Self-Directed Investors Have Advantage in Cash-Heavy Real Estate Markets

By Heather Taylor0 Comments

In the real estate market in many parts of the country, cash is king right now, and that could be beneficial to self-directed investors.

RealtyTrac Vice President Daren Blomquist recently told NBC news that all-cash buyers have represented 43 percent of the real estate market so far in 2014. Banks are tightening restrictions, making it harder for buyers to get financing or slowing them down, allowing cash buyers to win bids because they have the money readily available.

“It is surprising to see these buyers who are living in the properties somehow coming together with the cash … to buy these homes,” said Blomquist. “I think they're getting creative, they realize that cash is king. If they're going to beat out other offers on the property and win the bid, they're going to need to come up with cash.”

This can be good news for real estate investors who deal in cash...but what if your funds have dried up? A lot of investors don’t know that retirement accounts can be used for funding real estate deals, among other investments. If you have a self-directed IRA that contains the proper funding for the sale, you can move up to a more favorable position to win the bid. You can also partner your IRA with other self-directed IRAs to raise the cash needed for a sale.

Let us know in the comment section if the surge in all-cash buyers surprises you, and if you’ve beat out other bidders because of your ability to buy with funds from your self-directed IRA.

Get more details on real estate investing with an IRA here.