Re Agents -- Increase Commissions Through Self-directed Accounts

I have had several classes that I have conducted with RE agents about how they can increase their commissions, educate their clients and do something good for their clients....all at the same time. In fact, the topic that I share doesn't even cost an agent anything.

So, what is this cost-free tool that an agent can introduce to their clients?


Informing Clients About the Possibility of Using IRA/401(k) Assets to Invest in Real Estate -- Voila!!

IRS Code 408(a) does not stipulate what you can invest in. But, it does stipulate what you cannot invest in. Check out an upcoming blog on the types of investments you can make, but suffice it to say that the Code does restrict an IRA/401(k) from investing in life insurance contracts and collectibles. Collectibles are defined per the IRS as:

Collectibles. These include:
Artworks,
Rugs,
Antiques,
Metals,
Gems,
Stamps,
Coins,
Alcoholic beverages, and
certain other tangible personal property.

Nothing prevents an indvidual from investing in Real Estate with their IRA/401(k) as long as it is set up correctly. Nothing.

But, is this legal.....absolutely, and has been since 1974.
Why doesn't my stock broker tell me this is legal....uhm, well let's put it this way -- 1) they probably don't know that an individual can do it, and 2) since they are paid commissions for stocks, bonds and mutual funds, why would they want to tell you that you can do this? Answer..they don't want to tell you.

So, now you can ask your client:
a) If you could invest in real estate using your IRA or 401(k) accounts, would you be interested? Obviously, if they are interested, what is your NEXT course of action?
b) If they are interested in this possibility, they will most likely need assistance in setting up either a SD IRA or 401(k).

In future blog postings, I will advise you on how there are other ways both you and your clients can benefit from having retirement assets in SD status. The box is definitely bigger!

Put your relationships to work. Leverage your abilities and your clients to make a win-win situation for both of you.

By: John Park

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John R. Park is President of PGI SelfDirected (www.pgiselfdirected.com) and co-founding Partner of Fulcrum Investment Network (www.fulcruminvestmentnetwork.com).

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