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.
Listen, Watch or Read
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.