Investing in Multifamily Real Estate with a Self-Directed IRA

You might not realize it but investing in multifamily real estate with a Self-Directed IRA makes solid investment sense. If you are like many retirement investors, you have your money spread among stocks, bonds, and cash according to your tolerance for risk or your proximity to retirement. You probably feel secure with your mix, believing that it protects you through almost any economic downturn or black swan that comes your way.

Stocks are a wonderful long-term investment, but their volatility can be gut-wrenching if a substantial portion of your portfolio is devoted to them (remember back in 2000 when investors saw their equities pull back as much as 50%). And bonds are good for adding some stability and income to a portfolio, but they can decline in value when interest rates are on the rise.

A Self-Directed IRA can add much-needed diversification from typical investments like stocks, bonds, and CDs by allowing you access to alternative investments such as tax lien certificates, precious metals, private stock…and multifamily real estate investments.

Why invest in multifamily real estate with a Self-Directed IRA?

Real estate is a tangible and secure asset. As financier and politician Russell Sage once said:

“Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.”

What’s more, real estate often grows faster than a lot of those traditional investments. Multifamily properties provide greater potential to assist you in building that all-important retirement wealth. And investing in multifamily real estate with a Self-Directed IRA also lets you take a more proactive approach to growing your retirement account.

There are those who choose to buy one rental house at a time, satisfied that two or three single properties are all they need for a secure retirement. Others prefer the convenience of having several properties at the same location, and that is where multifamily real estate investing comes in.

There are substantial benefits

Investing in multifamily real estate with a Self-Directed IRA can provide you with valuable tax advantages. Here are some of them:

  • You can eliminate capital gains taxes.
  • You can eliminate income taxes.
  • You can eliminate dividend taxes.
  • With a Self-Directed Roth IRA there will never be any taxes to pay on the profits from the investments.
  • You can invest your Self-Directed IRA into multifamily real estate without worrying about withdrawal tax penalties

In addition to allowing your investments to grow tax-deferred or tax-free, investing in multifamily real estate with a Self-Directed IRA protects your assets and helps you with estate planning by creating lasting wealth for you and future generations.

Here is how it works

If you do not already have a Self-Directed IRA, American IRA can help you open one. Once it is set up, you will be ready to start investing in multifamily real estate in your new Self-Directed IRA.

You will start by choosing among apartment buildings, townhomes, and duplexes. As with any investment, you will need to do your due diligence—including looking at income and expense records, copies of leases, and rent rolls—to make sure the asset is worthwhile. Comparing the income that was generated in the past to its expenses can help you determine whether or not this is a viable investment.

The IRS has stringent rules for real estate investing

Because the IRS has these strict rules concerning investing in real estate with a Self-Directed IRA, it probably is not advisable to go it alone. Get advice from professionals such as an experienced real estate broker, an attorney, and a financial advisor.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at


Rate this post