Whisper Talez (Tales)

With home foreclosures on the rise, those with money just sitting earning pennies in an IRA account can put their money to work for them. Why is now a great time to be investing in the foreclosure market? There are three reasons.

3 Reasons Now is a Great Time to Invest in the Foreclosure Market

Prices are Low Now: Every real estate investor will tell you that to make money investing in foreclosures, you need to find good deals. What is defined as a “good deal?” A simplistic answer is a good deal is one where you make money. Making money in real estate is all about equity; buying homes that have equity.

Presently, the market is being swamped with all kinds of properties that have lots of equity. Why? Two primary reasons can be cited. One, the economy is in a recession, which means many are losing their job. And two, Adjustable Rate Mortgages (ARMs) are coming due, which means mortgage payments are going up. Job loss plus higher mortgage payments means more homeowners are willing to negotiate, that is, if they haven’t already been foreclosed on.

Banks Don’t Want to Be Landlords: Piggybacking off the aforementioned point, banks don’t want to be landlords or property managers. As the market is flooded with more and more properties, banks are trying to sell them off as fast as they can.

Because they usually wind up losing money - in two different ways. First, there’s nobody paying the mortgage when house is sitting empty. This cost banks. Secondly, when a house is in foreclosure, the bank is responsible for keeping it up until it sells. This means hiring contractors to mow the lawn, fix broken windows, clean up and haul away traffic from previous owners, etc. So, they’re quite eager to sell, sell, sell.

Long-Term Gain: Real estate is a patient man’s game. If you use your Real Estate IRA to invest in foreclosures now while the marketing is bottoming out, so to speak, you’ll be well positioned to really maximize your investment when the real estate marketing gets red hot again.

By developing a full-fledged real estate investment strategy, you can use the funds from your Self Directed IRA LLC account to retire in a manner you never thought possible. To learn more about using a Self Directed IRA and maximize your retirement investment.

Most IRA custodians tend to be myopic when it comes to allowing you to place real estate inside your IRA account. Meaning, they try to limit what you can do with them.

As with most things that involves money, the WIIFM principle is at work. Most IRA account custodians are tied to a financial institution. Financial institutions promote financial products, on which custodians make commissions in most cases. Furthermore, in many cases there are transaction fees as well.

Hence, there’s an automatic built in conflict of interest.

One of the good things about Self Directed Real Estate IRA accounts is that custodians are not allowed to influence the investment decisions you make. They, in essence, take their instructions from you.

The job of the IRA custodian is to make sure you are in compliance with all the rules as it relates to IRA accounts, and to file the appropriate paperwork at the appropriate time. That’s it. Nothing more, nothing less.

So, if you want more control over your IRA funds, a Self Directed Real Estate IRA account may be just the thing.