Buying foreclosures with retirement funds provides real estate investors with tax benefits and the ability to diversify their retirement investing — in any market.
But in housing markets with a shortage of available inventory — as exists today in many parts of the country (see video below) — this strategy also gives investors an edge over other buyers relying on traditional financing.
“The main point is simply that this is a way to invest that the investor can obtain the funds for the down payment that they may not have,” said real estate investor, author and trainer Andy Heller. “It’s all about cash, that’s what the real estate game is all about.”
Lorraine Walls has used self-directed IRAs to purchase multiple foreclosed homes in Florida, and has been able to beat out competing buyers by offering a large down payment — if not full payment in cash — and a quick closing.
“Offer a high deposit and close within two weeks,” she said is her rule of thumb. “Offer them 50 percent, and bingo you’ll get it.”