Frequently Asked Questions

How long does it take to set up my REALIRA^®? answer

Can I pay for the costs to set up my REALIRA^® with IRA funds?  answer

Can I purchase a property using my REALIRA^® as a down payment and get a loan for the remainder?  answer

Can I purchase real estate in other countries with my REALIRA^®?  answer

Can I use my REALIRA^® to purchase other investments besides real estate?  answer

What can’t I put in my REALIRA^®?  answer

What if I don't have enough money in my REALIRA^® to purchase the property I want?  answer

Why hasn't my financial planner told me about the REALIRA^®?  answer

Are the annual custodian fees with a REALIRA^® expensive?  answer

What is the proper amount of my overall investments to allocate to a REALIRA^®?  answer

Can I purchase a primary residence with my REALIRA^®?  answer

 Is my Roth IRA eligible to be used for a REALIRA^®?  answer

What other kind of Retirement Accounts can be utilized with a REALIRA^®?  answer

How does it work if I want to sell property that I have purchased with my REALIRA^®?  answer 

What is a REALIRA^® Checkbook LLC?  answer

What’s better for my situation, to use a Standard REALIRA^® or use a REALIRA^® Checkbook LLC?  answer

What are the costs involved with setting up a Standard REALIRA^® or a REALIRA^® Checkbook LLC?  answer

Once I set up a REALIRA^®, do I have to pay the fees again for each property I purchase?  answer

How do I go about buying property in the US with my REALIRA^®?  answer
 

Questions about Buying Foreign Property

What can you tell us about your development partner, Loring Investment, Inc.?  answer

Why Costa Rica?  answer

Do you plan on offering other areas via REALIRA^® in the future.  answer

What’s the best way to travel and see the properties?  answer

Can I visit my REALIRA^® property in Costa Rica?  answer

Are there accommodations available near the properties?  answer

When I purchase a lot, is it titled?  answer

Answers to Frequently Asked Questions
 

Q.  How long does it take to set up my REALIRA^®?

A.  Generally a REALIRA^® can be set up in as little as 5-10 business days.  Depending on how the account is funded, it may take from 2 - 4 weeks due to transferring assets from your existing retirement account.  Most transfers are done trustee-to-trustee giving you confidence that your assets always remain in the right hands.

Q.  Can I pay for the costs to set up my REALIRA^® with IRA funds?

A.  Yes, simply make this request when you set up your REALIRA^® account and we will be happy to arrange all fees to be paid directly from your existing IRA.  Fees paid with your IRA are not subject to taxation or penalty by the IRS.  If you would like to pay your fees from non-IRA money, you simply write a check at the time the application is submitted – it’s that easy!

Q.  Can I purchase a property using my REALIRA^® as a down payment and get a loan for the remainder?

A.  Yes, and with the help of one of our experts, we can greatly simplify this process for you.  When leveraging with your IRA, a special loan known as a non-recourse loan is required. Non-recourse means you cannot personally guarantee the loan. Therefore, traditional lending companies are not an option.  Our affiliated network of non-recourse lending institutions can provide you with the loan you need.

Q.  Can I purchase real estate in other countries with my REALIRA^®?

A.  Definitely yes!  One of the most attractive features of the REALIRA^® is the ability to purchase international real estate within the account.   International real estate is almost always more cost effective than domestic real estate.  When was the last time you could purchase a beautiful coastal lot for under $25,000 in the United States?  Real estate opportunities like this exist in specific countries internationally.  Our experts regularly help clients find and purchase international coastal property utilizing their IRAs.  Our goals are to, 1) identify areas of exceptional appreciation, 2) make the process very simple for our clients, and most importantly, 3) remain in Compliance with IRS regulations.

