Skip to Content

Financing a Temecula Investment Property with a Self-Directed IRA

Many people aspire to bankroll aTemecula rental investor calculating funds Temecula investment property. However, they believe that it would cost them a large amount of cash in doing it. They are not aware that getting funds for a rental property purchase is more convenient than expected.

Major Factors

To achieve this, there are two components to consider. The first one centers on utilizing your Individual Retirement Account (IRA). Here, you can invest your self-directed IRA in mutual funds, bonds, or real estate, or other ventures.

Doing this gives you the opportunity to diversify your portfolio. Aside from that, it gives you an investment that doesn’t associate with stocks or bond prices. Second, you can purchase real estate using leverage as you take a mortgage out. You obtain all the appreciation and long-term rental price growths from the property investment despite investing only 20% toward the property’s total expenses. With the proper purchase and handling and the right Temecula investment property, you could reclaim all your operating costs, plus the mortgage, through the money your tenant pays to you.

Individual Retirement Account (IRA)

At this point, create an account with an IRA custodian. You can set up your account in Community National Bank, Equity Trust, IRA Services Trust Company, or others that you can find in Google. Your existing IRA or a rollover 401K minus the tax penalties can fund your new IRA account.

Once you have a Temecula investment property of choice, give your custodian a direction of investment form, ask for approval, and request the funds. The property’s title must be under the name of your IRA. As a result, the custodian then holds title to assets and issue funds.

The entirety of expenses and revenue associated with your investment must be made through and delivered to your IRA custodian account. When you prepare to sell your property, proceeds from the sale remain in your IRA. This means that taxes on profits and appreciation are delayed to the future when you begin drawing funds from your IRA.

One Drawback

One limitation of using a self-directed IRA to buy a Temecula investment property is that you cannot manage the property on your own.  You must have a professional team like Realevate Specialists with you.  You will pay your IRA custodian for the up-front fees or ongoing maintenance fees. Dependent upon your IRA portfolio value, these fees may range from a couple hundred dollars per year to a couple thousand. The marketplace is becoming increasingly more competitive so you must evaluate multiple custodians for their fees, service levels, and credentials.

In planning to come up with a real estate investment portfolio, your IRA might give the funds that you need. Determine your balance and find out how real estate could fit into your total investment portfolio. If it sheds light, hire the right IRA custodian and execute your plans.  You will then thank yourself during retirement because you pursued one of the most stable investments now – real estate.

If you would like more information about Realevate Specialists’ property management services, please contact us online or call our Mission Valley office at 858-997-2100 or our Temecula office at 951-461-0100.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details