Invest in Real Estate with a Self-Directed IRA

Invest in Real Estate with a Self-Directed IRA

I’ve been reading how in the US investors have access to a financial instrument called a Self-Directed IRA which allows them to invest their retirement fund into real estate or to use it to invest in a business. It’s a great idea and is particularly attractive in the current turbulent market where investing in traditional stocks and shares seems like a recipe for disaster. Here’s a diagrammatic overview of how it works

The starting point of the process is your current retirement funds which would need to be moved to a new Self Directed account with a Custodian, which can be a bank or savings and loan association or any other entity that has the approval of the IRS to act as Custodian. The safest way forward from this point is to set up an LLC (Limited Liability Company); which not mandatory this offers you extra flexibility and legal protection by limiting your personal liability. The Company than affords access to your funds to allow you to start investing in real estate if this is what you wish, or you can use this Company as the vehicle for your business and or to finance future initiatives.

It’s an interesting idea but I’m not sure we have a similar concept here in the UK. One word of warning however; if you do decide to go down this path, make sure you get sound investment advice as at the end of the day, this is your future you are playing with.

2 thoughts on “Invest in Real Estate with a Self-Directed IRA

  1. Being able to self direct your IRA and other retirement funds into real estate, businesses, or many other investment types is a great way to diversify any portfolio and build tax free wealth. Great job summarizing this opportunity and I like the easy to follow graphic.

    If anyone would like additional information, check out Equity Trust Company Equity Trust Company is a custodian that can provide you the service you need to start making self directed IRA investments.

Leave a Reply

Your email address will not be published. Required fields are marked *