Harleysville-Lansdale Real Estate and More: January 2010

Did you know that you can invest in real estate with a Self Directed IRA?

Many people would love to take advantage of the current housing prices and low interest rates to purchase an investment property.  However, many of these same people lack the additional and significant cash often needed to purchase an investment property.  Such potential investors don’t realize that money they have currently invested in retirement accounts can be redirected to purchase real estate.  Certainly, such a decision should be reviewed with a competent financial advisor, but it may be an excellent way to diversify and grow an investment portfolio.

Most Individual Retirement Accounts (IRA’s) are held with major brokerage firms which only deal in the more traditional investments (stocks, bonds, etc.).  However, it is only the limitations or rules of the brokerage firm that restrict you to these traditional investments.  A Self Directed IRA is easy to establish and will allow you to invest in all of the investment types that are permitted by the IRS, including real estate.  

How to set-up a Self Directed IRA?

There are numerous firms that can help you establish a Self Directed IRA and act as the custodian for your account (just as a brokerage firm might act as custodian for your traditional IRA).  One good resource is EntrustCAMA.  In many cases, the necessary forms can be completed online in just a few minutes and the custodial fees are relatively low.

What other steps are needed to buy an Investment Property in a Self Directed IRA?

One of the first steps is to fund your Self Directed IRA.  You can make contributions to it just like a traditional IRA.  You can also transfer or rollover funds from a traditional IRA (or other qualified retirement plan) into your new Self Directed IRA.  If you have enough assets in your Self Directed IRA to purchase a property outright, that simplifies things, but there are also lenders who will finance property purchased within Self Directed IRA’s.

Once you identify a good investment property, you proceed with the normal steps of submitting an offer through closing on the property as you would for a personal purchase.  Because of IRS rules, however, you don’t personally sign any documents related to the purchase of the investment property.  Everything must be in the name of your Self Directed IRA and you direct the custodian to sign all necessary documents for the purchase.   In addition to a good Realtor and a qualified custodian, you should also consult with a CPA or financial advisor competent in Self Directed IRA’s.  With this team in place, you can diversify your retirement plan and take advantage of the many investment benefits that real estate has to offer.

There are terrific deals in real estate right now.  Coupled with the low interest rates, these deals make it a great time to consider buying an investment property.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling an investment property in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. Search for Investment Property in Montgomery County, PA.  Get more information about Buying Investment Property in Montgomery County, PA.

Copyright © 2010, The Scott Loper Team, All rights reserved. Invest in Real Estate with a Self Directed IRA.

I heard on the news that yesterday was the most depressing day of the year.  Whew!  Thank goodness that day is behind us.  January 25th was depressing for a number of reasons:

• It was a Monday.
• It was windy and pouring rain (at least here in Montgomery County, PA it was).  Snow would have been far more uplifting than all the rain.
• Spring still seems very far away.  Vacation even farther….
• It is exactly one month after Christmas.  All the holiday fun, decorations and good will have passed.  The credit card bills have arrived.  Even the retailers aren’t offering the deep discounts like the ones we saw prior to the holidays.
• Three weeks have passed since New Years.  Many are finding that their resolve to fulfill those resolutions is quickly fading.  For some the weight isn’t coming off, for others the home is still disorganized with unfinished projects, and for the ActiveRainers we aren’t blogging and commenting as much as we should.

Perhaps it would be good to keep in mind that nothing magical happened when the clock turned to 2010.  Real estate is just as challenging as it was in 2009.  Modifying the daily routine is just as difficult too.

But today is Tuesday.  One day closer to spring (and Christmas).  The sun is out in Montgomery County, PA.  Good and bad days are sure to pass.  But remember, the worst day of the year is behind us (and it really wasn’t that bad).

Smile, be happy and write a blog post.

~Lisa

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2010, The Scott Loper Team, All rights reserved.  The Most Depressing Day of the Year.

The Montgomery County, PA Market Report for December 2009 shows some positive news.  A long streak of year-over-year falling prices has ended and the year-over-year number of home sales remains in positive territory.

The average price of a home in Montgomery County increased to $310,012 compared to $305,882 for December, 2008; a 1.4% increase. This ends a 24 month streak in which home prices had fallen from the prior year level.

The number of homes sold this past December increased to 513 units versus 494 homes sold in December of the prior year; a 3.8% increase. This marks the 6th consecutive month that the number of homes sold has increased from its prior year level.

A particularly interesting observation from this market report is that December's numbers should give a more normal indication of the market in comparison to November when the original first time buyer tax credit was set to expire.  That deadline caused an unnaturally high amount of sales in November, but also caused the average price to dip significantly for that month due to the generally lower price range of first time buyers.  One might have expected December's number of sales to suffer due to the forced activity the previous month.  However, December's sale increased over last year and the average price jumped by 12.8% from November's level of $274,706.

By the way, the home buyer tax credit has been extended and expanded to include "current" home owners.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Montgomery County, PA Market Report for December 2009.