Many investors have become disenchanted with recent stock market volatility, stories of corporate scandal and corruption. In addition to impacting retirement account values, these events have also strained investor confidence. It is no wonder then that more and more investors are pushing their advisers to offer Self-Directed IRAs (SDIRAs) that allow them to invest in alternative assets which they believe will provide greater diversification and control over their retirement nest eggs.
While the list of alternative investments includes a wide-ranging group of assets including private equities, hedge funds and mortgages, one area that has captured the greatest level of interest is real estate.
I believe, that falling prices, combined with increasing inventory, is creating new investment opportunities in real estate. As prices have fallen, the pendulum has swung past center to create oversold conditions, providing opportunities to buy real estate at low prices. Some areas in the U.S. have been experience this phenomenon for almost three years now.
Another factor to consider is that many real estate investors are being squeezed out of the market due to the current credit crisis. This has created a unique opportunity for cash-rich retirement plan investors. These investors are either purchasing the real estate outright, using a partnership or LLC. It is estimated that the first of more than 78 million baby boomers will begin to retire this year. This group controls more than $14 trillion dollars in retirement plan assets. These assets are being “rolled-over” from employer-based plans to individual retirement accounts. Many baby boomers have already begun to shift away from traditional equity investments to those that generate income, such as, income producing property. Add these factors with the possibility of equity appreciation, and it is clear why real estate is growing in popularity.
Just like doing all your research to select the perfect property to purchase includes knowing the market, good real estate comps, and knowing an exit strategy; finding the right SDIRA takes a little expertise. After the proper SDIRA custodian has been selected, the investor should request and complete the appropriate forms for their Traditional, Roth, SEP, Simple, Individual 401(k) or other qualified plan(s). The good SDIRA adviser will guide you through this process and make the process seamless for investors.
Ongoing market volatility, combined with the need of baby boomers to generate income, and retire securely, is causing investors of all shapes and sizes to take a hard look at their investment allocations to ensure there is a proper mix of opportunity and risk. As investors needs change, alternative assets and self-directed retirement accounts will become important tools to diversify and grow retirement wealth.
If you need to help with finding awesome investmetnts in real estate contact me @ 925-219-5144 or samparwiz@gmail.com.
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