Q.  Can I use my REALIRA^® to purchase other investments besides real estate?

A.  Yes, although at REALIRA^® we specialize in establishing accounts to hold real estate, the same account can hold many other assets.  Some of the possibilities include:

     Trust Deeds
     Private Loans / Notes
     Businesses
     Private Stock
     CDs
     Certain Gold and Silver Coins and Metals
     Many other options

Q.  What can’t I put in my REALIRA^®?

A.  According to publication 590 by the IRS, you are prohibited from owning certain types of assets in your IRA.  These include:

Q.  What if I don't have enough money in my REALIRA^® to purchase the property I want?

A.  You can combine your IRA funds with friends, family members, or other individuals to purchase real estate.  Although loans may be used in combination with IRA assets to purchase a property, certain tax implications must be considered when doing so.

Q.  Why hasn't my financial planner told me about the REALIRA^®?

A.  In your financial planner's defense, many professionals in the industry are not aware that you can use your IRA to purchase real estate.  Most Broker/Dealers have done a great job in keeping the subject out of the spotlight.  Traditional Broker/Dealers that focus on stocks, bonds, and mutual fund stand to lose billions of dollars in revenue if money is moved from traditional investments to real estate and other non-traditional investments.  In response to this potential loss, most Broker/Dealers prohibit their representatives and financial planner’s from recommending non-traditional IRA investments purely for economic reasons.

Q.  Are the annual custodian fees with a REALIRA^® expensive?

A.  Annual fees are competitive, and often less expensive than your traditional IRA investments.  Costs vary between custodians and can be as little as $80 a year.  Some custodians charge a fee based on the size of your account while others charge a fixed flat fee.  Although we have established relationships with whom we consider to be the best Custodians in the business, we remain independent and will help you choose the best option based on your particular situation.

Q.  What is the proper amount of my overall investments to allocate to a REALIRA^®?

A.  In most cases we recommend no more than 25% of your total assets to be allocated to a REALIRA when utilizing Real Estate.  The concept of diversification involves NOT putting all your eggs in one basket – a REALIRA^® is no exception.

Several factors that influence how much to allocate to a REALIRA^® include age, risk tolerance, and overall assets.  It wouldn’t be uncommon for a young investor with a relatively small IRA to allocate more than 25% to a real IRA.  On the other hand, it would not be appropriate for a 75 year old retiree who relies on their IRA for daily expenses to utilize 100% of their REALIRA^® to invest in real estate.

Q.  Can I purchase a primary residence with my REALIRA^®?

A.  No.  Only properties held for investment purposes are allowed inside of the REALIRA^®.   Using your REALIRA^® for a personal residence would be comparable to you using your IRA funds to purchase a car or go on vacation.  The IRS is very particular about prohibiting you from directly using your IRA for personal gain prior to retirement.

Q.  Is my Roth IRA eligible to be used for a REALIRA^®?

A.  Your Roth IRA is a wonderful tool to use as a REALIRA^®.  With your Roth IRA the profits from the properties you purchase can potentially be received TAX-FREE!  This may be the only legal way for you build a real estate portfolio completely free from taxes – forever!

Q.  What other kind of Retirement Accounts can be utilized with a REALIRA^®?

Q.  How does it work if I want to sell property that I have purchased with my REALIRA^®?

A.  You can buy and sell as much property as you like within your REALIRA^®.  All proceeds must flow back into your IRA account.  These proceeds receive tax-advantaged status just like a normal IRA.  If you follow IRS regulations, these proceeds aren’t taxed until you withdrawal money from your account after you reach 59 1/2.  If your REALIRA^® is a Roth you can make withdrawals after 59 1/2 completely TAX-FREE!  Buying and selling properties within your REALIRA^® is completely normal, routine, and accepted by the IRS.

Q.  What is a REALIRA^® Checkbook LLC?

A.  A REALIRA^® Checkbook LLC, is a type of account whereby REALIRA^® establishes a separate LLC for you under the umbrella of your IRA.  The LLC is actually owned by your IRA.  This allows you to open a checking account at your local bank – the only difference is that instead of opening the checking account in your name, you open it in the name of your LLC.

Once the REALIRA^® Checkbook LLC is established, you are free to transact business as if it was your own checking account.  You can write checks and receive funds as you normally would to and from your REALIRA^® Checkbook LLC.  Of course you have to make sure you don’t violate the rules of your IRA including those preventing you from personally benefiting from the account until you are ready to retire.

