Setting up self directed IRA and how to use it to purchase a property

5 Replies

Hi everyone. I read some of the posts about self directed IRAs but still feel a bit unsure. I am in the process of getting my 401k accounts rolled over into an IRA with Fidelity. I just got off the phone with them and was advised that the IRA accounts would already be self directed. I'm still a bit confused as to how I can use it to purchase property though. If anyone has a good contact who can explain and assist me to set it up correctly for buying property, that would be great. All advice is welcome though. Thanks!

@Xeng Thao 

Self directed means different things.  To a Wall Street firm like Fidelity, it means "you choose which stocks & mutual funds", but would not allow for real estate.

A truly self directed IRA will offer the ability to invest in traditional asset classes like stocks, as well as anything the IRS rules allow for - including things like real estate.

While there is good info (and some not so helpful) online, the best way to learn is to speak with at least one professional in the field.

@Xeng Thao 

while Fidelity may refer to their account as 'self-directed' it has a lot of limitations and is not really self-directed in the true meaning of this word.

You can direct your investments with Fidelity, but only to the extend of the investment choice that they allow (which is confined to the stock market). You can not do real estate investing with Fidelity IRA, you need a custodian who will not place investment limitations other than those that are prohibited by the IRS.

Thank you both. I will halt my rollover to Fidelity the and find a different place to put it.

Lets us know if you have other questions. There are many experienced self-directed IRA investors and service providers that can help you!

If you are interested in investing in RE and I suspect you are if you are on this blog use a self directed IRA. Just google Self Directed IRA's. There are many available as more and more interested investors learn of what they can do for RE investors.

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