Frequently-Asked Questions

Investing IRA Funds Into Real Estate


How can I tell if my IRA allows real estate investments?   Contact your IRA administrator and ask if your IRA is “Self-directed” and whether you can invest your money in real estate. If both answers are “yes,” you’re ready to go. Contact us to discuss investments.

What if I find out my IRA doesn’t allow real estate investments?  Contact our partner at and ask them to set you up a new Self-Directed IRA, and then roll your IRA, 401K, SEP or other current plan over into it. THEN, contact us to discuss investments.

How much will that cost me?  The cost of establishing a new Self-Directed IRA is $50.00, with no fees imposed for the first year. In my case, their administration fees are less than I was paying my old administrator.

What happens to my stocks and other investments? In most cases, your investments move directly to your new IRA with no interruption. Myra sets you up a Scottrade account and you can do your own trades from your computer.

Can I invest funds from both my traditional IRA and my Roth IRA in the same investment? Yes, each is treated differently tax-wise and are independent, but funds from both can be invested in the one LLC, for instance.

Can I own my house in my IRA and rent from the IRA?  No, you cannot buy personal property or sell personal property through your IRA. Disqualified Persons include your spouse, ancestors, decendants and any spouse of a descendant. You can sell or buy or rent to siblings, aunts and uncles or cousins, however.

Should I convert my IRA into a Roth IRA? There are a lot of factors involved in this decision, and you should ask your CPA whether it would be advantageous in your case. If you're approaching the age at which you will want to make distributions from your Roth IRA, for instance, there is a 5-year period during which you cannot do so.

Can I buy stock in my company with my IRA funds? In some cases, yes. Ask your IRA Administrator for specific rules. You cannot, for instance, do transactions with anyone who owns 50% or more of the stock in a company, or receives 10% or more of it's compensation or profits.

Can I buy a house, fix it up and sell it for a profit in my IRA? You cannot personally do the work on property in your own IRA. However, you can invest your IRA funds in "fixer-up" houses as long as the project is managed and by a third party, or by buying stock in an LLC that does that type of work.

What if my IRA doesn’t have much money in it, yet? The unique part of our program is its flexibility. Your IRA can buy shares in an LLC that owns the real estate. You can buy a little, or you can buy a lot. If you only have a small amount to invest, you can meet other investors with similar interests to fund an LLC.

How many IRA’s can I have? There is no limit on the number of IRA’s you may personally own, but the sum of contributions in all your IRA's cannot exceed the limit on annual contributions. You can contribute $5,000/year until you are 59-1/2 years old, and then the limit increases to $6,000/year.

Do I have to put all my IRA money in one real estate investment? No. You can invest any amount you want in one LLC, subject to legal limitations, or you can invest in several different LLC’s if you want to diversify.

Can I also own regular stock in my IRA? Yes, you may want to keep some regular stock or mutual funds in your IRA along with some real estate. You may want to keep your money invested in stocks after rolling over into a self-directed IRA, while you are deciding which real estate or LLC to purchase stock in, and buy or sell through your online Scottrade account.

What kind of real estate can I buy with my IRA funds? The unique part of our program is flexibility. Oh, did I say that already? The possibilities are limited only by your imagination. Click here to see a list of just a few of the possibilities.

What kind of returns can I expect from my IRA real estate holdings? Depending on your age, willingness to take risks, and other factors, a safe NNN-leased property may earn 8-9% cash income. A leveraged investment or development project might earn as much as 25%. Some types of properties show immediate earnings, and some are long-term investments. Click here for a complete discussion of the factors that affect your return on investment.

What does ROI mean? CAP rate? If you’re new to commercial real estate, Click Here for a complete glossary of terms that will help you understand that world.

Email me with any questions we didn't cover, and we'll get you a prompt answer.