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How to Invest in Real Estate with a Self-Directed IRA

February 11, 2022

A growing number of retirement savers are becoming aware that they can choose investments other than the traditional offerings of stocks, bonds, mutual funds, ETFs and CDs within an Individual Retirement Account (IRA). Self-directed IRAs offering non-traditional investments have increased in popularity in recent years and are somewhat more accessible for investors compared to in 1974 when the IRA was first introduced. Self-directed IRAs allow you to invest in real estate, precious metals, notes, tax lien certificates, private placements and more.

Investing in real estate through a self-directed IRA can be a great way to diversify your retirement account. Traditional and Roth IRAs can be converted into self-directed IRAs, where the individual has more control over their capital and still retain the tax-deferred benefits. 401(k) plans work a little differently; if the individual is still employed by the company that sponsors the 401(k) plan, he or she can’t move the money around. If it is an old 401(k), a rollover is possible.

One of the biggest differences when converting your IRA to a self-directed IRA is that it requires you to hire someone to act as the trustee or custodian of the account while you act as the director, deciding what to invest in. There are many custodians to choose from but below are a few companies that I’m familiar with.

Real Estate Self-Directed IRA Advantages:

See the steps necessary to set up and begin investing via a self-directed IRA. The link below is a video from Midland IRA, which provides an overview on investing in real estate through a self-directed IRA.