RE purchase within IRA account???

I have heard discussions about people being able to buy properties within an IRA …usually flips…to increase portfolio without withdrawing funds. is this possible only in Roth IRA or can it be done in a rollover IRA?

Hello, There is tons of information on the internet about self directed IRA for real estate. There are many companies that offer it. I myself have spoken to my financial adviser concerning them using a Roth. In my opinion, I would use a financial adviser to set one up with.

Hi kr1127,
u r right. They are called self directed iras. Not the typical type you see at stock brokerages or banks. Being in flroida I went with one that is close to me. Entrust Administration. They also work out of state. I was also considering two others: Equitry trust(trustetc) and IraMyWay. YOu can use google to check them out as well as getting more information about using self diredcted iras. If you live in florida like I am, I went to a couple of meetings that entrust sponsored and decided to move from schwab to them.
You can use different types of iras as well to buy real estage, you just cant do it with your 401k unless that custodian allows tu to move some of the money into an ira.
Good luck

But if i am correct you can not collect the profits from the home when buying with your ROTH IRA. the proceeds go back into the IRA since you have to be 62 (I think) to start collecting from your ROTH IRA. We have to remember, you pay no taxes when you pull your money out of your ROTH IRA after you have reached the required age since all dollars went in after you were taxed on income…

I am sure someone can clarify this??

All the profits go back into the roth or any other version of the ira. That is correct. So whatever gains you get from the house do not get taxed at all since you are ding it in your roth. Glad to see you picking up things fast yrush.You can also partner your roth with your own money safely around 40/60 split. The company I went with explained how that can be done and will help you draw up the papers when your ira doesnt have enough funds to buy a particular house.


So say I want to actually get some of my profits now, can I use say 50percent of my cash and 50 percent of my ROTH IRA on an investment property and then when I sell, get 50% of the money now and pay only capital gains tax based on that 50%… I already have a ROTH IRA with AIM and i know I can use it to purchase real estate just never bothered with it yet. I know the smart people were using there IRAs when the market started crashing. It was the legal taxfree way of cashing out your IRA for shortterm investments that were making money and not losing…

Its a little more complicatead than that, but that is the idea. DO you know if your AIM ROTH IRA is self directed? There is one sure way, ask if you can invest in real estate. If they say no, then its not self directed. Send me an email later, if you want to talk with a time. I’m off work tomorrow. I think I sent you an email with my cell number, if not, I’ll call you on your number you sent me.

Thanks guys! you have been so helpful. i knew that the profits would go back into it, but i figured if there were certain deals we had trouble getting other financing for, that could always be there as backup…and also just to plan on doing one deal a year in the IRA or something to build the portfolio more for retirement…and tax-free! Thanks again and keep the info coming if anyone else has thoughts!

So if you pull 50K from an IRA to use as 10% DP on a 500K deal and finance the other 450K, does only 10% of the profit have to go back to the IRA, or does all the leveraged profit get tied up also.

Also, is this type of investment pretty much only for flips, or can you invest IRA money into portfolio properties? On a flip profit is very easy to calculate, but on a portfolio property you have cash flow, appreciation, equity, and eventually resale profits to deal with.

You cannot use a Self Directied IRA to leverage property unless the lender will give you a non-recourse loan. You cannot personnally guarantee the loan. This would be a disallowed transaction. You would have to setup a purchasing corporation, invest in that company which you own less than 50% of and then that company/entitiy could use its credit to secure financing. You have to make sure all your investments are within IRS guidelines. I do this quite a bit but only for option contracts and escrow flips. thus keeping it within guidelines. Check out these guys set me up and also provide guidence on these matters. Just using a custodian is a hassle in Real Estate deals. You need check book contol without having to go the custodian for every deal unless you are only buying long term stuff. They will nickle and dime you for every transaction and they definetly can’t act fast on a hot deal. The guys at Asset Exchange Strategies can set you up an entitiy to have your custodian invest into then that entity which you own can write checks for real estate transactions but still must meet IRS guidelines. Lots of knowledge to understand before you do it, but worth it to unlock those non productive dollars tied up in your IRA accounts.


that was excellent. thanks for the info.