We have been researching and trying to provide our readers with creative ways to purchase real estate.
Here is an article that we found from the real estate tax advice website that talks about a little known way of purchasing real estate -thru a real estate IRA.


Discover the BEST KEPT SECRET in Real Estate;Investing with an IRA!You can purchase real estate with funds from a self-directedIRA. Income generated from the real estate can be TAXDEFERRED and in some cases TAX FREE!
Real estate has historically proven itself to be a great vehicle forboth income and appreciation. One real estate tool that is available to real estate investors are government sponsoredretirement plans. You may not be aware that you have the option todirect your IRA into real estate.
Types of property you can own via your IRA:
Single family homes
Apartment buildings
Condominiums
Mobile homes
Raw land
Commercial property
IRA Types There are two different types of IRA's:
Tax deferred - These are the "tax deductible" kind of IRA'sthat allow yearly contributions to a tax-deferred accountwith pretax dollars. This means that the money you depositin your IRA is not taxed and you will not be taxed until youwithdraw the money when you retire.
Tax free - These are tax-free retirement accounts. Alsoknown as the Roth IRA, yearly contributions are made withafter-tax dollars. These offer no tax advantage in the yearthe contribution is made because the Roth IRA contributionis not deductible. The advantage of the Roth IRA is that thegrowth of the retirement account is tax-free as well as theincome disbursements made from it when you retire.
Both IRA types can be used to invest in real estate. For obviousreasons, most people would prefer to have the Roth IRA as thevehicle for real estate investment because all income and gainsresulting from real estate transactions would be tax free. The factof the matter is that most people have the traditional IRA. Althoughthe income from the traditional IRA isn't "tax-free", it is "tax-deferred".First-Time Homeowner's IRA BreakIf you are a first time homebuyer and you have a regular IRA, youcan withdraw up to $10,000 from your IRA to help pay for qualifying"first-time" home buyer expenses. The $10,000 limit is a lifetimecap per IRA owner, not an annual limitation. The expenses qualify if they are used within 120 days of thedistribution to pay the acquisition costs for your new principalresidence. The rule says that the tax break is only available for "first-time"home buyer expenses, but it doesn't mean that it must be yourfirst residence. A qualifying first time home buyer is someone whodid not have a ownership interest in a principal residence in thetwo year period before the acquisition of the new home. If youare married, you and your spouse must satisfy the two year test.Note that the IRA imposes a 10% penalty if you receive a distribution from a traditional IRA before age 59 1/2. You areexempt, as explained above, if you use the distribution forqualified first-time home buying expenses. If the money is froma ROTH IRA however, the money must have been in the IRA forat least 5 years. Self-Directed IRAThe IRA's above generally don't offer a way to use the funds in theIRA to invest in real estate. The self-directed IRA does. With theself-directed IRA the investor has greater control over how his or her IRA funds are invested. They present the investor with the means to invest in real estate. There are hundreds of companies,or "administrators", that offer self-directed IRAs. You need to makesure that the company you look at allows the IRA to invest in real estate before you give your money to them. Once you find an appropriate self-directed IRA, you will have to roll over your existing IRA retirement accounts to one of the theadministrators offering the real estate investment option. Mosttraditional IRA, Roth IRA, Simple, or Keogh type of retirement account can be converted to a self-directed IRA. Your IRAadministrator will help you determine the steps needed to do so. Example 1: Heather is a simple homeowner who owns a coupleof rental properties. She has an IRA with sufficient funds to purchase another rental property. Heather converts her Roth IRAto a self-directed IRA and instructs the administrator to purchasethe rental property she wants. She eventually purchases the houseand rents it to a couple. The income she receives in the form of rent is tax free. Also, if Heather were to sell the house 3 years orso down the line, the profit from the sale wouldn't incur ordinary income taxes either. All profits would go into her IRA account andcontinue to grow until she retired.
Example 2: Jess purchases a parcel of land in Ventura, California because in the last several years the real estate markethas exploded in the area. He purchases this land with the hopethat it will grow in value as well. To make it more attractive he subdivides the land with the goal of selling it in smaller parcels. Jess purchases the land from his self-directed IRA and instructs theadministrator to buy the land with his IRA funds. Over time thesmaller parcels are sold and all the profits from the sales would gointo his regular IRA account and continue to grow, shielded fromtaxes, until his retires.Note that if you purchase a "fixer" in an IRA, the funds that are needed to make repairs must come from the plan itself. Anypayment from outside the plan would disqualify the transaction.ConclusionThe fact is that real estate investing within IRA's is one of the bestkept financial secrets around. To learn more about this lesser know real estate investment tool, we recommend the book, The Real Estate IRA.