Purchase Real Estate with A Self-Directed IRA

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It is a known fact that you cannot use your Individual Retirement Account (IRA) to invest in real estate.  Although this is true with a traditional 401(k) or traditional IRA, you can invest in real estate through the use of a self-directed IRA.

A self-directed IRA is an IRA like any other under IRS guidelines in terms of annual contributions, required minimum distributions, and types such as Traditional, ROTH, Simple, and SEP.  While most traditional IRAs limit your investments to publicly traded securities, self-directed IRAs are open to almost any investment, except for life insurance, collectibles, and S-Corporations.

Below are some key points you should review before you decide to use your self-directed IRA to purchase real estate:

  1. The property must be a new purchase directly into the IRA and cannot be a property you already own or a personal residence.
  2. You must have enough cash to purchase the property.  You cannot take out a mortgage in your IRA to finance the purchase.
  3. You cannot borrow money from the property or use it as security for a loan.
  4. You and your relatives are barred from occupying or working on the property.  If you are considering renting the property, you need a property manager to find tenants and all expenses for repairs and improvements must come out of the IRA.

While it is possible to use a self-directed IRA to purchase real estate it may become more complicated to manage its use than if it were purchased and operated outside of the IRA.

Feel free to give us a call if you have any questions or want to discuss this further.

HKA December Charities- We’re “Almost Home” For The Holidays!

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On December 6th, the Hauk Kruse family assisted the families at Almost Home in Saint Louis to make their holidays even brighter by decorating their homes for the holidays. When I went to Almost Home, I didn’t know what to expect.   I knew that the home housed about 10-15 young women with their children.  What I didn’t realize was that the organization wasn’t just a housing rehabilitation facility,  it was really so much more; it was a home.

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Lauren, the Development Coordinator was welcoming and informative.  She showed us the living space and we began to decorate the halls. As we decorated, I couldn’t help but think about what their day might be like.  These ladies get up every morning, get ready for school or work, take care of their children with the understanding that there is no husband, parent, grandparent or friend to assist them.  They are the breadwinner, they are ultimately, solely responsible for their destinies.

What makes these women different is that they never had a helping hand.  They were born into the world with no great advice from dad or the loving embrace of their mother. They came into this world not knowing what the next day would bring.  Coming from a place of strength in my family unit, it was hard for me to get my head around this.  The only resolve I have is to have nothing but complete compassion and admiration for the strength of these women.

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(From Left) Jessica Murphy, Abby Romberger

Last year, my sister Amanda and her husband Justin welcomed their first child.  Over the past year, I have seen and experienced second hand all that goes into properly raising a child.  In itself, it is truly the hardest profession to undertake.  These ladies do it every day.  Almost Home acts as a safe “rite of passage” so that they can take on other aspirations like school and work.  Almost Home provides for the continued development for these ladies and their children.

As we finished the decorating, I found comfort in the belief that these ladies will overcome.  They have been provided a place to start again in a new direction filled with love, support and opportunity; and some great mentors to help guide their way. They are my new heroes.

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(From Left)Brian Godfroid, Julio Davila, Blake Will & Bill Kruse

I have gratitude for Almost Home, for the people like Lauren and the rest of the team there who dedicate their lives to assisting others.

Please donate to Almost Home today by clicking here.

The Year In Review 2013- The Color Run

As we approach the end of 2013, we thought it would be a good time for reflection.  We are proud to look back at some of the many charitable organizations we’ve supported in 2013. Each event that we participated in was unique in its own way.  Looking back, these events were fulfilling and ultimately led the HKA team to participate in more events that supported causes that were near and dear to our hearts.

“With malice toward none, with charity for all, with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds”

– Abraham Lincoln.

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On April 27th, 2013, we put their best foot forward by participating in The Color Run – St. Louis in support of the Autism Speaks organization. The color run is an event series and 5K paint race takes place all over the world.  It is an untimed event, has no winners or prizes but runners are showered with colored powder at stations along the run.  Autism Speaks is an autism advocacy organization in the United States that sponsors autism research and conducts awareness and outreach activities aimed at families, governments, and the public. Autism affects 1 out of every 88 children.  It is a developmental disability that most families have been faced with.  Although there is no cure for ASDs, awareness is key to empower the families to better understand prevention and treatment for autistic children.

“The Color Run is a great time. The company is “for-profit”, but it selects a local organization as its charity partner for each race. The St. Louis charity partner was Autism Speaks which is awesome because I have a cousin who has severe autism. It’s good to know that while having a fun time you are helping others in the community.”- Brian Godefroid, HKA Global