Five Things Realtors Should Know About the Self-Directed IRA

A Self-Directed IRA is a powerful tool for aspiring retirees to build wealth by focusing on the assets they want to focus on. One such asset class: real estate. That is why it is so vital for realtors who want to know their market to understand that some real estate investors might be looking for the next great real estate opportunity as part of their retirement strategy.

With that in mind, we have taken some key facts about the Self-Directed IRA that every realtor should know. Here are what realtors should know about this unique retirement arrangement:

  1. The Self-Directed IRA Allows for Real Estate Investing

This may be one of the most basic and fundamental ways to understand the Self-Directed IRA: the IRS does not have many restrictions when it comes to the investment types held in an IRA. A Self-Directed IRA holder can choose from assets as diverse as real estate and precious metals. It is not difficult to see how this might be relevant for a realtor.

Do not discount a potential client because they are using a Self-Directed IRA as a way to build retirement wealth. These investors may actually prove to be more savvy and knowledgeable about real estate than you might have imagined; they are just going about their real estate investing in a way that is not always “traditional.”

  1. Self-Directed IRAs Allow for Non-Recourse Financing

When you think about an ideal client—someone who could potentially invest in real estate now—you might not think of someone who is looking to make a retirement investment. That is because typically, many people do not see loans and leverage as a way to build a retirement nest egg. But it is possible using a Self-Directed IRA—real estate investors can use non-recourse financing to ensure that they utilize leverage to make a real estate investment. That means that even if a client does not necessarily have the current funds to make the investment you might be pointing out to them, they might still be capable of making it using a Self-Directed IRA.

  1. Real Estate Grows Inside a Retirement Account Tax-Free

If you need a way to push the incentives of investing in real estate, a retirement account is the way to go. Rental income and sales proceeds will go into the Self-Directed IRA, not to the individual, which means they can then grow tax-free. This gives you, as a realtor, the ability to save your clients a lot of money simply by broaching the subject of the Self-Directed IRA as an investment option. And those who look at real estate as a pure investment will be excited to know that they can guarantee themselves higher returns simply by going about it the right way.

  1. There are Restrictions, but Investment Real Estate is the Key

No, a client cannot invest in their personal home through a Self-Directed IRA. That means they cannot use real estate they hold within this retirement account for personal needs. However, just about any other type of investment real estate is perfectly acceptable—including single-family homes, commercial property, and even apartment buildings.

  1. Diversification is the Key to Success

Anyone looking to expand their retirement portfolio and build their wealth on solid foundations of diversification are looking for a way out of 100% stocks and bonds. A Self-Directed IRA presents exactly that opportunity. Investing in real estate—or even other options like precious metals—affords individuals the right to build a wide net in their quest for retirement success.

Interested in learning more about how you can help your clients with your knowledge of Self-Directed IRAs? Give us a call at 866-7500-IRA or visit

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