Not able to hold real estate as an investment within an IRA?

[Kurt Bouma]

My financial advisor had this to say in regards to the question of whether or not I could (without penalty) use funds in a self-directed roth IRA as a down payment on an investment property. I have no reason to doubt it's truthfulness but it seems to go against what I've always heard:

"Your Roth IRA's are already classified as self-directed IRA's. You are not able to hold real estate as an investment within an IRA. So unfortunately, the only way to use these assets to purchase real estate would be to pull the money out of the IRA incurring the 10% penalty plus paying the taxes on the growth in the account. I hope this helps but I'm guessing it isn't the answer you were looking for."

Looking for feedback on that from anyone who might confirm or know otherwise...