For the love of God, use your IRA! In this video, I’m going to show you that you have the perfect weapon at your disposal to invest in real estate. In this video, you’ll learn about accounts that your financial advisor doesn’t want you to know about for one simple reason; IT DOESN’T PAY THEM A COMMISSION! Check it out below and let us know if you have any questions!
www.OdellBarnesREO.com For the love of God, use your IRA! In this video, I’m going to show you that you have the perfect weapon at your disposal to invest in real estate.
Odell Barnes REO coming back at you, and today, I wanna talk to you about using your IRA to invest in real estate, and it is one of the coolest things that you can do because it has just tremendous tax advantages that allow you to keep more of your money, and a lot of people don’t realize that you can actually use your retirement account to invest in things other than the stock market, bonds, mutual funds, things like that. So your stockbroker isn’t going to tell you, neither is your financial advisor. Believe me, I was one for years. I never brought up using the self-directed IRA because it didn’t pay us, so you really wanna make sure that you’re educated on this, and talk to your CPA about it, or your accountant for disclosure. I am not one, but I understand the basic concepts of how this works, and you’re going to get some basic insight tonight on how you can use your IRA to really supercharge your retirement by investing in real estate.
So I’m gonna give you an example, and this is just a straight example, but let’s say for instance that I had $100,000. If I had either IRA or Roth IRA. Now in case you don’t know the difference between an IRA and a Roth IRA, basically, a traditional IRA will allow you to put money in before tax, and then at some point, when you pull the money out, you will be taxed at your tax bracket at that time. Roth IRA, my favorite IRA, will allow you to put money in after tax, and then you’re never taxed on that money again. So when you pull it out in the future, you could be in the zero percent tax bracket figuratively. So it’s a pretty cool tool. So let’s say for instance I take $100,000 that I have sitting in my IRA. I decide I’m going to buy a package or properties. So we buy properties in bulk from banks and auction companies, so we happen to do this all the time. So take this $100,000, and I’m going to buy a package of, let’s just say to make the math easier, 10 properties.
If I take those properties, and let’s say I’m into flipping properties, and I turn those properties over, and I make $50,000. So if I make $50,000 of profit, meaning I make all of my $100,000 back plus an additional 50,000, then that means if I’m not using this tool, an IRA, then I’m going to have to pay a short capital gains tax, which today, tax is regular income. So that could be anywhere from 15 to 35, almost 40 percent depending on where your tax bracket is. Now if I keep these properties longer than a year, my tax bracket falls down to 15 percent on the long term capital gains depending on what kind of income I’m going at. So it’s a significant savings if I hold onto these properties for at least a year, but I don’t wanna do that. My interest is getting the property, selling it, moving on, and repeating this process again and again.
So what this does is if I have, if I use my IRA to do this, I can take this money, 50,000, all 50,000 of it, and roll it back into my IRA. So I’m not going to be taxed right now at all. So if I have a traditional IRA, I’m going to put that 50,000 back in. Now I’ve got 150,000. At some point, I’m gonna have to pay tax when I pull that money out as regular income, but I’m not having to pay that short capital gains tax right now. So I figure if I’m in the 30 percent tax bracket, I could save myself $15,000 in taxes. Pretty cool. So if I had a Roth IRA, the power is incredible. I get to take that entire 50,000, put it back into my $100,000 Roth IRA, and I’ll never be taxed.
That is super, super powerful. It’s an amazing weapon if you’re a real estate investor. So if you’re not educated on how to use a self-directed IRA, there’s a lot of great companies out there that you can check out. NuView IRA is an example if you’re in Florida, but there’s self-directed IRA providers all over the country that can really help you out. So imagine compounding this number, just over and over and over again on a monthly or an annual basis, and you will see some significant return. So if you’re thinking about alternatives to the stock market, or bonds, or mutual funds, where you have a little bit more control over what happens with your money, this is a great thing to look at. One of the things that you give up when you invest in a stock or a mutual fund is you have no control over that.
You don’t control how they run the company, you don’t control which funds they pick, you don’t control the expenses per se, you don’t control the dips and all that, but here with real estate, [inaudible 00:05:21] I can touch it, I can feel it, it’s mine, I can turn it into income if I want to, and let me hit on that real quick before I close out. Let’s say for instance I don’t want to flip the property. I want to take that property and make into either a rental property or a seller-financed property. All the income that that kicks off every single month or every year goes back into my Roth IRA, and it goes back into tax-free. So if you’re in a position where you’re getting ready to retire, and income is a concern because now all of a sudden, I’m gonna be on a fixed income, this is an additional way to generate monthly income back into your IRA that you can pull out of, and have great tax advantages.
So if you’ve got questions about this, obviously, you can shoot us a message, and we’ll try to steer you in the right direction with some self-directed IRA providers that you can talk to, but also talk to your accountant, your CPA, and that’s some life, you’ve never told me about this. So I think it’s a great question to ask, and ask your financial advisor why they’ve never told you about it. I’ll tell you the answer: they will lose commission. That’s why they’re not telling you about it. So again, any questions about this strategy or investing in properties that we buy, or even bundling your own package of deals, you can definitely talk to us, and we’d love to answer any questions that you have to help you out if we can. Thanks for tuning in, I appreciate it. Have a good one.