This is Part 2 of a 3 Part series exploring the relationship between “distressed” properties and Self Directed IRA real estate investing.

In Part 1, we took a look at the opportunity (for investors) created by foreclosures, short sales and REO (real estate owned) property.

Part 2 deals with the advantages of being a cash buyer utilizing a Self Directed IRA or 401(k).

Part 3 will explore having the “right plan” in place before the investment opportunity arises!

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Cash is king…especially when it comes to buying “distressed” properties, including foreclosures, short sales and REOs.

In today’s “upside down” real estate market, investors with cash have a distinct advantage over a competitor who would be obtaining a mortgage to complete a transaction.  The cash buyer is much more flexible and has the ability to act quickly.  Owners and lenders who are involved with foreclosed properties love this combination.

But, here’s a little secret. Retirement investors who have set up a Self Directed IRA, or a Solo 401(k), plan with checkbook control, have the same advantage as a cash buyer. Not only is cash immediately available, but these retirement investment plans also offer flexibility and spontaneous transactional ability.

How is that possible?  Because retirement funds have been moved to a checking account whereby the owner is able to execute a transaction on behalf of their retirement plan and write a check, or obtain a cashier’s check… immediately and without the delays of a 3^rd party review.

Many retirement investors question whether a Checkbook IRA (also known as an IRA LLC, Real Estate IRA LLC, Self Directed IRA LLC or Solo 401k) is necessary for investing in real estate.

Technically speaking, an investment can be made directly from a Self Directed IRA custodial account. However, when investing in distressed properties, it simply will not work.  Reaction time is everything, and custodial paperwork/process is not well-suited for moving rapidly.

For more extensive information regarding custodial vs Checkbook IRA investing, CLICK HERE.

To illustrate the “cash is king” position, you need look no further than this article from the San Francisco Chronicle on August 23, 2009:

‘Cash Is King’ In Market For Foreclosed Homes

Since January, Jay Nielsen has put in 10 bids (on foreclosed homes); “some were up to $80,000 over asking price and were still turned down,” said Nielsen, 41, a medical assistant. Each time, the banks selected offers from investors with all-cash offers – even when those offers were lower than his, Nielsen said.

“Cash is king right now,” said Glen Bell of Keller Williams Realty in Berkeley. For foreclosed homes, “a cash offer that hits the target price will many times trump a higher-priced offer with a loan. The ability to close has become just as important to banks as price. The prospect of a property being tied up longer, still on their books and then falling out is costly.”

Escrow closes quickly and easily with a cash offer, while offers with a mortgage often take 45 days or longer to close, and can fall through if the financing hits a snag. The result is that average consumers say they are being shut out because they can’t compete against deep-pocketed investors snapping up homes to rent out or flip.

Read the entire article here: ‘Cash Is King’ In Market For Foreclosed Homes.

If you are interested in giving yourself a competitive advantage, increasing your bargaining leverage, and growing your retirement wealth through investing in distressed properties with your self directed IRA or Solo 401(k), contact one of our expert IRA advisors today.  We’ll show you how you can join the scores of clients we have helped recently to take advantage of the fantastic opportunities out there in the world of distressed properties.

Safeguard Financial
877-229-9763
www.IRA123.com