IRA/401(k)...Show me the MONEY!!! (retirement plan, real estate, foreclosure, purchase)

[InvesTools]

Ok., so your investments inside your retirement plan have gone snorkling and "taken a dive". Yes, you had the best funds, etfs, stocks, bonds, shoes and socks right? Still, your investment is tanked rock-bottom.

here is how you increase recover and exceed your ROI...

you find a foreclosure-you know, a home although it may be a rental or commercial building. You are sure the building needs some repairs around $15-20K; similar homes have sold (within the last 3months) for about 100k
and the purchase price is 20-30k or even 40k.

but you are still short on cash. Your IRA however has some $100k.
IRA buys forclosure for $30k+15K to fix= 45k. you sell it for 100k, pay realtor 6000. and NET $49K!!!!!!!!!!!!!!!

but wait you PAY ZERO-I REPEAT; ZERO TAXES! You bought real estate inside your IRA and therefore it is "tax deferred"...

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[chet everett]

I think that very few people should really engage in "bottom fishing" in real estate. While I know there are properties than can be purchased for less than $50K, and sometimes you could, in theory, double your money, more often the shear costs of the MATERIALS needs to put such properties back into good shape can EASILY make it completely unfeasible.

The other very real concern that one runs into at the "extreme bargain" territory is that too often this are in locations where NO ONE buys housing. I have seen LOTS of places that are unsafe, isolated, or with so many negatives that there are really ZERO prospects for resale.

I suppose there are a small number of place that are rough but have a reasonable chance of being "flipped" -- and that is REALLY what is being suggested here -- I think most SANE investment advice about one's IRA is that "slow and steady" is the way to go if it really is money you have to count on for retirement...

[annerk]

I've got 15-20 years until I retire, the market will come back. It's all cyclical, and nothing I haven't seen before.

[InvesTools]

chet,

certainly you wouldn't look into areas that are blighted or distressed neighborhoods. That said, I've worked with investors where houses with little work-mainly cosmetic- was turned arround for a 25-35% profit. Certainly one must work with an experienced and knowledgable Realtor. Thanks for your comment. By the way...the only "steady-eddy" out there is a fixed annuity at 2-3.5 percent!