|Frequently Asked Questions|
What is a Real Estate IRA?
A Real Estate IRA is a vehicle that allows you to take your self-directed IRA funds and invest them in real estate as opposed to traditional IRA investments such as the stock market or mutual funds without losing your tax deferred benefits.
Nine Sages will locate the property and through its resources manage the property including leasing and maintenance.
As with any investment, you should consult with your tax professional, but Real Estate IRA’s provide the same tax-deferred and in the case of Roth IRA's, tax free benefits as traditional IRA’s.
Nine Sages will assemble each of the component parts required for creating, maintaining, and reporting Real Estate IRAs under one roof. This will enable both the individual investor as well as the pension fund manager access to this wonderful opportunity.
In a Real Estate IRA, you have the advantage of owning a specific building with specific tenants as opposed to just owning stock in a company that pays dividends on your stock. In a REIT, an investor owns stock in a company that purchases and manages a portfolio of real estate and then pays dividends back to the investor. The investor has no control in the properties being purchased and is subject to the potential failings of bad investments. With Nine Sages, an investor, through his IRA, to purchase individual properties and be able to "see and touch" his properties and thus help control the quality of the property and management.
Yes. You can be “partnered” with other investors thus allowing larger purchases for your investments and returns.
The answer is simple. Most people are not aware this opportunity even exists. Real Estate IRAs are extremely difficult for the ordinary investor to set up and even harder for the average investor to manage. Most tax lawyers and accountants have heard of Real Estate IRAs but are not versed in the many intricacies associated with Real Estate IRA’s. Typically, most people house their IRA with banks or stock brokers. They don't make money on Real Estate IRA's like they do on their funds, so they do not promote them.
Yes, Nine Sages will enable you to enjoy the benefits of owing both commercial and residential real estate.
Yes. All of the costs of renovation can be paid using IRA funds.
Normally, properties should be purchased outright and not financed as that may lead to issues with receiving taxable income. One method of avoiding the need to finance a property would be combining you IRA funds with someone else.
For many years corporations (large and small) as well as individual Americans have been using their retirement funds to invest in real estate using with IRAs, 401ks and other pension plans. But because most Americans have not been educated about their options, they might wonder, "Is this legal?" Well, quite simply, it is.
The Internal Revenue Service Publication 590 (dealing with IRAs), it states what investments are prohibited; these investments include artwork, stamps, rugs, antiques, and gems. All other investments, including stocks, bonds, mutual funds, real estate, mortgages, and private placements, are perfectly acceptable as long as IRS rules governing retirement plans are followed. (To view IRS Publication 590, you can visit the IRS's website and view Form 590.
We can also look to information provided on the IRS website. The following is an excerpt from an FAQ section about IRAs:
Q: Are there any
restrictions on the things I can invest my IRA in?
The law also does not permit IRA funds to be invested in life insurance contracts. See Code section 408(m) for additional investment restrictions. Finally, IRA trustees are permitted to impose additional restrictions on investments. For example, because of administrative burdens, many IRA trustees do not permit IRA owners to invest IRA funds in real estate. IRA law does not prohibit investing in real estate, but trustees are not required to offer real estate as an option.
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