7 Real Estate Investment Options for Your Self-Directed IRA

Investing in real estate with a Self-Directed IRA (SDIRA) can be a powerful way to build retirement wealth through alternative assets. From rental properties to tax liens, SDIRAs allow you to diversify your portfolio and take control of your retirement strategy, beyond traditional stocks and bonds.

Here are seven real estate investment options you can hold in a Self-Directed IRA: ‍

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1. Residential Rental Properties

From single-family homes to duplexes and condos, rental properties are one of the most popular real estate investments in SDIRAs.

• Generate monthly cash flow through rental income
• Potential for long-term appreciation
• All expenses and income must flow through the IRA

Pro Tip: You (or other disqualified persons) cannot live in or personally use the property. ‍

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2. Commercial Real Estate

Invest in office buildings, retail spaces, warehouses, or multi-use developments.

• Often higher rental yields than residential properties
• Longer lease terms = more predictable cash flow
• Portfolio diversification

Work with a commercial broker and conduct due diligence to evaluate the property’s performance potential. ‍

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3. Raw Land or Undeveloped Property

Vacant lots, farmland, or acreage can be a strategic long-term play.

• Lower upfront cost compared to developed properties
• Potential for appreciation or development resale
• Great for land banking, or leasing for passive income (e.g., billboard, solar, farming)

All taxes and maintenance costs must be paid through your IRA account. ‍

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4. Real Estate Syndications

Pool your IRA funds with other investors to participate in large-scale real estate projects, such as apartment complexes or commercial developments.

• Access high-value deals with a lower capital requirement
• Completely passive investment
• Typically structured through private placements ‍

Make sure the sponsor provides proper documentation and that the offering is IRA-compliant. Be sure to perform your due diligence on each deal and get help from your attorney or trusted financial planner to review the offering. Remember, not every pretty slide deck is offering a deal that fits your needs. ‍

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5. Real Estate Investment Trusts (REITs)

REITs can be publicly traded or private and offer exposure to professionally managed real estate portfolios.

• Diversified real estate exposure without direct management
• Liquidity (with publicly traded REITs)
• Steady income via dividends

Check if the REIT is IRA-eligible and confirm how it is structured. ‍

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6. Promissory Notes Secured by Real Estate

Lend funds from your IRA to borrowers, secured by a deed of trust.

• Earn steady interest income
• Choose your terms, interest rate, and repayment schedule
• Backed by tangible real estate collateral

Work with a title company and attorney to draft the note. ‍

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7. Tax Liens and Tax Deeds

Buy tax liens or deeds from local municipalities when property taxes go unpaid.

• Often acquired through auctions
• Potentially high returns if the lien is repaid with interest
• If not repaid, you may acquire the property at a steep discount

Due diligence is key—understand the local rules and risks before bidding. ‍

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Final Thoughts

A Self-Directed IRA opens the door to a wide range of real estate opportunities that go far beyond conventional investing. However, with greater control comes greater responsibility. Make sure you:

• Work with a qualified Self-Directed IRA administrator
• Avoid prohibited transactions and disqualified persons
• Consult a CPA or financial planner to ensure your investments align with your retirement goals ‍

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Ready to Build Real Estate Wealth in Your IRA?

Did you know you can do this inside of your tax-advantaged retirement account?

Mountain West IRA can help you get the process started with your choice of real estate investments inside your SDIRA.

Have any questions?

📞 Call us today at 866-377-3311

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