Self Directed 401k | Real Estate IRA LLC

Revenue Growth via Reinvesting | Three Homes

Here is an example of what your IRA or 401(k) can accomplish over a 12-year time frame. Let’s assume an IRA or 401(k) has a value of $450,000. And 3 homes are purchased for $140,000 each and then leased to produce income. Let’s also assume that the homes appreciate at the long-term national average of 4% per year.

Yr Beginning Value
Three $140,000
Gross Rent
Taxes, Insurance,
and Maint.
Net Rent
4% National
Year End Value
of IRA or 401(k)
1 $420,000 $36,000 $12,600 $23,400 $16,800 $460,200
2 $460,200 $36,000 $12,600 $23,400 $18,408 $502,008
3 $502,008 $36,000 $12,600 $23,400 $20,080 $545,488
4 $545,488 $36,000 $12,600 $23,400 $21,820 $590,708
5 $590,708 $36,000 $12,600 $23,400 $23,628 $637,736
6 $637,736 $36,000 $12,600 $23,400 $25,509 $686,645
7 $686,645 $36,000 $12,600 $23,400 $27,466 $737,511
8 $737,511 $36,000 $12,600 $23,400 $29,500 $790,411
9 $790,411 $36,000 $12,600 $23,400 $31,616 $845,427
10 $845,427 $36,000 $12,600 $23,400 $33,187 $902,644

Keep in mind that this is an extremely conservative approach since $30,000 of the original $450,000 is always on hand to handle maintenance, vacancy or management costs. The chart below illustrates the results.

Performance Summary

As you can see, this chart shows the growth of this self-directed IRA to over $1,000,000 in 12 years. Your area may appreciate at greater or less than 4% per year and your rents may be higher or lower than this example. Also note that we did not increase rents or taxes, insurance and maintenance.

Obviously rents would increase over time at least enough to keep up with inflation. Performances will vary and this is an example only.

Blog Posts

Top 5 Self-Directed IRA Myths

At Asset Exchange Strategies, LLC we have had conversations with potential self-directed IRA clients many thousands of times and the myths continue to live on after 20 years in the business. Some things like Sasquatch or area 51 seem to perpetuate in people’s minds without any substantial evidence the concept is correct or myth. Let’s […]

read more..

IRA Real Estate: New Dividend Asset

When you have a standard IRA or 401k, your investment options are pretty limited. Typically, you’re forced to invest in stocks and that’s about it. domain info However, many people are starting to consider using their traditional retirement funds to make investments in real estate. With a real estate IRA, suddenly your investment options are […]

read more..

Discovering Self Directed IRA

If you’d like something to invest in your IRA besides bonds, mutual funds and stocks, you may want to try real estate. You can buy houses, condos, commercial properties and even rental properties. You can start using IRA to widen your retirement portfolio since IRAs can manage a broad selection of assets. Hence, you can […]

read more..