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Home  Articles Investing a Small IRA
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Investing a Small IRA |
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QUESTION: “Dyches, I know you like investing with IRAs and I am anxious to invest as well. However, I only have $3,000 in my Roth IRA. Is there any way I can invest that small of an amount?”
ANSWER: You can absolutely generate a good return on this amount. In the above article, Fred and his wife each used $4,400 from their IRAs to invest in the lot. Their return was almost 5 times their investment!
Let’s look at a couple of ways to invest a small IRA. First, you could do a straight loan. Yes, it is a small amount, but that may just be what another investor needs to finish a project. You could easily get 15% and 5 points if you find someone needing this small amount.
But let’s look at another way your IRA could prosper from lending. You know others who have significant funds—either inside an IRA or personal funds. You could have them lend the majority of the loan and you Wrap their loan with your IRA funds! In this case, the IRA is protected in a junior position and earning a differential in interest on someone else’s money. Such a Wrap could easily generate a return of 100% or more.
Not enough? OK, maybe you find a great quick-turn property. It is great deal in which you would like for your IRA to benefit. You can not own the property and have your IRA involved. That would be a prohibited transaction. So you get a financial friend to buy the property using money from a lender you know. Your IRA then buys an option on the property. These steps are easy if you have a good deal. Your friend will make a little profit for holding the property and the lending investor has a secure first mortgage.
The property gets fixed up and placed on the market. A buyer is found, but your IRA option must be cleared. Your IRA could realize returns in the thousands of percent in this case!
We will cover these strategies in detail at the IRA Class as well as many others. This is not a fluff or sales event; it is a hard-hitting meaty event. Heck, the class manual is worth the price of the class!
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