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Can I Buy Real Estate With A Self-Directed IRA?

With a Self-Directed IRA, many people wonder what investments can be included. In this episode David Moore discusses buying real estate with your self-directed IRA-making it a real estate IRA, in many ways. He includes information on what types of real estate do and do not qualify.

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Today we’re talking with David Moore, co-founder of IRA Advantage, a firm that specializes in truly self-directed retirement accounts. In today’s episode, David asks if you know it’s possible to purchase real estate with an IRA? So David, is it?

Can you purchase real estate with a self-directed IRA?

David Moore: Yes it is. It is possible to buy real estate with IRAs or 401K plans when you have a truly self-directed account. That purchase can be made as simply as by writing a check. In many instances if you’ve got one of our Checkbook Advantage IRA accounts or our truly self-directed solo 401K plans.

Are there restrictions though, on what kind of real estate you can buy?

David Moore: Yes, the restriction is it’s simply limited to the fact that it needs to be held for investment. Rarely is the investment itself a problem. What causes problems is when you’ve got a transaction between or for the benefit of a disqualified party. What I mean by that is you couldn’t go buy a house for mom to live in or a kid to live in. You couldn’t go buy a second home to go visit. As long as the property is to be held for investment, you shouldn’t have a problem. It’s even possible to buy a home that could be your retirement home at some point.

How does this approach compare to other so-called self-directed IRAs?

David Moore: It’s a great question. We like to break it into what we would call a truly separate account. There’s a lot of self-directed IRAs out there and the term actually is not something that’s legally defined. In most instances, you’re really just talking about moving the money from a custodian that does not allow you to buy what you’d like to, the one that does. When we’re talking about a different definition of self-directed, most of those accounts are defined by what will allow you to buy this stock or that, but they don’t allow what we call a truly self-directed account which is going to allow you to buy anything the law allows.

Thank you, David. Listeners may call 503-619-0223, or can visit iraadvantage.net for more information.

The takeaway is that self-directed IRA accounts are very flexible and can include many types of investments, including real estate. Follow our blogcasts to learn more about self-directed IRAs and other investment opportunities.

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