Using a Self-Directed IRA to invest

[Stephen Grindle]

Hey friends, 

I'm considering using a Self-Directed IRA to invest in a short-term vacation rental. So two questions:

1. Should I transition my current Traditional IRA to a Self-Directed ROTH IRA or keep it as a Self-Directed TRADITIONAL IRA before investing? I understand that a ROTH allows me to have tax-free gains, but I also know that there are limits on how much I can contribute to this vehicle each year. Wondering if others have experience with this?

2. I've read that my Self-Directed IRA can also own an LLC. I understand the legal protection this can provide when purchasing property, but are there any downsides to purchasing property through an LLC owned by my SDIRA?

Thanks for your help!

[Todd Goedeke]

@Stephen Grindle if you are self employed consider rolling over your IRA to a Solo401k. The advantages of using leverage without UDFI implications in a Solo401k can vastly increase your ROI. You can always convert to a Roth within your Solo401k.