How to Invest in Real Estate With a Self-Directed IRA: Is It The Best Option?

It’s essential to understand the rules before you start looking to purchase a real estate property. IRAs have strict regulations, primarily when investing in real estate with a self-directed IRA.

Is investing in real estate with a self-directed IRA a bad investing strategy? Every investor is different, and after reading this article, you may find that it may or may not be a viable option for you.

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

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A self-directed IRA allows people to invest in other things beyond stocks, such as non-publicly traded start-up companies, precious metals, and in particular real estate.

What is a Self-Directed IRA?

A person can use a self-directed IRA to purchase rental properties, land, house flipping projects, and conduct wholesaling deals.

You’ll have to find a financial institution or company that permits self-directed IRAs. This financial institution is known as an IRA custodian.

How to Setup a Self-Directed IRA for Investing in Real Estate

The best way to find an IRA custodian that offers self-directed IRAs is by networking with other real estate investors. Successful real estate investing is built upon making relationships with others.

One of the main benefits of an IRA is its tax shelter. Investors can defer paying tax on any cash flow from rental properties or any profit made from a house flip sale.

Benefits of Using Self-Directed IRA to Invest in Real Estate 1. Tax Shelter

Real estate is a tangible asset, which has shown to be more stable historically. The cash flow from a rental property, especially a multi-unit, can yield higher returns than the stock market.

2. Potential for Higher Returns

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