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Investing in Real Estate with a Self-Directed IRA

We received this question from a viewer: “Can I use funds in my IRA to purchase real estate?” In short: yes! So long as the holder of an IRA follows very specific rules, it is possible to use funds in an IRA to invest in real estate. Investors who want to use funds in their IRA will use what’s known as a “self-directed IRA.” Before starting this process, investors should meet with a real estate attorney, CPA, and their financial advisor. Like all investments, it should fit into your overall financial plan while maximizing tax efficiency. There are a number of companies that handle self-directed IRA funds. There are many rules and restrictions which make costly mistakes possible. It is imperative to work with a reputable company. You may ask: “What do I need to do?” The investor will transfer IRA funds into a separate custodian’s account. Instead of investing in the stock market, bonds, and other securities, investing in real estate is possible. One important principle to r...