Yes. A self-directed IRA can own real estate, but the IRA owns it, not you. You need a custodian that allows it, and you must avoid prohibited transactions with yourself and other disqualified persons. Get your tax pro involved if you plan to use debt.
Yes, a self-directed IRA can invest in real estate. Most people get the idea right and the rules wrong. The IRA owns the property, not you personally, and that changes how you operate.
How it works
Open a self-directed IRA with a custodian that allows real estate.
Fund it by contribution or rollover. Direct rollovers from an old 401(k) or IRA are common.
Find a deal and send the custodian your direction to buy.
Title is held in the IRA’s name through the custodian.
Everything flows through the IRA. Purchase price, repairs, taxes, insurance, and HOA dues come from the IRA. Rent and sale proceeds go back to the IRA.
The rules that trip people up
The IRS prohibits transactions between an IRA and a disqualified person. Examples include a sale, exchange, or lease of property between the plan and a disqualified person, and lending money or extending credit between them. Similar rules apply between an IRA and its owner or beneficiary.
In practice:
You cannot live in it or let family use it.
You cannot buy it from yourself or close family, or sell it to them.
You cannot pay yourself for work on the property.
You cannot pay expenses from your own pocket and expect to get the IRA to reimburse you later. Fund it properly.
You cannot guarantee a loan personally. If you use financing, it generally has to be non-recourse.
Debt and taxes
Using a loan inside an IRA can trigger tax rules on debt-financed income. Talk to a CPA who handles IRA real estate before you borrow. Do not guess.
Costs and practical issues
Custodians charge fees. Compare them.
The IRA needs cash for repairs and carrying costs. If it runs out, you cannot just write a check.
Valuation reporting is required each year. Your custodian will explain how.
Deals that work well are simpler: cash purchases, notes, tax certificates, and rentals with solid reserves.
What I tell investors
Treat the IRA like a separate entity with its own bank account. Keep it clean, keep records, and never let money cross between you and the IRA.
Next step
Interview two custodians, ask what they allow, and have your CPA review your plan before the first deal.
How I can help you do this
See the proof first: review my full track record and the before and after projects. Then join the investor list if you want to work together.
I have helped investors with self-directed IRA and 401(k) rollover strategies for real estate, alongside 23+ years in distressed properties. I am not your custodian, CPA, or attorney, and you need them involved. What I can do is the real estate side:
Find and vet deals that fit an IRA, such as cash purchases, tax-related investments, and rentals with reserves.
Run the numbers including the carrying costs the IRA has to cover.
Avoid the common mistakes that cause prohibited transactions.
Work with your custodian and CPA so the deal and the paperwork match.
Manage the exit, including selling the property when the plan calls for it.
If you want to put retirement money into real estate, start with a conversation before you fund anything.
This is education, not tax or legal advice. IRA rules are strict and penalties can be significant. Confirm your plan with a CPA or attorney.
Originally published on Equity Edge Orlando. Reviewed for this Substack edition.