How to Use Your IRA to Buy an Investment Property in Arizona Real Estate Market

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Numerous investors in Arizona have discovered that they can utilize their IRAs in purchasing real estate.  By utilizing a self directed IRA, it is possible to invest in a multitude of properties including residential and commercial property.  Although purchasing property through an IRA can prove to be beneficial to your investment goals, the strategy should be implemented with a bit of caution and due diligence. The reasoning for this is that if you violate your IRA’s tax-deferred status, this will force you to pay taxes on the full value plus annoying penalties.  It would be wise before using your IRA to purchase Arizona real estate to speak to an Arizona investment property Realtor.

Owning Arizona investment properties inside your IRA can limit your typical tax advantages that may be available to you when investing in Arizona real estate.  Although there are success stories associated with using an IRA in purchasing Arizona investment properties, if you find this is something you are interested in doing, you should contact an investment realtor who can guide you on this journey while taking a lot of stress associated with this task out of the picture.

Under the direction of a good Arizona investment property Realtor, you should find an investment property.  It is highly recommended that you do not go to your Mutual Fund Company or local lending institution for help.  You should seek out an investment Realtor who specializes in this type of transaction and is qualified in getting you the best deal possible with the least amount of penalties involved.

Here are a few things to consider when using an IRA to buy an investment property:

1. Choose an administrator to be the trustee of your account.  The administrator will be in charge of helping you take out funds from your IRA while purchasing the Arizona investment properties on your behalf.

2. Find some Arizona real estate to invest in. You will be solely responsible for this task.  Choose your investment property carefully because the administrator will not be responsible for any losses accrued if you choose the wrong property.

3. Once you have the contract, take the contract to your administrator.  They will help you with the actual real estate transaction.

4. Secure additional financing if needed.  If you do not have the appropriate amount of funds in your IRA, additional financing is imperative.

5. After the purchase of your investment property, your IRA must supply the funds for any fix-up funds needed.

6. There are choices after purchasing Arizona investment properties.  (a) You can flip the home, (b) you can purchase and hold the property to increase the value or (c) you can turn the property into a rental.  If you choose the latter option, all the rental income must be made to your IRA while depositing the money into your account, which your administrator will take care of.

7. Your Arizona investment property Realtor will advise you that if you sell your investment property, the profits should always be funded back into your IRA.

This might seem like a difficult task in utilizing your IRA to purchase Arizona investment properties, but with a great investment property Realtor on your side, this task can prove successful.  Purchasing real estate with your IRA is a great idea and one which is a well-kept secret.

If you are looking to invest in Scottsdale homes or Phoenix homes please contact Scottsdale Realtor Jen Wehner today at 480-748-6925 OR email