Recouping Your 401k/IRA Losses Through Real Estate Investing

One of the most crucial skill sets a real estate investor must have, is the ability to recognize and adapt to major shifts in longstanding market behaviors. What in the name of Aunt Fannie is he talkin’ about?! Here’s an example. Though thousands of trees have given their lives so a myriad books could be written about real estate cycles, they become deafeningly silent when those so-called predictable patterns become, um, much less predictable.

A case in point is the San Diego income property market. It’s been one of the nation’s darlings for my entire 40 year career. Buy something, hold it, sell it for a profit, usually a nice one, rinse and repeat. Let’s take a close look at the factors now in play that have quite efficiently rewritten the San Diego script.

The Kinda Sorta Perfect Storm OR A New Kinda Catch 22

So you do the math, and tell me how you compete with your San Diego income properties. Why on earth would an investor choose a 40-60 year old property with an inferior price/rent ratio that requires at least 50% more cash to acquire — yet still generate inferior results?

But what does this hafta do with makin’ up for my huge 401k/IRA losses?

Though I used San Diego as an example, there are many similar areas around the country. If you live in one, you recognized the bullet points above. You must adapt to local reality and embrace the real life opportunities available to you around the country. Being able to ‘drive by’ your investments simply doesn’t cut it any longer. In fact, it’s the reason most San Diego based investors find themselves mired in the inertia of false hope.

NewsFlash: Long term investment in San Diego and similar regions is dead for the foreseeable future. So when you want to use your self-directed IRA or Solo 401 etc. to recover your Wall Street losses, think short term, get in/get out type scenarios in places like San Diego. You can make some decent returns here if you know what you’re doin’.

We’re recommending safety in numbers — combine some of your self-directed capital with others to acquire properties for cash at huge discounts. Do it in a way that allows for Murphy to decimate your Plan — but still come out well. Protection of capital is now King of the HIll. The Plan must be designed such that the worst case scenario finds you with an unwanted property generating generous cash flow. If done correctly, you can turn your Plan’s invested capital 2-3 times a year.

What’s the most important point here? Simple — If you’ve lost money the last few years in your 401k, IRA etc., you must either convert to a self-directed IRA/Roth/Solo 401 or change how your current self-directed plan is invested. The smart money is adapting — using little or no leverage, while turning the capital quickly. The key is doing it through a professional team.

If you are interested in making measurable progress towards rebuilding your retirement plan so you won’t hafta work until you’re 80, contact me.

We’re the ones adapting — and it’s not our first rodeo. You can reach me at 619 889-7100. Call me — I need a fix. Have a good one.

Related posts:

1. Recovering From Huge 401k/IRA Losses — First? Take Control
2. For Many Real Estate Investors Losses Can Be Golden — If You Act
3. Durango, San Diego, Texas, KC — Random Thoughts On Real Estate Investing
4. Purposeful Planning And Tax Shelter For Real Estate Investing
5. Purposeful Planning, Real Estate Investing, And Analytical Objectivity