Investing within a Self Directed IRA

[JJ Chojnowski]

Self Directed IRA Accounts

Hi, I'm curious about the pros and cons on moving my 401k monies into a self directed IRA Account. A couple of questions.

1- If I paid (for example) two four-plexes in cash from my monies within the self directed IRA account can I benefit right now from the passive income generated from this asset? Or do I need to wait until I'm 59-1/2 before I can use any monies from this investment?

2- Who would you recommend using to set up a "self directed IRA"?

[Linda Weygant]

Originally posted by @Nathan Gesner:

@Dmitriy Fomichenko I just wasn't very clear but that's exactly what I mean. The self-directed IRA has a limitation on how much money you can put into the property each year. If you are limited to $5,500 a year and it will cost $7,000 for a new roof, what do you do?

I think you are confused a little bit, Nathan.

If your property held within an IRA needs a new roof for $7,000 and the IRA has $7000 cash in it as well as the property, then the IRA just uses its cash balance of $7,000 to pay for the roof. This is not a NEW contribution to the account, it is just a transfer of one asset within the IRA (cash balance) to another asset (house) and this is completely legal and fine. The overall account balance of the IRA has not changed, but the diversification of the funds within the IRA has (less cash, more house).