Partnering IRA Funds: An Alternative Way to Fund Your Real Estate Investment

Did you know you can partner with other funding sources to increase your investment potential? Self-directed IRAs are the only retirement arrangements that allow individual investors the freedom to pursue alternative investments, such as real estate. Investing in real estate with a self-directed IRA offers many benefits to those who are looking for creative ways to save for the future. Investors have complete control over their investment choices. Unlike other IRAs, you’re not limited to stock, bonds or mutual funds. Self-directed IRAs provide the opportunity to save money for the future on a tax-deferred or tax-free basis. In addition, an IRA is considered a separate entity that can conduct business with others. This is a common strategy used in real estate investments. The process is fairly simple, but be sure to adhere to IRA regulations to avoid engaging in any prohibited transactions.

How do I partner with others to purchase real estate using a self-directed IRA?

  1. Identify the partner you would like to invest with.
  2. Perform your due diligence and confirm that the investment fits your strategy.
  3. Combine your self-directed IRA fund with other funds to purchase the property.
  4. Your IRA will own a percentage of the property and must be stated on the title when the transaction is recorded.
  5. All income and expenses (on a proportionate basis) from the property flow in and out of your IRA and not your personal finances.
  6. If the property is sold, your IRA receives the portion of the proceeds proportionate to the percentage of ownership.

A self-directed IRA can partner with anyone at the time of initial purchase, but after the transaction is complete, the IRA cannot conduct any business with a disqualified person. Doing this could lead to significant tax penalties.

The following people are considered disqualified persons:

  • You
  • Your spouse
  • Your lineal ascendants and descendants, and their spouses
  • Any person providing plan-related services (custodians, advisors, fiduciaries, administrators)
  • Any entity (business, corporation, partnership) of which you own at least 50 percent, whether directly or indirectly

What are the ways in which I can take advantage of the partnering strategy to help me save for retirement?

  1. Partner With Another Investor
    Investors are on the lookout for new opportunities, and networking with like-minded individuals can be a great way to find an investment partner. Partnering with a fellow investor offers the potential to learn from each other, as well as disperse risk between two people.
  1. Partner With a Relative
    While you are not allowed to buy from/sell to relatives, as they are considered disqualified persons for these purposes, you do have the option of partnering with them to purchase a new investment. This can be a great way to save for retirement together with a loved one.
  1. Partner With Yourself
    It is possible to partner your self-directed IRA funds with your personal savings for the purchase of a new asset, such as a real estate property.
  1. Partner With Another Self-Directed IRA
    Partner your account funds with the funds in another IRA to maximize your purchasing power. Find another motivated retirement investor to explore your possibilities.
  1. Partner With a Group
    Sometimes partnering with one account, one investor or only yourself will not provide enough funding for the investment you are interested in. In this case, you can partner with a group! Partnering can be a great tool for retirement investing, but it is important that you understand how to utilize this strategy for success.

It’s Easy to Get Started
All you have to do to get started is open an account and fund it. There are three ways to fund your self-directed IRA: transfer or rollover an existing retirement account, such as an employer’s 401(k), into a self-directed IRA; or make regular, annual contributions to your account. Once your account has cash in it, you can start investing immediately! As you read in this article, you can partner with other investors until you have enough cash to invest in real estate on your own. Download our free report about partnering your self-directed IRA with real estate here to learn more.

Disclaimer: Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor. Entrust does not endorse or recommend any of these investments. Proper due diligence by you, the IRA holder, is recommended before entering into any transaction.

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$685,000 :: 60525 BALMORAL WAY, Rochester MI, 48306-2064

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4 beds, 6 baths
Home size: 4,616 sq ft
Lot Size: 28,314 sq ft
Added: 07/16/18, Last Updated: 07/17/18
Property Type: Single Family
MLS Number: 21475548
Community: Washington Twp (50006)
Tract: MILLERS CROSSING
Status: Active

Stunning custom colonial home located just miles from Downtown Rochester. Small subdivision off the beaten path with 2 peaceful ponds & walking paths. Walk or ride your bike to Stony Creek Metro Park. Home sits on .65 acres, has large private yard, basketball court, large brick paver patio, fire pit & screened porch. Beautifully landscaped throughout front & back yard with exquisite views all year long. This house boasts an open floor plan & plenty of windows to view the beauty of nature surrounding this home with 4700 sq. ft plus 2523 sq. ft. in the walkout.Gorgeous custom kitchen with granite counter tops, matching custom table & access to the deck/screened porch, first floor laundry, dining room, walk in closets, custom molding & features throughout, 2 two-sided gas fireplaces, hardwood floors, central air, tall ceilings & 8 foot doors, custom library/office, 3 car side entrance entry garage, paved street, in ground sprinklers, theater room, extra large closets, Rochester Schools

Listed with First Choice Alliance LLC


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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Furniture And Home Decor Deals To Shop This Amazon Prime Day

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$216,000 :: 1419 TIVERTON, Rochester Hills MI, 48306

3 beds, 3 baths
Home size: 2,207 sq ft
Lot Size: 0 sq ft
Added: 07/15/18, Last Updated: 07/15/18
Property Type: Single Family
MLS Number: 689620
Community: Rochester Hills (63151)
Status: Sold

