Leverage self Directed IRA to Purchase Rental
I'm looking to find out the pros and cons of using a self directed IRA to purchase a rental. Is this a good idea?
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@Jason James Whether it's a good idea is going to depend heavily on your situation. For many of my clients, all of whom are real estate investors, the answer is "hell yes." There are tons of perks to using your SDIRA for nontraditional investments. After all, most investors get SDIRAs with Checkbook Control because they allow us to invest in the things we understand. For those of us here on BP, myself included, that's going to be real estate. Buying real estate with this method offers asset protection, creditor protection, and even a means to buy your retirement home ahead of time. Depending on your situation, there may be some financing advantages as well.
There are several ways to use IRA funds to make a real estate purchase, but the most direct (and easiest, for many investors) is with a Self-Directed IRA LLC.
As a lawyer, I just want to add that before you make any type of investment in this fashion, get some personalized advice from a qualified attorney. A good real estate attorney who also invests in real estate would be ideal. Most pros will tell you that you CAN make this type of investment, but they won't necessarily tell you whether you SHOULD. If you don't already have an attorney, check out the credentials and reputation of any attorney you plan to retain for this purpose to be sure they know their stuff.