Thinking about rental properties using Self Directed IRA.

[Eric Schwake]

My first post to BP.  Posted the same to Reddit but think there might be some different opinions here.

I've currently got an IRA with Betterment that has around 180K. I've been looking at RE Investing as an option to get my money out of the stock market. I currently have a full time job where I receive pretty decent bonuses and RSU's so long term I'd like to use that income for RE investing but it will probably be at least a year or two before I can do that because I'll probably use that income this year to buy a house for my family.

So short term my idea was to move the money in my Betterment account to a self directed IRA. I then was planning to use the self directed IRA to buy property through Roofstock. Since this will be my first real estate I am trying to do it fairly hands off and the local real estate market where I am doesn't appear great for cheaper rental properties.

As part of this plan I suppose I'd have a couple options. 1) Buy one or two properties using cash from the self directed IRA. 2) Financing 3-4 properties using funds from the self directed IRA. Because I'm new to all of this I tend to favor option one. The other nice thing about that is that I wouldn't have to worry about mortgage payments. I know that having multiple properties through financing has it's benefits in a normal scenario but from what I've read I could have some issues with UBIT if I do that since I'd be using a self directed IRA.

So having said all this does it make sense to move my money out of Betterment and use it for rental property investing? Is it a good idea to use Roofstock especially considering I want to stay fairly hands off and I don't have great property options locally? Should I just wait until I can start doing rental property investing with cash on hand? I do have a couple meetings set up with local CPA's to see what they recommend and I also will be speaking with Roofstock soon to learn more about them as well. I figured I would check with you all though as well to get any advice you have to offer because I know there is a lot of expertise here.

Thanks in advance for all your assistance.