Calling All Realtors: Self-Directed IRAs/401(k)s are potent real estate tools for buyers and sellers alike!

Don’t quite have enough money to seize an incredible opportunity? Is a very interested client short on cash? Are you looking for a way to solve these problems and more, while simultaneously growing your retirement fund?

With a Self-Directed IRA or Self-Directed 401(k) from American IRA, LLC, you can invest in almost anything – including real estate and private lending!

Real Estate in your IRA

Most kinds of real estate can be invested in. Singles, doubles, condominiums, apartment complexes, even land. You can then rent out, resell, or just hold the real estate you purchased. If you want to give a client a non-recourse loan so that they can afford to buy from you, you can do that, too! As long as you avoid prohibited transactions (explained later), almost anything is possible with a self-directed IRA.


You can also purchase a home for your retirement with a self-directed IRA. Any property you purchase with a self-directed IRA is considered part of your retirement fund. When you retire, you can take the property as a distribution, meaning that if you buy and rent out a beautiful home today, you’ll be able to live in it when you retire!

Loans and Partnerships

How many times have you been in this situation: A client seems extremely interested in a property, but they’re short on cash, and they can’t secure a loan with their bank? Do you have to end the negotiations? Not necessarily! With self-directed IRAs, your clients can loan money to each other or even to themselves from their own accounts, for the purpose of buying real estate. This could allow a single person to buy a property they never realized they could afford, or allow a group to purchase a property together with their retirement funds. As long as your clients do their due diligence before making loans, this can be a surefire way to increase your own profits and allow your clients to afford your properties – a win-win for both parties!

All lending done through self-directed retirement funds must be non-recourse, and must avoid prohibited transactions, as described later. This lending can only be initiated at the first transaction (the purchase itself), and all future expenses involving the property (upkeep, repairs, inspection, etc.) must be paid for by the retirement account at the same percentage of the total.

Example: A man named David G. partners with his wife, each contributing 50% of an $18,900 real estate purchase with their respective IRAs. The purchase was titled:

American IRA, LLC FBO David G., Roth IRA, an undivided 50% interest and

American IRA, LLC FBO Mrs. David G., Roth IRA, an undivided 50% interest

From that moment forward, all expenses involving said property (maintenance, repairs, lawnwork) must be paid from their IRAs in the same proportions, 50% each. All profits are similarly split.

Note: David G. ‘Partnered’ with his wife’s self-directed Roth IRA to make the purchase. Even though he cannot purchase from nor sell to his wife or other disqualified persons, he CAN partner with himself and/or any other person(s) and/or any other person(s) IRA at the TIME OF ACQUISITION.

David G. was one of American IRA’s real clients, who grew his account from just $6,800 to a monumental $293,000 in less than five years! We offer a FREE educational DVD about David G.’s success story, among other useful information. If you’re interested, click here to order your FREE DVD!

Hold or Flip

For those who just want to increase the value of their IRAs, holding and flipping of real estate are both viable strategies. “Holding” refers to the concept of buying property with the intent of selling it as-is later, when the housing prices are higher. (A held property can also be rented out in the meantime, of course.) “Flipping,” on the other hand, refers to buying a property that is in need of repairs, fixing it up, and reselling it immediately at a profit.

Prohibited Transactions

Any improper use of an IRA or Plan by the plan participant or disqualified person is a prohibited transaction.

Disqualified person(s):

  • An employer of any participants in the plan
  • A 10% (or more) partner in a partnership having the plan
  • A fiduciary of the plan (This is you and any advisors)
  • A highly compensated employee (earning 10% or more of the employer’s yearly wages)
  • An employee organization, any of whose members are covered by the Plan
  • A person providing services to the Plan
  • Members of your family (spouse, ancestor, direct descendants, and any spouse of a direct descendant)
  • Corporations, partnerships, trusts, or estates in which you own, directly or indirectly, at least 50% the:
    • Total voting stock or the value of all stock of the corporation
    • Capital interest or profit interest of the partnership
    • Beneficial interest of the trust or estate

Click here to learn more about prohibited transactions.

Open An Account Today!

Ready to self-direct your retirement fund with us? Fill out the appropriate New Account Forms, or call us toll-free at 1-866-7500-IRA(472)!

Helpful Resources

Account Opening Instructions

Promissory Note Closing Instructions

Property Closing Instructions

To learn more about American IRA, LLC and self-directed IRAs/self-directed Solo 401(k)s, please contact our office at 1-866-7500-IRA(472).