House-Hunting as Vacation

As the second-home market in Latin America has emerged, so has a cottage industry of tour operators eager to attract foreign buyers seeking vacation retreats and investment properties.  Part vacation, part real estate boot camp, the following agencies provide potential home buyers through the legal and financial particulars of overseas ownership:

- Tropical Pathways runs tours to Panama, Dominican Republic, Mexico and Honduras;

- International Living leads tours in Panama, Costa Rica and Nicaragua

- Simply San Miguel offers some 15 different vacation options for visitors to San Miguel de Allende in the Sierra Madres of Central Mexico, including a Real Estate Curios Tour

Topics addressed on the six-night trip - which costs $1,285 (double occupancy) with hotels, local transporatation and some meals - include health care and home insurance.  Tourgoers also meet architects and designers who can advise on how to comply with the local community's architectural guidelines.

IRAs: Do You Have to Invest in Stocks or Bonds Only?

No!  It may be surprising, but it's true: No law demands that retirement plans be invested in stocks, bonds or mutual funds.  In fact, the government allows investors to put the money in their I.R.A.'s and Roth I.R.A.'s into almost anything, be it condominiums or airplanes.  A growing number of Americans are doing just that, though so-called self-directed I.R.A.'s that steer clear of mainstream investments.

Most self-directed I.R.A.'s are invested in real estate.  Four of the largest custodians of self-directed I.R.A's are Fiserv, Sterling Trust, Equity Trust and Entrust.  Sterling Trust and Equity trust provide advice and processing checklist for those considering using their I.R.A. to hold debt-financed real estate, which is subject to a non-recourse promissory note.

Note:  The biggest risk of using a self-directed I.R.A. is breaking the law.  Generally speaking, I.R.A.'s cannot be used to invest in collectibles (stamps etc..) and life insurance.  And accountholders may not personally benefit from their investment in any way other than making legal withdrawals after the age of 59 1/2.  This means that you cannot live in a house you bought with your I.R.A., or put rental income anywhere but back into the I.R.A.  Finally, any transaction with a lineal family - like children, parents and grandparents - are prohibited.