Using IRA money for Real estate investments

[Abdul Azeez]

Folks - as a working professional with 401k with current employer and IRAs from previous employers do I have the ability to redirect some of the money into real estate investments or is this mostly only for self employed folks?

[Dmitriy Fomichenko]

@Abdul Azeez Do a quick search for self directed IRA on BP and you will find examples and articles on this topic. Basically a traditional IRA account, with Vanguard for example, doesn't allow you to invest in real estate. Instead, you will need to find a plan provider who can help you set up a self directed IRA LLC. With that, you can start investing your IRA money in real estate and do not have to go through a custodian before making an investment.

This strategy works for both regular and Roth accounts. However, there are certain rules you need to go by. For example, the money can only go in and out from your IRA. You can't use your personal money to pay for any expense from the IRA property.

See this blog post for more details: https://www.biggerpockets.com/blogs/2810/51528-how-to-boost-your-real-estate-returns-with-a-self-directed-ira