More Investors Buying With IRA Funds

Alex Finkelstein is co-editor of Debt & Equity Journal, from which this article is excerpted.

Boston—A growing number of investors are using self-directed, tax-deferred individual retirement accounts to own commercial real estate, according to mortgage bankers and real estate tax lawyers interviewed by DEJ.

Both John Edwards, a director in Arbor Commercial Mortgage‘s Boston office, and Terence J. Delahunty, a real estate practice partner in the Orlando, FL office of Foley & Lardner, say many investors are using the cash values of tax deferred accounts as a source of equity for acquisitions. However, Charles J. Beaudrot Jr. and Scot Burton, both of the real estate capital markets group of Atlanta-based Morris, Manning & Martin LLP, say the pros of using an IRA account to acquire real estate may be outweighed by the cons.