The newest 'buzzword' to hit the world of real estate investment is: Real Estate Investment Notes. Now, real estate notes themselves aren't new, in fact they have been around for a long time. But, the 'awareness' of them as "viable investment vehicles" is a new trend that is a direct result of recent "cooling" happening in the real estate market in parts of the country. Real Estate notes are a dose of "hot" in recent "cool" times.
Smart real estate investors always keep a close "eye" out for any changes in the real estate market and "act" quickly to make the wise investment decisions necessary to avoid 'disastrous' financial losses. You too can benefit from what these "investment-gurus" have come to know about real estate backed notes and stretch your profits/gains a little further if they are generated inside a self directed IRA or self directed 401k.
Real Estate Notes Provide Passive Cash Flow:
Real estate backed notes can have a high rate of return if structured properly, and are more secure than most other well-known investment strategies. A real estate note can be used to earn what has been coined as "passive-income" or "passive cash flow" by marketers and investors. Simply put, this means you will earn 'dividends' on your investments in real estate notes without having to do much else other than writing a check for your note and voila the money starts flowing in month after month like clockwork. Not bad, but it gets better. Since the money is earned passively through a real estate, you benefit again at tax time. Gains earned by real estate note investments are taxed at low long term15% capital gains tax rates. Do you know of any other investment strategy that allows you to make money passively and at a flat 15% tax rate? Nothing like real estate notes has "hit" the real estate world yet, so until or unless it does, real estate notes are the way to go if you want to put real cash and profit into your pocket month after month, year after year.
If you prefer watching your real estate investments grow without any help on your part, then real estate note investments could be a great investment alternative for your real estate investment portfolio. If any 'cosmetic' or "functional' "improvements" are made to the real estate property listed on your real estate note it can really 'pump' up the value of your note to new heights. This will not only increase the dividend-earning potential of your real estate note, but also it works to your benefit should you want to sell off a portion of your real estate note, or sell the note off "completely" because it's increased value will put more money in your pocket. You can use your "windfall' to re-invest in more real estate notes or use some of it to buy real estate notes and a portion of it to fund a college education for your child.
Real Estate Note Liquidity:
Unlike selling real property, real estate notes have built in liquidity. In most cases, you don't have worry that if you "hold" a real estate note and wanted to sell it quickly, that it would be hard to find buyers for it. Wise real estate investors are always looking to "buy" more real estate notes with positive cash flows because they know what valuable, income-earning vehicles they are.
Self Directed 401k/IRA Notes:
Did you know you can use your 401K or self directed IRA retirement accounts that you either implemented through an employee-employer plan, or opened up yourself, to fund the purchasing of real estate notes? Many people are "dipping" into their retirement accounts because they have learned that real estate notes offer them the ability to increase the dividends usually earned through such retirement accounts, securely and reliably.
Will you be among the 'wisest' of real estate investors and look into the "viability" of real estate notes as an investment strategy to best increase the dividend-earning power of your retirement money? The Internet provides you with access to all of the information you need to learn how real estate notes can help you to "retire-in-style" without the "risks' unlike so many of the other investment opportunities out there today.
Let's recap the benefits of real estate backed notes they:
1. Generate passive income. 2. Are secured by real property. 3. Are taxed at low long term capital gains of 15%. 4. Can be purchased with a self directed 401k or self directed IRA.
A quick note about real estate note investment gains earned inside an IRA or 401k
Gains earned and tucked back into the IRA/401k are earned on a tax deferred basis and are taxed at ordinary income tax rates at the time of distribution starting at the age of 59 ½. Gains earned off your real estate note investments inside your Roth IRA or Roth 401k occur on a tax deferred basis and distributions are earned tax free at the time of distribution. If you use a Roth IRA/401k, you'll have years of tax-deferred growth on your investment - and NO TAXES at the time of distribution. How does that stack up against 15% long term capital gains? Right... There is no comparison. If you are already over the age of 59 ½ and have a Roth IRA that has been open more than 5 years, then you are in the sweetest spot of all as all your gains filtered through your Self Directed Roth IRA can be distributed to you tax free without any waiting periods. This could be the ultimate leverage and a way to grow your personal wealth.
Real Estate Backed Notes could just be your "hot" ticket to financial success in "cool" times.
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