One of the most popular alternative investments for your IRA would be purchasing real estate as an investment. Due to the potential safety, security and predictability of the asset, many Americans are making the decision to diversify their retirement account into a tangible asset class like real estate. With self-directed IRAs you are now able to invest in real estate assets like Land, Single Family, Multifamily, Commercial, Mobile Homes, etc…Buying Real Estate
Congratulations on deciding to purchase real estate with your IRA
Completing Purchase Offer/Contract for IRA Real Estate Purchase:
Once you have completed your due diligence on your investment and have selected the property you would like to purchase within your IRA you MUST draw up the offer/ contract in the name of the IRA. The proper vesting of the offer/contract will read:
Quest Trust Company FBO (Your Name) IRA (Your Account Number)
Sending Earnest Money Deposit for IRA Real Estate Purchase:
- Earnest money MUST come from your IRA!
- Once the client is ready to send the earnest money deposit to the title company or attorney’s office the client will need to fill out the Direction of Investment for Real Estate . Please accompany the Direction of Investment form with a copy of the purchase offer/contract that has the client’s “Read & Approved” signature.
Forms Needed for this step:
Handling Closing of IRA Real Estate Purchase:
Should the title company or attorney that is involved in the closing have any questions about the transaction in your IRA please have them contact any Transaction Manager. Our staff is very experienced in educating and working with 3rd party closing agents who have no experience with closing real estate in the name of an IRA. So, please don’t ever hesitate to have them contact Quest with any questions.
Good news! Since Quest Trust Company, Inc. is the legal entity in administration of your IRA, the client will not have to attend any closings. However, just like the offer/contract, we CANNOT sign any of the closing documents from the 3rd party closing agent without the client completing their “Read & Approved” signature. Once all the proper documents are signed Quest will work with the 3rd party closing agent to close your real estate purchase.
For Selling of the Real Estate Investment we will need the following:
- Real Estate Direction of Sale
- Contract Signed as “Read and Approved”
- The contract & all closing docs MUST be drawn up in the name of the IRA. The proper vesting of the IRA will read: Quest Trust Company FBO (Client Name) IRA# (Client Account Number)
We will send closing instructions to the Title Company and they will provide the following:
- Settlement Statement
- Closing Terms and Conditions
- Warranty Deed
- Wire Instructions
Forms Needed for this step:
These Closing Documents will then be sent to you for your “Read and Approved” signatures.
Once this is signed “Read and Approved” and sent back to Quest, we can execute the final signatures on all of the closing documents and send them back to the Title Company as well as Wire Instructions for them to send the funds to your IRA.
Payment of taxes, insurance, and other ongoing maintenance bills after closing
All expenses associated with the property owned by your IRA MUST come from your IRA. These types of expenses could include, but not limited to: repairs, contractors, HOA, property taxes & insurance. In order to pay expenses from your IRA Quest requires a copy of the invoice/purchase order to be paid along with the Payment Authorization Form (One Time). Should there be recurring payments the client can complete a Payment Authorization Form (Recurring) and then only need to submit the invoice that needs to be paid.
Forms needed for this step:
Receiving Payments/Earnings from Investment
If your IRA owns an asset, all profit/earnings must go back into your IRA. These can be collected by you, but must be made payable to your IRA. They cannot be deposited into your personal account. To ensure the payments are deposited correctly, please fill out a Deposit Coupon. To facilitate what payments are related to the different assets in your account, we encourage the use of a Deposit coupon to ensure the funds get deposited correctly. Please log in to the client portal to find the deposit coupon.
Submit Your Forms: All forms can be mailed or faxed to any of our locations or emailed to firstname.lastname@example.org.
Note: At this time E-signatures are NOT accepted.
If you are unsure what form to use or how to complete a form, help is only an email or phone call away!
Documents completed? Submission options include:
- Mail to Corporate – 17171 Park Row, Suite 100 Park Row – Houston TX 77084 or,
- Email – email@example.com
- Fax – (281)646-9701 or (972)314-9589 or (512)610-3332
DISCLAIMER: Quest Trust Company does not render tax, legal, accounting, investment, or other professional advice. If tax, legal, accounting, investment, or other similar expert assistance is required, the services of a competent professional should be sought.