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IRA Rental Property Investing

IRA Rental Property Investing

J. David Lampe, RealtorDid you know that you can buy rental property with your IRA?

I have found a way that will help me to retire comfortably in
20 years and it can work for you too.

Here’s how it works:
1. Set up a self-directed IRA.
2. Transfer your current IRA or 401K assets to your self-directed IRA.
3. Find a property.
4. Purchase the property (You will need to leave enough cash in your new IRA to cover expenses for the first few months).
5. Rent the property to tenants.

There are hundreds of rental properties currently for sale in the Denver Metro area with great potential for allowing you to retire.

Here is one example:
3736-3740 Milwaukee St. Denver
•$109K current list price as of 11/12/2010
•30% down payment = $33,000, $76,000 loan
•5% interest on 20 year fixed rate loan
•Total Monthly Payment ~ $650 Principal, Interest and Taxes Included
•Both units have 2 bedrooms, 1 bathroom
•Monthly rent per unit is currently $675, total monthly rent is $1,350
•Positive monthly cash flow = $700!!!
•During the next 20 years I would accumulate approximately $8,400 per year in rental income for a total of $168,000.
•When I retire in 20 years I will have paid off the mortgage and will then have $1,350 in monthly income from this property assuming rental rates stay the same over the next 20 years. I will also be able to start withdrawing from the $168,000 balance in my IRA.
•That’s over $2,000 per month in income for my retirement from just this one property.
•It doesn’t matter if home prices fall, I’m buying for the positive cash flow and the rental income for retirement.
•This works for any retirement horizon – if you want to retire in 10 years, you get a
10-year loan. If you want to retire in 30 years, you get a 30-year loan.

How to get started:
1. Find a REALTOR® knowledgeable about buying rental property with an IRA.
2. Get your IRA set up and ready to go.
3. Start looking for a good deal on a rental property.

Retire when you want with enough income to live comfortably.

Home prices in the Denver Metro area are lower than the peak in 2007.

You can now purchase rental property for a lower price than you could a few years ago.

It’s currently a buyer’s market in the Denver Metro area.


Rental vacancy rates are extremely low.

Low vacancy rates = rents going up.

It’s easy to find tenants for your rental property.


Rents for all types of rental property in the Denver Metro area are going up.

The average rent for a 2 bedroom, 1 bathroom unit has gone from $780 in 2005 to $900 in 2010.


Mortgage interest rates are at all-time lows.

Current rates for investment rental property are around 5%.

Many experts say that these low rates will not last forever.

There has never been a better time to buy rental property in the Denver Metro area!