Retirement is something that almost every working person looks forward to as the culmination of their hard work. Everyone expects that at a certain age, they’ll be able to stop working and enjoy the rest of their lives employing their time in whatever way they see fit. The problem is that too many Americans avoid preparing for retirement either because they can’t or that they simply don’t know how. A good place to start is with a self directed individual retirement account (IRA), since owners have more freedom in diversifying their investments and making investment decisions.
One way that people help fund their retirements with their IRA is buying real estate, and the only way to do this is with non recourse loans. A non recourse loan agreement basically involves a borrower and a non recourse lender. The borrower puts up some sort of real property, and non recourse loan lenders can only seize that property and nothing else in the case that the borrower defaults on the loan. Here are three types of property that a person can buy with an IRA non recourse loans.
Commercial property
Commercial property is basically any property that the owner will be able to rent out but is not residential. People do not live in commercial properties. These are usually used for office buildings, businesses, and restaurants.
Multi unit housing
Another type of income property that a person can buy with their IRA loan is multi unit housing. The refers to things like apartment buildings (which may also fall into the commercial property category, depending on the size) and houses that are split into two or more residential units which often create a larger source of income than a single family home would.
Agricultural land
The last type of income property that can be purchased with a non recourse IRA loan is agricultural land, which is not used for businesses or as a residence. The land might be used to grow crops or support livestock animals like cattle or sheep.
Again, the only way to buy real estate through self directed IRA lending is with a non recourse loan agreement. Do you have any other tips for preparing for retirement? Let us know in the comments.