Looking for a way to get more bang for your investment in your retirement savings? A self-directed IRA (SDIRA) could be the answer to diversify your investments.

What is a Self-Directed IRA?

A Self-Directed IRA (SDIRA) is quite simply, an IRA. All IRAs abide by the same laws and possess the same capabilities. Unlike other IRAs held at banks, brokerage firms and other institutions, with a SDIRA, you’re not limited to stocks, bonds, or mutual funds. This means you can invest in virtually any asset including private funds, trustee notes and even crypto.

What are the benefits?

A Self-Directed IRA gives you the opportunity to build a more diversified and resilient portfolio. It allows you to take advantage of alternative investments such as real estate, precious metals, private equity, notes, and more. A custodian/administrator is required to do the record keeping for the assets in your account, but nothing moves in or out of it without your direction. You decide how much, when, and most of all, what to invest in, giving you the freedom to invest in what you know best.

Investing in Real Estate With a Self-Directed IRA

Real Estate is a popular investment among SDIRA holders because it is a tangible asset that people know and trust. With a SDIRA, you can invest in a wide range of real estate assets: residential or commercial properties, developed or undeveloped land, condos, hotels, mortgage notes, and more. Depending on what type of account you choose, earnings can continue to be either tax-free or tax-deferred.

How does investing a SDIRA in real estate work? Imagine you purchased a single-family property through your SDIRA. If you chose to sell it, your profits would go directly to your IRA. Alternatively, were you to rent out that same house, your income would go back into your IRA and any related expenses would be paid from your IRA. For more information about how to use your SDIRA to purchase a rental property, go here.

The level of control and flexibility associated with a SDIRA does come with its own set of responsibilities. For example, investments made with your SDIRA are owned by your SDIRA, not by you personally, making self-dealing prohibited. Click here for more information on SDIRA rules.

Getting Started With Investing In A Self-Directed IRA

The first step is to decide what type of account you want to open. Then, establish how you’ll fund it, and decide what your investment strategy will be. Speaking with a legal and/or tax advisor before you begin can help you to answer these questions.If a SDIRA sounds like it could be the answer to your retirement questions, get your copy of The Entrust Group’s Self-Directed IRAs Basics Guide today.

Many of our investors at Coastal Capital utilize this Self-Directed IRA Investments option with The Entrust Group to build safe, above average returns for their nest egg. To learn more about the fund please visit us here.

Will the California real estate market continue to soar?

Throughout the Golden State every real estate market saw incredible price appreciation in 2020. The state’s bird, the California condor, needs the power of wind to soar and reach new heights. This past year the wind powering residential real estate has been record-low interest rates and the COVID pandemic. This combination created incredible demand for new housing and those seeking to work from home in more comfortable spaces.

If we remember back to our Economics 101 class with heightened demand, comes greater supply. Problem with housing is that you can’t just flip a switch and create more homes. Development takes time, so California’s housing supply remains consistent. More demand and same supply means more buyers bidding up prices for California residential real estate!

Mortgage rate forecast

Ninety-five percent of home buyers have to be able to afford the monthly payment to purchase their home. The remaining 5% are those lucky enough to pay for their real estate in all cash. So mortgage rates play a huge part on the demand-side of the real estate market.

The Mortgage Reports recently provided its forecast of residential mortgage rates for the first-quarter of 2021. Specifically the forecast calls for record low rates to drop even more in January & February. Then creeping up a bit in March (but still well below 3% for a 30-year fixed mortgage.) We expect that rates will hoover in this territory for the remainder of 2021.

Mortgage rates primary driver is the Federal Reserve with its monetary policies. The continuation of the Fed’s commitment to easy money will keep pushing assets prices higher. Recently the Federal Reserve commented that this strategy of “loose money” will continue for at least 2 years! It is transforming from inflation-fearing to recession-fearing.

Pandemic demand continuation?

The COVID pandemic has forever changed the work environment landscape. Many workers report enjoying all the benefits that come with WFH. No commuting, more time with family, connivence of doing the work on their terms. Even with the vaccine on the horizon, many expect a fundamental shift to continue in all real estate markets in the US.

Post-vaccine we expect to see many companies switching to a hybrid-WFH business model. Many businesses are reporting much higher employee productivity with the elimination of commutes. Plus, a remote worker does not need the footprint in an office allowing for much smaller work spaces. Downsizing office and work space means more savings right to the bottom line!

Employees who enjoy the WFH will gravitate to employers that allow for them to continue with flexible schedules. Talent that is in scarce supply will walk now that they see the possibilities. Slowly workers will return to office and working spaces but not on a full time basis.

Prediction for 2021 California real estate market

Overall the real estate party will continue to roll in 2021 for residential markets. Commercial office space we expect more stagnation as new demand will be slow. So existing business will continue to reduce foot print sizes. For investors in residential real estate and trust deeds we expect strong returns to continue with minimal risk.

Here at Coastal Capital Group we won’t be changing our conservative and fundamental approach to underwriting. We will keep deploying capital into solid deals meeting our proven fundamentals. If you are sitting in cash, it’s pretty clear that you want to get out of it to avoid inflation erosion.

With the Fed’s commitment to fighting the recession, inflation will increase. Not surprising if the US sees inflation at 4% or more. We strongly suggest getting out of cash and investing in assets or strong cashflow. Start earning returns now either in purchasing residential real estate or investing with us! To learn more about Coastal Capital please visit our Investor Page.