Some states such as California are more expensive than others to maintain an LLC on an annual basis.  This can sometimes be a factor when deciding between a Standard REALIRA^® versus a REALIRA^® Checkbook LLC.

Q.  What’s better for my situation, to use a Standard REALIRA^® or use a REALIRA^® Checkbook LLC?

A.  Most of our clients purchasing unimproved property use a standard REALIRA^®.  A standard REALIRA^® would be ideal for those who want to purchase a single property, hold it for several years or more and have relatively few financial transactions flowing back and forth.  An example of this would be a piece of raw land or a lot where cash does not routinely flow back and forth from rents, repairs, etc...

For REALIRA^® accounts involving regular financial transactions (monthly rents or repairs) or for those investors who are buying and selling multiple properties in their IRA, the REALIRA^® Checkbook LLC is an excellent choice.  An example of this would be purchasing a rental property or buying fixer uppers to fix and flip.

Q.  What are the costs involved with setting up a Standard REALIRA^® or a REALIRA^® Checkbook LLC?

A.   First of all, it's important to know that all your fees can be taken directly out of your IRA so you don't have to pay these fees "out of pocket".   when you set up your REALIRA^® account and we will be happy to arrange this for you.  Fees paid with your IRA are not subject to taxation or penalty by the IRS.  If you would like to pay your fees from non-IRA money, you simply write a check at the time the application is submitted – it’s that easy!

The costs to set up a REALIRA^® vary depending on your particular situation.  Generally, the cost ranges between $750 to $2,500.  This includes choosing a custodian, establishing the account, transferring assets from the existing custodian, and taking care of everything you need to set up the account. 

You receive everything you need via overnight delivery – all you do is sign the enclosed documents, return them in the pre-paid envelope, and we do the rest.

Q.  Once I set up a REALIRA^®, do I have to pay the fees again for each property I purchase?

A.  Generally not.  Once your REALIRA^® is set up, the only fees your account will incur are those from the custodian.  The custodian will charge transaction fees for property when you make a new purchase ($35.00 - $75.00) and their annual fees will apply.  All REALIRA^® fees for setup are one time only.  Once your account has been established, you can purchase additional properties on your own or from the REALIRA^® website without additional fees.  If you require the help of our experts when purchasing additional properties, additional fees may apply, however, this is your option.

Q.  How do I go about buying property in the US with my REALIRA^®?

A.  Purchasing Domestic property with your REALIRA^® is very similar to a standard cash purchase of property outside your IRA.  The biggest difference is that your IRA actually owns the property. Therefore YOU cannot sign contracts as an individual owner of the property.  Your IRA (the custodian) or your LLC must technically execute contracts on your behalf.

Questions about Buying Foreign Property

Q.  What can you tell us about your development partner, Loring Investment, Inc.?

A.  Pat O'Neil founded Loring Investment Inc. in 1994. Through Loring Investment Inc., Pat manages two private funds (the Loring Funds) focused on stocks and real estate. He is the author and publisher of the STOCKBOOK newsletter, read worldwide.

Pat has written and taught courses in investing and stock trading. Pat has been interviewed by CNBC-TV, Businessweek Online, CBS Radio and Web-FM. He has been written up in the San Francisco Chronicle, Money Magazine, the New York Times and Overdrive.

Since 1994 Loring has been focused on purchasing waterfront properties in locations including Maine, Canada, and most recently Costa Rica.

In 2006, Loring opened the Coldwell Banker Loring Costa Rica office in the Nicoya Peninsula area on the Pacific Coast of Costa Rica.  The office was established to compliment operations in Costa Rica and to extent Loring’s expertise with the TIC subdivisions in Costa Rica.

Currently Coldwell Banker Loring Costa Rica employs a full time staff including an attorney with over 10 years experience in the local area of Costa Rica.

