Buying Self Directed IRA Real Estate (individual Retirement Account)

The money was starting to build up in Shirley and Neil's Roth Ira (Individual Retirement Account) again, and they were both on the look out for a good investment. They had received a small windfall from the lottery, so they decided to take a weeks vacation in Mexico. They were having a great time and they were meeting some nice people. One night one of the couples mentioned that they had bought some beach front property here in Mexico, and they were thinking of retiring here when the time came. Shirley and Neil's ears pricked up when they heard this, as they thought this could fit in with their self directed IRA real estate plan, and they started asking the couple some questions. This is what they learned.

The couple told them that when people are on vacation often they do not do their due diligence and analysis and they let themselves be talked into buying an investment property that they later regret. In Mexico the native language is Spanish, and even though the locals may speak English, the laws of the country are Spanish. Being able to speak enough of the language to be able to hire a good lawyer is essential, especially if you are going to buy property. Mexico and every other country in central and south America has different rules when it comes to real estate and also taxes. The vesting of property varies from one country to another, so does the method of title transfer.

Let me tell you a little story. There was a property developer who went to Panama where he "Bought" land, took deposits for property, and began to subdivide the properties. The investors were told all that was needed was the consent of local officials to proceed with the development. In Panama the legal ownership must be registered with a central authority. The developer had only "bought" the land from the locals who only had right of possession. When he bought the land he did not follow the proper procedures for gaining title. The upshot of this was he could not get title to the land, the developer had to return all of the deposits his investors had given him. He was a sadder but wiser man.

The demand for some properties in Mexico has driven prices to the point where it is not viable to buy them, even using your self directed IRA real estate plan. Beach properties in Costa Rica are still available as second homes, or vacation homes, or even as investment properties. It is just a case of checking out the real economic situation. As beach front properties are at more of a premium, the prices are sure to increase as are the values. Also you need to think about tax, not just local tax, but Uncle Sam requires that all income be reported, and tax paid on a world wide basis. The more due diligence and planning that is performed the better. You can still buy property using your self directed IRA real estate plan, however, As everywhere, Let The Buyer Beware!

If all this seems too much trouble or you would sooner have a more of a TURNKEY solution to buying real estate with your IRA.. Go to the url at the foot of this article, from there go to my website, you will find much more information there.