Diversify Your IRA Portfolio By Investing In Real Estate

Real estate is the most popular investment asset for Self-Directed IRA investors. An IRA can purchase real estate the same way you can outside of an IRA – Cash, through entities, or with a mortgage.

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Using An IRA To Invest In Real Estate Offers Several Benefits

  • Greater profit potential
  • No rental income taxes
  • Tax-deferred or tax-free growth
  • Added diversification
  • Decreased volatility
  • Hedge against inflation
  • Tangible asset




Paying for real estate with cash is simple and straightforward. It is the fastest way for your Self-Directed IRA to purchase real estate.

  • IRA pays 100% of the purchase price of the property
  • IRA owes 100% of all expenses
  • IRA collects 100% of all the income – tax-free!

Benefit: Competitive advantage over other investors who need financing to purchase the investment property!



You can use entities, such as Limited Liability Companies (LLCs) and Limited Partnerships (LPs), to purchase real estate.

  • Self-Directed IRA purchases a fractional interest of the entity alongside other investors by pooling monies to buy more properties or bigger deals your IRA can’t afford on its own
  • Other investors can use their personal money or their IRA funds to partner (co-invest) with your Self-Directed IRA
  • Self-Directed IRA owes pro-rata interest for all expenses within the entity

Benefit: Your IRA collects a pro-rata share for all investment income – tax-free!



Your IRA can obtain a mortgage to purchase real estate. This method of payment has different requirements than that of a personal mortgage.

  • The Self-Directed IRA, not the IRA Account Holder, is the Borrower (personal credit score not used to approve the IRA loan)
  • The IRA loan must be non-recourse (no personal guarantees) mortgage
  • Typical down payment for an IRA non-recourse loan is 30%-50%
  • Property must have rental income to pay mortgage
  • Self-Directed IRA will own 100% of the property subject to the mortgage
  • Self-Directed IRA collects 100% of all income
  • Self-Directed IRA pays 100% of expenses including mortgage

Benefit: Your IRA savings can be leveraged to buy higher-priced and/or multiple properties!

Note: 100% of the investments in real estate that your Self-Directed IRA is making must be for investment purposes only. You can’t personally use your real estate investment to live in or as a vacation home because that is considered self-dealing.

Ready to invest in real estate with your IRA? Get started here.

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