How to Invest in Passive Real Estate With Your IRA

I’m all for alternative investments and diversification when it comes to long-term investing.  Today I’m going to speak about how you can use your IRA to buy real estate.

How IRA Real Estate Investing Works

I started this blog when I converted my SEP IRA plan managed by a financial advisor to a self-directed IRA plan.  Since then, I’ve made some good moves, and some bad moves, but I’ve been able to make moves on my terms, that suit my risk profile and long term financial goals.  For example, I wrote a few months ago how you can accumulate domains and websites in your retirement account.  Pretty cool, right?  Another avenue that has been very cool is also putting gold into your retirement.  Read about that on this page.

When you like to invest in certain things, why limit yourself to a short term plan to hold and trade them?  You can use your retirement, where you SHOULD have a lot of money socked away to play with and use towards your golden years, to buy more of the things you believe in.

One thing I believe in, that a financial advisor won’t help you with nine times out of ten (due to the lack of money they will make doing so) is buying real estate.  Most financial advisors are very keen on buying property for wealth building, but they won’t be able to connect the dots for you because it would require you to use a self directed IRA which in turn would take money out of their pockets

With the self-directed IRA, you control where your investment dollars go.  You can also enjoy saving tens of thousands of dollars over the years on fees and my favorite part – diversify your portfolio from equities, mutual funds, and the such.

I did my first real estate deal (as part of my IRA) in 2018.  I’m very excited about the investment, and I’m aiming to make another in 2019.  Any gains made on these investments won’t be taxed until I actually retire and begin to withdraw the money from the IRA.  In my first transaction, I was part of a group of investors that put money into a new food hall in Minneapolis, Minnesota.

You can buy buildings, residential real estate, land, and much more.

As mentioned before, you can also use your IRA to buy precious metals, (I recommend this company.)  Other alternative investments include private hedge funds, gas, and oil.  You have to make sure you abide by the rules, however, and consult your tax advisor prior to just going rogue and buying stuff through your IRA.  There are some things that aren’t kosher with the IRS, such as buying a vacation home for personal use, or buying a property to rehab and doing the fixing yourself, and even buying a property to rent to a family member.  The thing is, the transaction is supposed to be 100% passive, so always keep that in mind as a rule of thumb.  If YOU benefit from it by using it, rule it out.

Consult your tax advisor to see if a self directed IRA is right for you. I’ve had one for four years now and it allows me to take chances with my retirement that weren’t available to me through a classic financial advisor-controlled retirement plan.

Rate this post
Tim Schmidt


Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started this website to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.