What Is A Real Estate IRA? Which Real Estate IRA is Best? [EPISODE #261]

by | Apr 20, 2017

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What Is A Real Estate IRA? Which Real Estate IRA is Best? [EPISODE #261]

by | Apr 20, 2017

The Big Idea

What is a real estate IRA?  Does it actually possess the unthinkable ability to invest your IRA into real estate?  Who offers the very best real estate IRA in the market today?  That's what's in Episode #261 of Self Directed Investor Talk

Points To Ponder

  • Come to meet Bryan at the ThinkRealty National Conference and Expo in Dallas, Texas on April 29. A few free tickets available if you email Bryan at
  • A “real estate IRA” is theoretically an IRA that’s better suited for purchasing real estate than other IRA’s
  • Under the law, there’s no such thing as a real estate IRA (or a “self-directed IRA”)!
  • That name is used to get your attention, because big dollars are stake for custodians, some of which willfully mislead with statements like these:

"Technically speaking, a Self-Directed IRA is not any different than any other IRA (or 401k)" -- https://www.trustetc.com/self-directed-ira/faqs

"A real estate IRA is technically no different than any other IRA (or 401k)." -- https://www.trustetc.com/real-estate-ira/what-is-it

  • Those statements are patently false and, Bryan suspects, willfully deceptive. (Listen to podcast or see transcript for further substantiation.)
  • Bryan’s 5 recommendations if you want to buy real estate in an IRA:
    1. Consider buying real estate OUTSIDE your IRA rather than INSIDE it
    2. No need to use a so-called “real estate IRA”… any self directed IRA will do
    3. It is possible for your IRA to get a loan to buy real estate
    4. Use a solo 401k (aka self-directed 401k) rather than a self-directed IRA if possible (here's why)
    5. Consider taking title to real estate in an LLC rather than directly in your IRA
  • A few good custodians for real estate transactions: Advanta IRA, uDirect IRA, Quest IRA
  • The Very Best option for buying real estate with your retirement funds is available here
  • Please read transcript or listen to full episode for further substantiation.
Full Transcript

What is a real estate IRA?  Does it actually possess the unthinkable ability to invest your IRA into real estate?  Who offers the very best real estate IRA in the market today?  I’m Bryan Ellis.  I’ll pull back the curtain for you right now in Episode #261 of Self-Directed Investor Talk.

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Hello, Self Directed Investor Nation!  Welcome to the show of record for savvy self-directed investors like you, where we help you to find, understand and profit from the finest alternative investments available today… all while shielding those profits from the sticky, greedy, ever-growing tentacles of Uncle Sam!

Hahahaha you people just want to know who has the best real estate IRA, don’t you?  Hahahaha… stick with me, people!

This is Episode #261.  That means, of course, that you can find everything about this episode you’ll hear in this show – and a whole lot more you won’t hear in this show – by visiting SelfDirected.org/261 … again, that’s SelfDirected.org/261.

A quick note, my friends… if you are in or near the great city of Dallas, Texas on Saturday, April 29, I’ll be in town that day and would LOVE to meet you.  I’ll be there as a featured speaker for a very special event called the ThinkRealty National Conference and Expo, a great event for investors, rehabbers, agents, flippers, landlords, wholesalers and ANYBODY who makes their income from real estate.  There’s more information at SelfDirected.org/expo … SelfDirected.org/expo.  And a quick heads-up – I do have just a few tickets that I can give away to my own friends at no cost, so if you’re into the real estate business, you’d like to come to the ThinkRealty National Conference and Expo, and you and I can be friends, then just drop me an email to to see if I still have any available tickets. 

Ok folks… the REAL ESTATE IRA… sounds kind of cool, doesn’t it?  An IRA that’s specially designed for real estate transactions?  Seems absolutely perfect for real estate investors like you and me, doesn’t it?

And as it turns out, there are nearly 20 MILLION results if you type that phrase into Google… and I’m not sure if you know this, but a lot of the people who are listed at the top of google pay to be there, and the competition is so brisk for that term that Google tells me, upon a bit of investigation, that I should plan to pay over $10 per click if I’d like to be at the top of that list… you heard that correctly, folks, $10 per CLICK.

That’s why it’s so valuable to be the BEST real estate IRA… which I’ll tell you about in just a moment.

But think about that… $10 per CLICK… per CLICK… Seems like a lot of money to me, particularly for something that doesn’t even exist.

WHAT?

That’s right, my friends… the real estate IRA doesn’t exist!

Nowhere in the law will you find mention of this thing called a real estate ira.  It’s just not there!

For that matter, you won’t find mention of a self-directed IRA, either.

