Forget 401K – Invest in Commercial Real Estate Foreclosures

Does anybody doubt that the current commercial real estate market may be perfect for those seeking to invest in discounted commercial real estate, such as foreclosures and other distressed commercial properties. These commercial buildings are often well below market value, making them not only affordable but also provide perfect for positive cash-flow from your investment.

This, in a nutshell, is why many people have started to invest in real estate again. With home prices starting to rise and real estate market recovering being underway, isn’t it a matter of time before the commercial real estate market begins to recover as well,as it has been reported is happening in gateway cities across America already?
When it comes to saving for retirement, for many people, a 401K plan ( like rolling the dice ) is among the most popular. But, what do you do when you realize that your 401K savings will not be enough for you live the retirement lifestyle you had planned?
Believing that commercial real estate values are bound to rise throughout the foreseeable future, ( as they have over long term historically) you could simply sell the commercial real estate when it comes time to retire and walk away from the closing table with more than their 401K will provide.

Intelligent educated investors realize that the IRS has always permitted real estate to be held inside retirement accounts. Real Estate investing with a self-directed IRA are fully permissible under the Employee Retirement Income Security Act of 1974 (ERISA). IRS rules allow you to engage in almost any type of real estate investment, except from any investment involving a disqualified person.

The Employee Retirement Income Security Act (ERISA) of 1974 passed the responsibility of retirement saving from the employer to the employee. Which in 1975 resulted in the creation of IRAs which provide individuals a chance to direct where their retirement funds are invested.  Under both ERISA and IRS Codes, there are only two types of investments excluded: life insurance contracts and collectibles such as works of art, rugs, jewelry, etc. Refer to Internal Revenue Code Section 401 (IRC § 408(a) (3)).
A self-directed IRA is a retirement plan that allows you to choose where to invest your IRA money as permitted under IRA rules. Under your direction, your plan can invest in real estate such as commercial real estate, residential real estate, undeveloped land, foreclosures, rehabs, lease options, as well as limited partnerships, LLC’s, notes, commercial paper and many other holdings.

The key to making a profit in the current commercial real estate market all boils down to you finding the right properties, in the right location, and utilizing the right investment strategy for the property. For example, if you purchase a foreclosure commercial building and the local commercial real estate market is still struggling, then you may be better served holding renting out the commercial building and selling it once the local real estate market rebounds.

When determining how to invest in the commercial real estate market, make sure you ask all the right questions and do your research beforehand. Commercial real estate investing is more than simply finding a commercial building to buy at a great price, purchasing the building, and then selling it for a profit. Successful investors study the market and market projections and create an investment strategy that will be beneficial for them.

If you are currently saving for retirement then you wish to consider investing in the commercial real estate market in an effort to help improve your after-retirement quality of life. Now may be the perfect time to invest as commercial real estate prices remain low and recovery appears to be underway soon.



commercial realtor



This information is for informational purpose and not intended to be investment advise, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared

Leave a Reply

Your email address will not be published. Required fields are marked *