The sheer volume of real estate financing options made available to today’s investors is staggering. Whether you realize it or not, there are countless opportunities to land the funds for your next deal — if you know where to look, that is. Hard money lenders — and even private money lenders, for that matter — are practically “champing at the bit†to get their capital in the hands of savvy investors they know are going to get the job done. What’s more, traditional lending institutions offer a myriad of loan options for all sorts of properties. Case in point: there are plenty of real estate financing options out there if you play your cards right.
It’s worth noting, however, that not all real estate financing options are so obvious. In fact, there is one creative real estate financing vehicle that most investors already have access to: a 401(k) retirement plan. That’s right, the very same retirement account you have been paying into for the better part of your professional career can act as a great vehicle to fund your next real estate investment. In other words, if you have a 401(k), you may have already found the creative real estate financing to fund your next deal.
REAL ESTATE FINANCING OPTIONS FOR NEW INVESTORS
Today’s 401(k)s are much more versatile than people give them credit for, even those with retirement accounts that are exceeding expectations. In fact, 401(k) retirement plans don’t have to be relegated solely to defined contribution plans. It’s entirely possible to self-direct your own 401(k) plan into an entirely different investing vehicle. And while there are certainly limitations on where you can self-direct the money you have in your 401(k), the Internal Revenue Code doesn’t state what a retirement plan can invest in, but rather what it cannot.
It just so happens that real estate is one of the investment vehicles those with 401(k)s can divert their savings to. According to Forbes, “what many retirement account investors are not aware of is that hidden in the tax code is a noteworthy provision that allows a 401(k) plan to purchase real estate with leverage without triggering a tax.â€
