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Minimize risk in real estate investment

Non-recourse loans can shield borrowers' other assets after default

In a recent column, we considered how an expensive waterfront property could be viewed in the eyes of the purchaser. While many consumers would consider the $12 million mansion the ultimate in comfortable living, it's possible the place will not serve as the owner's shelter, but rather solely as an investment. Savvy investors buy assets because they foresee significant potential. Often, the "upside" is considerable, be it an undervalued stock, unpopular bond or unknown baseball player waiting for an opportunity to help a new franchise. While you cannot purchase a baseball player with an individual retirement account, you can buy stocks, bonds and real estate. In fact, you can even finance a real estate IRA if you have a sizable downpayment and can document monthly income from tenants. The challenge with real estate IRAs has been lack of funds to make a meaningful purchase. Historically, real estate IRAs have been purchased with cash, and the trust then held the pr...

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