REALIRA^®'s partnership with Loring Investment extends well beyond representing properties on their behalf.  REALIRA^® handles all transactions for Loring Investment relating to utilizing IRA assets to purchase property in Costa Rica.  REALIRA^® works very closely with Loring Investment to provide clients with the best appreciation opportunities possible.   

Q.  Why Costa Rica?

A.  There are many reasons why we recommend property in Costa Rica.  The country is beautiful, politically stable, accepted by Americans for investment, and with the maturing baby boomer generation, the demand for Costa Rica continues to steadily rise.  Additionally, the Costa Rican government encourages foreign investment of property in their country.

Combine these benefits with the fact that Costa Rica’s proximity to the United States is favorable and you have a winning combination.  Bottom line, as long as the appreciation opportunities in Costa Rica are superior to other areas, we will continue to have a presence in that region.

Q.  Do you plan on offering other areas via REALIRA^® in the future?

A.  Yes, we are currently targeting numerous countries.  When the appreciation opportunities slow, and the inventory of available properties in Costa Rica subsides, we will offer additional coastal properties worldwide.  Some of our target areas include:

Q.  What’s the best way to travel and see the Costa Rica properties?

A.  You have several options.  The two primary International airports in Costa Rica are San Jose, and Liberia.  From San Jose you can take a commuter flight directly to Corozalito (Punta Islita Airstrip).  You can arrange a rental car to be waiting for you upon your arrival at the airport.  All subdivisions are within a few minutes from the airport.  The most popular Airlines with daily routes to Corozalito are Nature Air, and Sansa Air.

If you rent a car from the San Jose airport, the Corozalito/San Miguel area is within a 6 hour drive.  4 wheel drive is necessary as some of the roads may be tricky during the rainy season.

Alternatively, you can fly into Liberia International Airport.  Renting a car and traveling from this airport is relatively easy.  Plan on a 2.5 hour drive to the Corozalito/San Miguel area.

Although some clients choose to visit their property, a majority of our clients purchase property sight unseen.  We make the commitment to our clients that every property we represent has been personally inspected by a member of our team.  You can rest assured that if a property is listed on our website, a member of our team has personally visited the site, and in many cases taken photos for your reference.

Q.  Can I visit my REALIRA^® property in Costa Rica?

A.  You are always welcome and encouraged to visit your property.  The Coldwell Banker Loring Costa Rica office is located next to the San Miguel Subdivisions and agents are available to walk your property with you so you can personally inspect it if you desire.

Q.  Are there accommodations available near the properties?

A.  There are several options for accommodations within a short drive from all subdivisions.  Following are a few of our recommendations:

Loring Condos
Based on availability, the Loring Condo Complex may be an option to property owners on a limited basis while visiting their property.  These are privately owned condos.  The Coldwell Banker Loring Costa Rica office is situated within this building.  For availability, contact the REALIRA office.

Hotel Punta Islita – www.hotelpuntaislita.com
This 5-Star World-Class Boutique Hotel has been known to cater to such Diplomats as former President, Jimmy Carter.  With a Wellness Spa and numerous first class amenities, these accommodations are among the best in Costa Rica.

San Miguel Eco-hotel
This eco-hotel is a short walk/drive from the Loring Costa Rica Office.  With bungalow style accommodations, a shaded courtyard with pool, and an Italian Restaurant on the premises, this is a popular place for San Miguel visitors.

Casa Caletas – www.casacaletas.com
Located 15 minutes South of the Coldwell Banker Loring Costa Rica Office, this Boutique Hotel/Eco Lodge has beautiful views looking over the river mouth and ocean.  With an infinity edge pool, 7 rooms and two suites, this is a quiet and peaceful place to stay.

Q.  If I purchase a lot in Costa Rica, can it be titled?

A.  Costa Rica enjoys fee simple titling similar to the U.S.  Unlike some other countries whereby you own a long term lease on the property, fee simple titling affords right of ownership on a specific property.  Subdivisions that we recommend in Costa Rica are generally titled by Stewart Title of Costa Rica. 

Additional Questions

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