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What if a real estate or other investment opportunity presents itself, but you don’t have enough money to take advantage of it?
The good news is that there’s a variety of funding sources you may be able to tap. When you discover the pool you may be able to draw from, you gain nearly unlimited investing potential – with $0 out of pocket.
Here are nine potential sources of capital for your real estate investments:
1. Other People’s Money (OPM)
There might be funding sources more accessible than you realize. People in your own network may have the capital you need for your investment. You can expand your network by finding investing clubs or Meetup groups in your area.
2. Other People’s Businesses
If you know someone who owns a business, you may be able to access funds from the business for your investment. Consider business owners you might know in fields related to your investment.
3. Your Retirement Account
New investment avenues are opened to you once you realize your IRA can invest in rental properties, rehabs, private equity, tax liens, or loans in the form of promissory notes – to name a few alternative investment options available to self-directed IRA investors.
Your IRA or Roth IRA is not the only retirement account you can self-direct. Health Savings Accounts, SEPs, SIMPLEs, and Solo 401(k)s may also be used for an array of investments.
To take advantage of this funding source, you’ll need to open a new account, or roll over or transfer an account from your current IRA provider to a self-directed IRA custodian.
Video: What is a Self-Directed IRA?
4. Your Spouse’s IRA
Many investors do not realize a Spousal IRA may be opened for a non-working spouse, even without earned income, and the spouse with earned income can contribute to both IRAs up to the annual limit for each. As long as one individual meets the eligibility requirements and you file a joint tax return, you and your spouse may be eligible to open an IRA.