Today’s REI Classroom Lesson

Larry Goins goes over the how-to’s of converting a traditional IRA to a Roth IRA, tax free.

REI Classroom Summary

Larry runs through a scenario for us that includes you purchasing a property in a traditional IRA and what to do so that you can move it to a Roth, without showing equity.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.

Larry: Hi, this is Larry Goins, today’s trainer on REI Classroom. I’m really excited today because what I have to share with you is something I’ve had hundreds, literally thousands of people ask me how to do. Now, this is a very advanced technique so it’s probably something that you’re not going to do if you haven’t done any deals before. But today, I’m going to show you how you can convert a traditional retirement account to a Roth retirement account without paying tax.

Mike: This REI Classroom real estate lesson is sponsored by FlipNerd Investor Coaching, your blueprint to investing success.

Larry: Now, just like anything else, you want to seek your own counsel, talk to your own advisors before acting on anything. But here is the way that I have been taught by attorneys, CPAs, and even tax attorneys. What you do is, you start out with your traditional retirement account. Let’s say you have $100,000 in that account. Now, what you do is, you’re going to make an investment of a property. Let’s say you’re going to buy five properties at $100,000 each and then what you’re going to do is, you’re going to borrow 80% on each one of those. So now, you have five properties worth $100,000, and you have 20% equity in each one and you owe $80,000 on each one.

So now what you do, then you go get an evaluation done by a certified appraiser that does this for retirement accounts and for the IRS, and typically, not every time, but typically, the valuation for that type of purpose would be lowered. And I’ve seen them 15%, 20%, 25%, 30% lower. Let’s just say that the valuation for each property came in at $80,000 on that property. So now, you have five properties that you basically have zero equity in. So now, you can convert that over to a Roth retirement account with zero equity showing and you will pay zero taxes on it.

Now, like I said, seek your own advisor. I’m not giving tax advice, but that’s the way I’ve been taught to do it and now you can do it, too. My name is Larry Goins, author of the best-selling book, “Getting Started in Real Estate Day Trading” and “HUD Homes Half Off!” If you’d like a free copy of “HUD Homes Half Off!”, go to freehudbook.com. Thanks a lot and I’ll see you next time.

Mike: The FlipNerd Investor Coaching program is America’s most robust real estate investor training and designed for your success. If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success and ready to dive into a world-class instructional coaching program that provides you step-by-step instruction to help you achieve financial freedom, then you need to visit flipnerd.com/coaching to learn more. Spaces are limited. Whether your goal is to simply get started or to take your business to the next level, you may be a fit for our life-changing program. Learn more today at flipnerd.com/coaching.

Please note, the views and the opinions expressed by the individuals in this program do not necessarily reflect those of flipnerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.

Are you a member yet of flipnerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at flipnerd.com.

Please check out the FlipNerd family of real estate investing shows, where you can access hundreds of expert interviews, quick tips and lessons from leaders across the real estate investing industry. They’re available at flipnerd.com/shows or simple search for FlipNerd in the iTunes store.

 


 

Larry Goins
Larry Goins is an author, trainer and national speaker. He has written several books on real estate investing that are available wherever books are sold. He is making his latest book, HUD Homes Half Off!, available for free for a limited time at FreeHUDBook.com.
Larry Goins

Latest posts by Larry Goins (see all)