Archive for January, 2016

Why a Real Estate IRA in This Day and Age?

We live in a digital world. We log onto the Internet all the time, and check our stocks. In the information age, it can sometimes seem strange that you would ever want an IRA that included something of real value like real estate or gold and precious metals. In fact, some people aren’t even aware that they can include these investments in their retirement portfolio. Instead, they simply follow the traditional advice – which usually nets them a complete reliability on the strength of the stock market.

Why would anyone consider an alternative, like a Real Estate IRA? As it turns out, there are a lot of reasons. In fact, there are so many reasons that we can only list a few of them here. But as you’ll see, it’s not very difficult to understand the power of a Real Estate IRA; what’s difficult is seeing the signs out there that your retirement portfolio needs more than a few mutual funds.

A Real Estate IRA Can Help You Generate an Income After Retirement

Because real estate is so conducive to generating an income – you are, after all, frequently renting it out – it can be ideal for someone who wants an income in retirement but isn’t sure they’ll be able to rely on the traditional means. In your retirement days, you don’t want to simply withdraw money from an investment account and hope that you don’t outlive it – that’s essentially a savings account. An investment account should continue to generate money for you even after you withdraw some of it to live off of.

Not Everyone Trusts Social Security to Handle their Income

Many people these days rely on social security to get by. But the truth is, social security hasn’t always been around. People were able to generate retirement income for themselves before the days of social security. And if you don’t trust social security alone to provide yourself with the income you’ll need after retirement, then the time to take action is now. A Real Estate IRA is a great way to look at a different way of generating that income.

You May Well Outlive Your Retirement Account

As mentioned earlier, it’s important to make sure that you have a consistent investment that continues to generate value for you even after you’re done working. An investment account that essentially serves as a savings account won’t do you any good, especially in this day and age when many people can be in retirement for thirty years – and more!

Pensions Can No Longer Be Relied Upon

Although some fully-funded pensions out there are still able to offer a high degree of security after you retire, that doesn’t mean that pensions as a whole are doing the job of keeping retirees in income. A Real Estate IRA is another way to look at retirement income that doesn’t require that someone else fund it, which will help ensure that your own security is taken care of. It will also help you achieve peace of mind that many people, sadly, do not have.

Taking Action Now is Always Important

No matter what you do for retirement, you have to get planning now. After all, there are few ways you can plan for retirement the older you get; when you’re younger, however, you have more options available to you – options like Real Estate IRAs. Be sure to call us at 1-866-7500-IRA(472) if you want to know more about Self-Directed and Real Estate IRAs, and keep on browsing our site to learn more about how to secure a better future for yourself.

Jim HittJim Hitt is the Chief Executive Officer of American IRA and he has been committed to all aspects of investing for more than 30 years, using self-directed IRAs for his own investments since 1982. Jim’s forte is the financing and acquisition of real estate, private offerings, mortgage lending, business’s, joint ventures, partnerships and limited liability companies using creative techniques.

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Flipping is Illegal – Part 1

Oh No! All this time you’ve been telling me I could make a killing buying & selling (flipping) houses and now you’re telling me it’s illegal, Ron?

Well, sort of! But before you get all upset, I’d better explain. Don’t worry; you’re not going to jail. Here’s the deal. Illegal flipping is indeed illegal. But first, let’s define flipping because it is a misunderstood term, sort of like the term “nothing down.” When I say you can buy houses with nothing down, I mean you’re not using your own money. That doesn’t mean the seller doesn’t get money. Sometimes they don’t and sometimes they get cashed out. But, it is NOT your money; it’s a “nothing down” deal.

When you take over a loan “subject to” the mortgage, and the seller doesn’t want any money, it’s a nothing down deal. When you pay all cash but borrow the money from a private lender, it’s still considered a nothing down deal. Thousands of people don’t believe in the nothing down philosophy and aren’t doing real estate because they simply don’t understand the term, and therefore they’re convinced they can’t buy houses without their own money. Their loss. A closed mind and an open mouth will keep you broke and working for those who are willing to learn.

Just try and tell my Quick Start Real Estate Boot Camp grads (especially those who have become millionaires because they refuse to listen to the morons) you can’t buy houses without your own money. The same ignorance seems to be attaching itself to the term “flipping.” Totally misunderstood and misrepresented.

Here’s The Shocker.

Every house you buy and sell is a flipper. Whether you’re in wholesale, retail, sell- on-lease-option or owner financing, you’ve just flipped a house. Most people use the term when applied to wholesaling, but it’s all flipping. It’s either a fast flip or a slow flip, but it’s still a flip no matter how you look at it.

Ok Ron, so how come it’s illegal? The answer is, it’s not.

The term “flipping” seems to be used by the media in cases where an investor bought a property and sold it a short time later. However in all the cases I’ve read, fraud was a part of all their deals. These investors made a practice of illegal activities and got away with it long enough for the long arm of the law to catch up to them…then they instantly became a news item. Flipping houses is not illegal. Fraud is. So what kind of fraud did these guys get in trouble over?

Here’s A Short List of Possibilities.

  1. Paying appraisers to grossly appraise properties to get bigger loans for themselves or their buyers.
  1. Rigging down payments to put unqualified buyers in houses that shouldn’t be approved for the loan in which they’re applying for.
  1. Falsifying documents required to get a buyer approved such as pay stubs, verification of equipment, tax returns, verification of deposit, etc.
  1. Selling houses to unsophisticated buyers, representing them to be in good condition but covering up obvious problems to get the loan closed. This is the most abused type of fraud, and once discovered it leads to an investigation of all the investor’s activities and usually uncovers all other kinds of fraud.
  1. Back dating lease agreements to prove a track record of the tenant making payments on time and a year or more occupancy, when in reality the tenant just moved in. This is very common. I’ve had loan processors with large mortgage companies suggest I do it. The last time was on a $600,000 house. I asked the loan agent if he knew that was lender fraud. His reply was, “my boss said it was o.k. We do it all the time.”

Just remember this. Anytime the deal is different than the contract presented to the lender, it’s lender fraud. The loan is based on the stated facts. If you misrepresent those facts, it’s fraud. Regardless of how many other people participate in the process.

Come back next month and I will go more into detail about lender fraud and what it means to you and your real estate investing business.

Ron LeGrandRon LeGrand is the world’s leading expert in residential quick turn real estate and a prominent commercial property developer. Ron has bought and sold over 2,000 single family homes over the past 30 years, and currently owns commercial developments in nine states ranging from retail, office, warehouse, residential subdivisions and resorts.

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