One of the favored investments of Self Directed IRA account holders is buying and selling fixer uppers. Fixer uppers allow you to maximize your investment via property flipping. If you choose to flip properties via your Self Directed IRA account, following are three things to keep in mind.
Self-Directed IRA LLC – Self Directed IRA: 3 Tips for Maximizing Profits When Flipping Fixer Uppers
Fixer uppers, commonly referred to as handyman specials, are an excellent strategy for maximizing your Self Directed IRA profits. However as with any investment, it is imperative that proper research is done first. Real estate can be one of the safest investments you'll ever make, if you do your homework beforehand and keep the following in mind.
Property Location: Anytime you invest in real estate, this is always the first rule of thumb. Even novice real estate agents will tell you, location should be compromised when investing simply because while you can change what the property looks like, you can't change the surroundings it sits in (at least not in time to recoup your investment).
Invest with the needs of the buyer in mind. This means good schools, properties that are appreciating in value, an active local government, etc…
Cosmetic Renovations: Where possible, choose properties that need as little work as possible. This is especially true if you are just starting out. After all, you're using the monies from your self-directed IRA LLC – Self Directed IRA account to increase your portfolio's value. Don't fall in love with the wrong property and overspend to buy it, or fix it. This is a business investment – nothing more, nothing less. Never forget that.
Get to Know a Rehab Specialist: A rehab specialist will be able to tell you whether or not the property you're thinking of buying is a good deal or not. For, they don't consider how "pretty" a property is, but assess its bones. They look at those things that can cost you dearly, eg, the electrical wiring, the plumbing, the insulation, etc. Cosmetic fixes are easy and relatively cheap to fix. Maximizing your Self Directed IRA investment depends on the knowledge of someone who knows the difference.