All there is is the good ole’ IRA… and a very short list of assets that can never be bought within an IRA.  Fortunately, real estate isn’t on that list.

So I guess it’s kosher to call an IRA a real estate IRA, but the truth is it’s no different from any other IRA.

So why the attention on this topic?

Well, my friends, the “powers that be” among the self-directed IRA custodians have a vested interest in your thinking that their IRA is better than any other IRA when it comes to empowering you to invest in real estate.

But… that may be less true than they’d like you to believe.

Look, there are some good custodians out there, for sure… but there are some who are totally happy to lie to you rather directly.

Here’s an example – and I’m not going to say which custodian this is, but you’ll be able to figure it out with the information posted on today’s show page at SelfDirected.org/261 – but there’s a custodian that ranks very well in the search engines for the term “self directed IRA”, and the very first sentence of their FAQ page about IRA’s says these words:

"Technically speaking, a Self-Directed IRA is not any different than any other IRA (or 401k)" -- https://www.trustetc.com/self-directed-ira/faqs

"A real estate IRA is technically no different than any other IRA (or 401k)." -- https://www.trustetc.com/real-estate-ira/what-is-it

Well, folks, that’s a load of garbage shrouded in what appears to be the truth, but isn’t.  Yes, a self-directed IRA is the same as any other IRA in a technical sense.  Totally true.  But is it the same as a 401k in a technical sense?

NO!  The differences are HUGE… HUGE… HUGE!  The differences are practically like night and day.  But all of the differences make it clear that 401k’s – particularly solo 401k’s – are the superior tool for anyone qualified to have one, and that doesn’t fit the narrative of this particular custodian, so they’re willfully misleading you about a fundamental core issue.

So, back to real estate IRA’s.  Look, here’s my recommendation if you want to invest in real estate through your IRA:

  • First, understand that if you have the choice of whether to invest in real estate through an IRA or to do the same deal OUTSIDE of an IRA, you’ll frequently be better off by SKIPPING the IRA, because the tax laws are already so favorable to real estate that the IRA may actually just add an unnecessary layer of complexity. There are actually 5 REALLY good reasons to avoid real estate investments in your IRA, and there’s a link to that information on today’s show notes page at org/261.
  • Second, realize that ANY truly self-directed IRA custodian can accommodate real estate purchases. While there are certainly custodians who are more experienced with real estate deals than others, any custodian who is WILLING to accommodate a real estate transaction is technically able to do so.
  • Third, don’t be fooled by the conventional media who will say that it’s impossible to get a loan to buy real estate in an IRA. It’s totally possible and done every day.  But you’ll definitely need to work with a lender who understands this type of loan, because it’s structured a little differently than normal bank loans.  But note that if you do use debt financing in your IRA, your IRA may be subject to taxation from year to year rather than just during retirement.  Talk with your tax advisor about this.
  • Fourth, if you have the option to use a self-directed 401k – aka a solo 401k – rather than using a self-directed IRA, you should SERIOUSLY consider doing so. The benefits are myriad and I’ll link to some of those at SelfDirected.org/261, but suffice it to say this:  The 401k eliminates nearly all of the worst risks of using an IRA, and is actually MORE tax beneficial than an IRA.
  • Fifth and last – consider acquiring real estate in your IRA via an LLC rather than directly through your IRA. There are many reasons for this, one of the biggest of which is that it will make it easier for you to switch IRA custodians in the event that you become dissatisfied with your custodian.

So, where do you find the BEST real estate IRA?

People, people, people… Look, there are several really good custodians who are well experienced at doing real estate in IRA’s.  I know that Advanta IRA has a great reputation.  I think the same may be true of uDirect IRA and Quest IRA seems to have a lot of fans.

And all of that is GREAT!  You’d likely do well with any of them.

But do you want the ULTIMATE IRA or 401k for REAL ESTATE INVESTING?  Because frankly, folks, what you need is a bit beyond just a custodian.

But we are out of time for today, so do this for me:  Stop by SelfDirected.org/261 and learn about the very best real estate IRA strategy that exists today.  That’s SelfDirected.org/261.

My friends, it’s great to be with you… invest wisely today, and live well forever!

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Bryan Ellis is host of Self Directed Investor Talk, America's #1 radio show and podcast for affluent self-directed investors.  He's also an expert in self-directed IRA's, solo 401k's and turnkey rental property investing... at least, that's what his wife tells him 🙂  He's a contributor to well-respected publications like TheStreet.com, Entrepreneur and ThinkRealty.  Bryan lives in metro Atlanta, Georgia with Carole Ellis - his wife, business partner and best friend - and his 4 children ranging in age from 2 to 19.