What Is a Self-Directed IRA Real Estate Investment (and Should You Do It)?

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Why would you buy real estate in your IRA? The biggest benefit of a self-directed IRA real estate investment is the awesome opportunity for your money to grow. tax-deferred!

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Why must the IRA be “self-directed”?

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What kind of taxes do I have to pay if I hold real estate in my IRA?

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What kind of property is my SDIRA allowed to buy?

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No. You can’t live in it or use it in any way, until you retire. It is strictly for investment.

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Can I just make a down payment with my IRA funds and use a mortgage to pay for the rest?

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What Is a Self-Directed IRA Real Estate Investment (and Should You Do It)?

Why would you buy real estate in your IRA? The biggest benefit of a self-directed IRA real estate investment is the awesome opportunity for your money to grow. tax-deferred!

Why must the IRA be “self-directed”?

Basically, “self-directed” means that you can invest in “alternative investments.” These types of investments include real estate, notes, precious metals, start-ups and even cryptocurrency.

What kind of taxes do I have to pay if I hold real estate in my IRA?

The answer is none. The property is considered an asset of your retirement fund, and thus is tax deferred until you reach retirement age.

What kind of property is my SDIRA allowed to buy?

There are no limitations. If you find a piece of real estate that you think can make money, be it as a rental, fix-and-flip, or a straight up investment, you can purchase it for your IRA.

No. You can’t live in it or use it in any way, until you retire. It is strictly for investment.

Can I live in my property after I buy it?

Can I just make a down payment with my IRA funds and use a mortgage to pay for the rest?

Yes, but you have to use a non-recourse loan. That means that the lending institution has no recourse to the individual borrower, and instead guarantees the loan with the property itself

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Can I provide additional funds to my IRA with existing cash?

Yes. This strategy is not well known, but you can fund your account with existing cash.

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