Listed with Real Estate One-Roch


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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$324,999 :: 5745 COBB CREEK Road, Oakland Township MI, 48306

4 beds, 2 baths
Home size: 2,504 sq ft
Lot Size: 39,639 sq ft
Added: 07/14/18, Last Updated: 07/14/18
Property Type: Single Family
MLS Number: 218065342
Community: Oakland Twp
Tract: SKYLINE NO 1
Status: Active

Welcome to country living near the city! Almost 1 acres of wooded property surrounds this contemporary home! Oakland Twp. Taxes with award winning Rochester Schools! 4 beds and 2 full baths. 2 decks to entertain on. Walk out access in the basement with a large living area. Newly renovated entry level bathroom. New roof in 2017 with gutter guards. Well pump new in 2016. This house is move in ready! Come enjoy perks of Rochester while being away from it all!

Listed with Century 21 Campbell Realty


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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$460,000 :: 1440 Otter Dr, Rochester Hills MI, 48306

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4 beds, 3 baths
Home size: 2,895 sq ft
Lot Size: 16,552 sq ft
Added: 05/21/18, Last Updated: 07/13/18
Property Type: Single Family
MLS Number: 31348123
Community: Rochester Hills (63151)
Tract: Cross Creekno 1
Status: Sold

Don’t miss your chance on this STUNNING colonial w/ finished 3 car garage, located in the desirable Cross Creek Sub! Enter the foyer w/ french doors leading to the living room w/ large bay window flooding the room w/ natural light, & addt’l french doors leading to the open family room w/ natural f/p w/ gas log inserts, & direct access to the deck overlooking the private backyard! Beautifully, updated, eat-in kitchen w/ granite countertops, SS appliances, TONS of cabinetry for storage, & butler’s pantry w/ wet bar & custom wine storage, leading to the formal dining room. This level has a laundry room &half bath. Upstairs is the master suite w/ high ceilings, dual sinks, jetted tub, &stand up shower, & 3 addt’l large bedrooms &full bath. Gorgeous finished basement w/ full kitchen, breakfast bar, exercise room & full bath, making this the perfect spot for entertaining! Addt’l features: new Generac whole house generator, Hardie Board siding, new roof, new deck w/ Sungard retractable awning

Listed with EXP Realty LLC


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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Is Amazon Embarking on Home Insurance?

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July 16 is Prime Day, and this year’s deals feature double discounts on Alexa-enabled smart home devices, including Echo, Fire TV and Fire tablets, Amazon reports. As the marketplace giant gets more and more involved in the lives of homeowners, could consumers start to see offshoots into other home-related services?

Amazon-run home insurance could be the company’s next endeavor, according to The Information, a technology website. Although Amazon has not yet provided concrete evidence for insurance plans, it would make sense due to the company’s most recent partnerships. From plans to create a line of robots to be used as homeowners’ personal assistants, to the latest collaboration with Lennar showrooms to promote its line of smart home products, Amazon is already deeply entrenched in the lives of homeowners.

The alleged reason for this possible next phase in Amazon’s services? The company’s various tech products could help monitor for dangers such as burglaries and fires, resulting in more affordable premiums, reports The Information. Amazon has already made moves into the healthcare industry to build out its medical supply business, so an insurance division isn’t outside the realm of possibility.

If Amazon did form its own insurance division, what would it look like? In order to beat out the competition, there may have to be a sizable price difference in premiums and an added catch for consumer convenience. A traditional financial model may not be feasible for a company that needs to juggle its Prime audience base, along with several other technological innovations, to stay relevant.

However, this could be more of a partnership than a foray into its own segment of home insurance. Since regulations vary by state, it would be difficult for Amazon to establish a national presence under its own umbrella without investing an abundance of time and money to maintain a legally intricate service. Another concern? Amazon would need to have the necessary funds available to create a pool of reserves for any upfront claims payments.

In order to cut costs, Amazon may be able to sell consumer information it gathers from its smart home devices—in December alone, the installed base of Amazon Echo devices in the U.S. amounted to 31 million units, according to Statista. This way, the company would be able to barter data in order to profit from already-established insurance institutions and further negotiate consumer discounts, similar to the way insurance companies currently provide credits to homeowners who have security systems installed at their properties.

According to Statista, the global smart home market will reach an estimated value of over $53 billion in the U.S. by 2022. Will future homes be run by Amazon? It’s starting to look that way.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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$738,750 :: 2775 Invitational Drive, Oakland Township MI, 48363

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Property Photo

4 beds, 3.1 baths
Home size: 3,611 sq ft
Lot Size: 0 sq ft
Added: 06/07/18, Last Updated: 07/11/18
Property Type: Single Family
MLS Number: 218046903
Community: Oakland Twp
Tract: Twin Lakes II Condo Occpn 1780
The price of this listing was last reduced on 7/11/2018 by 4%
Status: Active

AMAZING Newer construction loaded with upgrades!!! Why wait to build when you can have this spectacular executive home in Gated golf community of Twin Lakes!! Walk to the glorious 2 story foyer and hardwood floors Perfect for entertaining with great room and kitchen across the back of home. Luxurious gourmet kitchen with 42″ custom cabs and high end appliances appointed with granite.! 4 large bedrooms up with Huge master suite with spa like bath and large walk in closets. Jack n jill and guest suite! backing to the course with 2 story brick/cement deck unfinished walk out has many possibilities 3 car attached garage as well.

