How to use a Self Directed IRA to buy real estate in Panama

What to do with all of your Benjamins?

I recently opened another IRA and funded a self directed account with one of the largest Trusts in the US.  In the course of educating myself about their process for investing, I decided to check on some of the authorization forms and called the client services department.   I could not understand why I was on hold  for 10 minutes and finally asked to speak with an executive to complain.   He said “you would not believe the amount of activity we have seen since the election!!!

Seems like I am not the only one concerned about the fiscal debt cycle in the US that is coming to an end in the near future.  There is a lot of alternative asset investing going on right now including precious metals and of course depression priced  real estate.  I still don’t understand why anyone would want to buy that last class of investment as it is generally in a market that has been hit hard by unemployment and no one can tell me where all the new jobs will come from.  Even in Miami where the boom is on once again, the growth is illusory with foreign buyers snapping up condos, mostly from guess where – Latin America.   The firemen and nurses are hit with hard times and as we see housing prices escalate once again, the working class will start to think of places to relocate.  There goes another section of middle class America on the move looking for greener pastures.  Happens time and time again.  Panama seems to be getting more and more attention as I hear activity levels across the board in Panama are picking up and even though some will be tire kickers for now, that is OK, because a lot of people will return and invest here.

So back to my IRA and how I will structure the next investment.  The self direct IRA will allow me to buy stock in a bearer share corporation that owns real estate here.  The S.A. or meaning anonymous society, anonymous company, anonymous partnership, or share company designates a particular type of corporation in various countries, mostly those employing civil law like Panama.  It is the most common form of ownership of property here in Panama.  The IRA takes direct ownership of the shares in the corporation and a disassociated party, in this case my attorney, will be the registered agent of the company and the “manager” of the asset.  My wife will be the 100% beneficiary of the IRA so I avoid probate issues entirely and do not need a separate trust owning the SA.

We have a number of management free assets here including land and lots that properly selected can be bought with good potential for appreciation.  You can even buy a piece of land for your future retirement home as long as after you build the home, you buy it personally, take the disbursement, pay the taxes.  You can also buy a house or a condo as rental property until you decide if you will use it personally in the future.  I think it is a good time for many people who are considering Panama to consider  getting “one foot across the border” sooner rather than later.

Come check out our little section of Paradise in Panama and book you tickets and hotels soon as our high season starting next month is probably going to be one of the busiest ones ever.