• Ken Holman

Now Is The Time To Invest In Real Estate With Your IRA and 401(k)

If you’re thinking that the stock market is overheated and too unpredictable, now may be the ideal time to sell some of the stock sitting in your IRA or 401(k) to real estate. Instead of making another big deposit into your 401(k) which is required to be done by the end of the year, you should consider setting up a Self-directed Individual 401(k) and transferring some of your retirement money into that account, which can be used to invest directly into real estate.

The same thing can happen for an IRA but it also must be done before the end of the year, even though you have until April 15, 2021 to make your contribution. That account is called a Self-directed IRA.

Self-directed plans are established with an IRS-approved, independent, Third-party administrators (TPAs) who handle the paperwork of the qualified plan. These TPAs are affiliated with a federally-insured custodian to safeguard your retirement funds until you, the account owner, decides which investments are suitable for your plan.

The benefits of having a Self-directed retirement account are significant. Although the contribution limits are the same as any other qualified retirement account, these plans can invest not only in the traditional investments of stocks and bonds, but you can also invest directly in real estate.

Often, stockbrokers and financial planners will claim that there are drawbacks to investing in real estate because the account owner cannot personally guarantee the loan which acquiring the asset, which lessens the advantage of investing directly in real estate and puts the investment at par with other unleveraged investments like stocks but there are ways around that limitation.

The best way to invest directly in real estate is through a sponsor. If the sponsor guarantees the loan, the Self-directed retirement account owner does not have to personally guarantee the loan, making the investment nonrecourse to the account owner. By investing with a sponsor, you can invest in leveraged real estate which significantly enhances your return.


Ken has been in the real estate business for over 40 years and has personally overseen the development and management of over $350 million worth of assets. Ken holds a B.S. degree in Accounting from Brigham Young University, a MBA from the University of Utah. Licensed real estate broker since 1976. He holds the following designations: CCIM, CPM, CRS,CCA. Served as the president of the Utah Apartment Association.

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