Virtual Tour: http://2775invitationaldrive.eproptour.com

Listed with Colburn McDonald Asoc, REALTOR®


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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$550,000 :: 1515 W BUELL RD, Oakland Township MI, 48363-2331

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Property Photo

4 beds, 5 baths
Home size: 3,483 sq ft
Lot Size: 114,998 sq ft
Added: 07/09/18, Last Updated: 07/10/18
Property Type: Single Family
MLS Number: 21471708
Community: Oakland Twp (63101)
Status: Active

Modern, spacious, custom built, contemporary home nestled on a lush, beautifully landscaped almost 3 acres. GREATLY REDUCED and MOVE-IN READY! Great room with fireplace, two-story windows and amazing views. Formal dining room, large office, sun room and powder room on the entry level. Enormous first floor master with dual WIC and four-piece master bath creates a private spa-like retreat. Upstairs three large bedrooms all w/ WIC and two additional full baths. Spacious eat-in kitchen with white cabinetry, granite counters, stainless appliances and new flooring. Private and tranquil enclosed backyard, stone entertaining patio, fire pit and ample space for a veggie garden. Enjoy viewing wildlife year round. 1800 sq ft steel engineered outbuilding which includes a 1200 sq ft shop insulated with heat and ceiling fan cooling & 600 sq ft office fully insulated with heat, a/c, electric, high speed internet, and cable ready. Plenty space for cars, boats, outdoor toys and home gym! Welcome home!

Listed with KW Metro


Brought to you by Janet Hull and Thomas Bush, Real Estate One, Inc.. Call me today at 1-855-Janet-Tom, or visit my website at www.JanetandThomas.com!


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Buyers: Challenged by Student Debt? Consider Down Payment Programs

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Student loan debt is one of the biggest factors impacting millennials’ ability to purchase a home. According to the National Association of REALTORS® (NAR), 80 percent of millennials do not own a home, and, of that, 83 percent say student loan debt is impacting their ability to buy. Millennials expect to be delayed from home-buying for a median of seven years, the NAR research shows.

There are alternatives, however, that millennials may not know about. In fact, according to a 2016 ATTOM Data Solutions survey, few buyers and real estate agents know about the close to 2,500—mostly local—down payment assistance programs. Across the 513 counties surveyed in the ATTOM Data Solutions report, buyers that used these programs saved, on average, $17,766 over the life of their loan.

From offerings that benefit first-time homebuyers to options for refinancing costly student loan interest rates, it’s important that today’s homebuyer is aware of all the viable options for purchasing a home.

What’s Out There?
For consumers who are having trouble saving for a large enough down payment, there are plenty of options that offer grants or down payment assistance. The National Homebuyers Fund (NHF), for example, has multi-state Down Payment Assistance (DPA) programs that offer closing assistance or down payment grants for up to 5 percent of the loan amount.

The U.S. Department of Agriculture (USDA) also has low- and no-down payment options via its Single Family Housing Guaranteed Loan Program, which assists lenders in offering low- and moderate-income households with purchasing opportunities in rural areas, for which closing costs and other related expenses can be rolled into the loan.

Additionally, there are more localized options available on a state-by-state basis. Here are a few examples:

  • Baltimore, Md./Washington, D.C. – The Maryland Mortgage Program offers a discounted mortgage rate and up to $5,000 in down payment assistance when consumers purchase in a sustainable community.
  • Ohio Grants for Grads offers reduced-rate mortgages for first-time homebuyers who’ve earned their associate, bachelor, master or doctorate degrees within the last four years.
  • Rhode Island – The First Down Program allows first-time homebuyers to purchase a one- to four-family home or condominium with down payment assistance of $7,500, forgivable after five years of owning the home as a primary residence.

More and more companies are introducing homebuyer assistance programs to tackle the student loan debt challenge that many of today’s buyers are facing, as well; however, buyers and agents should first consult a financial expert before participating in or recommending these programs. For example, the student loan cash-out refinance that multiple lenders offer, which allows homebuyers to use their equity to pay off high-interest student loans, may not make as much financial sense with the introduction of the new tax bill. as home equity financing is no longer tax-deductible.

With other incentive programs, such as the Eagle Home Mortgage’s Student Loan Debt Mortgage Program, homeowners can pay off outstanding student loan debt (up to $13,000 for this specific program) by redirecting 3 percent of their purchase price to student debt payoff when buying a new home from the home builder. Buyers should carefully assess whether these programs are financially worthwhile.

These are just a sampling of the available down payment assistance and grant programs that can help consumers with high student loan debt achieve their homeownership dream. It’s imperative that real estate agents research these offerings in order to assist consumers who believe homeownership is still out of reach.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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