for an excellent side hustle and you want to invest in real estate, but do not have the time, energy or knowledge. You have heard that investing in multifamily rentals can be lucrative, if you only had the know-how and a huge down payment. Is there a way? Yes…

How Real Estate Crowdfunding is Making it Easier to Passively Invest in Syndications

August 28, 2020 Opportunities Syndicators Terms

Using a real estate crowdfunding platform enables you to leverage the crowdfunding site’s due diligence resources, allowing you to invest even more passively than ever before. See how investing in syndications can be simplified. Review the list of crowdfunding sites at the end.

Reviewing a Syndication Business Plan – Does it make sense to invest?

August 22, 2020 Data Opportunities

A real estate syndication business plan outlines how your investment will grow. Learn how returns are generated, preferred rates of return (if any), predicted profits at sale, use of funds, as well as overall plan of things to improve in order to force the value of the property higher. Topics include acquisition, improvements, holding period, refinancing, disposition or sale of the property.

Forced Appreciation – How It Works and Why We Like It

August 15, 2020 Income Opportunities Terms

Forced appreciation is the increase in the value of an investment property due to an investor’s actions, in this case, making it more profitable. Contrast this with natural appreciation, sometimes called market appreciation, where uncontrollable (by the investor) market forces are at play.

Preferred Return vs. Non-Preferred Return – Which One Should You Pick?

August 8, 2020 Income Terms

A preferred return is a return that puts you, an investor, in a preferred position when it comes to profit distribution of a project’s cash flow. Money goes to you first when there is a distribution, and until the hurdle of the preferred return is totally met, the syndicator gets nothing. A preferred position is first in line. If a project doesn’t make any money, chances are that you will not receive a return.

What is Passive Real Estate Investing?

August 1, 2020 Overview Syndicators

Passive real estate investments are automated income streams that do not have any associated management responsibilities. One of the main differences between passive and active real estate investing is the amount of continuing effort involved to sustain the health of the investment.

Depreciation and Why it Matters

July 24, 2020 Retirement Tax Terms

This accounting expense can seem almost magical, but as assets tend to wear out over time, we can account for that reduction in value, deducting the cost of an asset over its useful life. Contrary to popular belief, depreciation does not fully eliminate the need to pay taxes… But it can delay them substantially and there are great benefits along the way.

analyzing real estate investments Listening to the Data – Why is it important to verify demographics - Job Growth Median Income Crime Rates Home Value Growth Flood Zones Schools

7 Smart Hacks For Analyzing Real Estate Investments – Using Data to Verify Profit Potential

July 17, 2020 Data Terms

When you are analyzing real estate investments in which you might be passively investing, you should be using these data demographic hacks to learn about the neighborhood where that property is. Bad areas can make bad investments, BUT great demographic patterns increase the likelihood of success.

Understanding Returns CoC IRR AAR How Do They Differ

Understanding Returns – What Are CoC, IRR and AAR and How Do They Differ?

July 10, 2020 Income Terms

CoC stands for Cash-on-Cash Return, IRR means Internal Rate of Return, and AAR is Average Annual Return. They are all various measures of how profitable an investment might be, though have their own characteristics. Understanding returns, and the different metrics that are used, helps compare different investment opportunities.

14 Pros and Cons of Investing in Multifamily Syndications

July 3, 2020 Opportunities Risk Mitigation

Investing in multifamily syndications has long been accepted as a stable, recession-resistant investment. Great wealth has been created with commercial real estate like apartments. On the flip side, great losses have been experienced as well. As all investments carry inherent risk, the benefits and disadvantages should be weighed and considered.

How to Invest in Real Estate with IRA

June 27, 2020 Income Retirement

Invest in Real Estate with IRA? Possible? YES. Getting started can be very easy. Don’t be intimidated. Move your retirement funds into a self-directed retirement fund so that you can take advantage of IRS-approved investments opportunities.

multi-family real estate multifamily real estate class A class B class C class D

There are Different Classes of Multi-Family Real Estate – What are the ABCs?

June 20, 2020 Opportunities Terms

Each class of multi-family real estate implies different levels of risk, reward, challenge and value. When reviewing syndication offerings, these are often referred to as class A, class B, class C and even class D. The characteristic classes help classify a property based on geographic area and physical condition.

Stock Market vs. Passive Real Estate Investing

June 12, 2020 Income Overview

Which one is better, stock market vs. passive real estate investing? This has been a heated debate for quite a while. There are many pros and cons on each side, and unfortunately it is up to you to determine which risks and rewards you are willing to live with and hope for.

How to Earn Passive Income from Real Estate

June 5, 2020 Income Overview

We have been told by some that investing in real estate is a way to get rich quick. While this actually has happened to very few, this is not the norm. What you can count on though is that to earn passive income in real estate is a slow but steady way to accumulate wealth. There are usually many fewer surprises than when compared to the stock market.

managing investment risk Manage Risk Mitigation

Managing Investment Risk in Commercial Multifamily Real Estate

May 30, 2020 Risk Mitigation

Managing investment risk is unavoidable, especially in passive real estate investing. Generally speaking, the higher the risk, the higher potential reward. The opposite is also considered true. Avoiding absolutely all risk is unrealistic, so your job as an investor is to determine how much risk is acceptable to you, and the things you can do to minimize it.

Apartment Syndication Investing – What does a good opportunity look like?

May 15, 2020 Income Opportunities

You are ready for apartment syndication investing. You found several multifamily syndicators, like them and trust them based on their transparency and past performance. Two of the sponsors currently have projects they are working on and need to get funded. You have a difficult decision.

How to Read and Love a K-1 Tax Form

April 15, 2020 Tax Terms

As part of an IRS income tax filing, the Schedule K-1 tax form is the annual reporting that you will receive from the sponsor in a multifamily syndication. It is used to report income, gains, losses, deductions, credits, and the K-1 lists the beneficiary’s share of these incomes, deductions, credits.

Using Retirement Funds for Real Estate

Helpful Links

Bryce Cannon Witcher

SHARE

Categories

Archives