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Pre-Construction Investment Opportunities with IRA or 401k
| | Sunday, June 10, 2007 @ 09:00 AM EDT
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Contributed by: Joshua Geary
Joshua Geary Properties
Read more archived articles about Squeezing More Profit
Nearly everyone has seen the "fix and flip" house remodeling shows that fill the airwaves these days or may have even heard of a friend of a friend making money at it. But who's really seeing a bulky return on their investment? New construction and pre-construction investors are.
You don't have to be a millionaire to invest in pre-construction. All you need
is free investment capital, someone with the ability to tie up good property, and someone who understands how to build a quality real estate product.
Many would say 'yes' to that kind of offer, but don't have free capital available to do so. But, what if they could use the capital locked up in their IRA or 401k plan?
Your IRA or 401k was meant for your future, right? It probably isn't growing at a rate that will maintain your current standard of living for 20 years. If you don't want to re-enter the workforce after you retire, consider alternative funding for your future.
An IRA LLC - a type of self directed IRA - converts the funds in your current retirement plan to an independently owned and operated entity. You control how the money is invested and which pre-construction projects you want to be a part of.
Buying Power
A new home that hits the market with a price tag of $300,000 requires financing of about $235,000 to build, depending on the region. The remaining $65,000 is the profit split among the investors and the builder. If you could turn $235,000 into $270,000 in 9 months (typical time from first permit application to "Home for Sale"), you'd be realizing a return rate of nearly 19% annually.
Don't have $235,000 sitting in the bank or your IRA and 401k combined? One of the great benefits of pre-construction investments is that multiple investors can join funds and realize the same rate of return. As your money grows exponentially with each investment, you'll soon find yourself able to invest in even larger projects.
More money to invest equals more access to pre-public releases of land deals, investments in high-end exclusive projects with an even greater profit margin and the power to get in at the ground level of emerging markets.
Choices Beyond Homes
How many "fix and flip" shows have you seen that start an office building or resort hotel? How many retirement condominium complexes? There are plenty of these types of buildings that need repair and may be able to turn a profit, but the typical fix and flipper must find the funding. Now that you know you can join your funds with others, you should also understand that the options don't end at homes in Anywhere, USA.
What Hawaii was thirty years ago, some say the coast of Mexico is today - a destination where your investment can see unbelievable returns in just a few short years. There will always be some new great vacation hot spot in the world that needs shopping centers, marinas, hotel resorts and, of course, homes to house the resident population. You can help fund these types of projects before construction begins and see your profits roll in as tourists flock.
Funding for the Future
Do you have a friend or family member in the construction business looking for funding for a custom home project? You can invest your retirement funds in the project. Profits are returned to the IRA LLC tax-deferred, where you can reinvest the profits and watch them grow even more.
Note: With market conditions similar to California in the early 1960s, Puerto Vallarta is becoming quickly know as the "Epicenter of Mexican Real Estate Development" in this decade.
About Asset Exchange Strategies, LLC
Using their knowledge of industry regulations, Asset Exchange Strategies is able to provide lower fees and greatly expanded investment options. They also enable investors to have greater control over self-directed IRA investment transactions and reduce investor risks and liability through the protection of a Self-Directed IRA LLC. Asset Exchange Strategies is online at http://www.MyRealEstateIRA.com.
About NAFEP
NAFEP is a privately held, for profit organization based in Salt Lake City, Utah. The company was formally launched on April 15, 1993. The original founder, Mike Janko, is President and Executive Director. NAFEP's® Board of Directors and separate Advisory Board contribute significant legal, estate, tax and business planning expertise to the organization. The primary business of NAFEP is two fold:
1.Provision of estate planning consultation and documents through a nationwide network of professional sales associates
2. A training and certification program for professionals known as Certified Estate Advisor®(CEA®). NAFEP professional sales associates are either attorneys, CPAs or financial planners who have completed their CEA®. NAFEP is online at http://www.NAFEP.com
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