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Real estate in IRAs

Posted by: Dean Foust on July 1, 2005

A fascinating story in the New York Times earlier this week noted that some investors—burned after the stock market bubble burst earlier this decade—put part of their IRA or retirement account into real estate. Real estate bears are going to view this as another sign of the apocalypse, but it strikes me if done right a good real estate investment could throw off a nice stream of income for the golden years. That said, I certainly wouldn’t try this in one of the bubble markets like southern California, where the runup in housing prices means that monthly mortgage notes exceed likely rental income. I’d be curious to know if any of our readers have tried this and what their experience has been so far. Any one have personal experience here?

Reader Comments


July 13, 2005 12:07 AM

In a number of advanced education classes to obtain my CRS designation (I am a REALTOR and Broker/Owner of an small, but #1 in the market, independent real estate office) the instructors spoke of rolling over funds from traditional retirement accounts (IRAs, SEPs, etc) into a Real Estate Investment Trust. Living and working in our conservative Midwest community in West Michigan (Allegan, population about 4000, located between Grand Rapids, Kalamazoo, Holland and the hot-hot-hot Lake Michigan shoreline), we were hesitant to pursue this option without having a local contact that we could sit down face-to-face. Having recently located a local "independent" bank that handles such REIT rollovers, we are excited to finally be in "control" of our retirement investments - investments that we have local confidence in. Our community does not experience huge fluctuations in real estate values realized in the larger markets with "real estate bubbles" (ready to burst?), just slow and steady 5-10% annual appreciation. "On the brink of discovery," we sincerely believe that our small community will continue strong "reasonable" growth, which will bode well for our real estate investment within our REIT. Our first purchase identified for our REIT will be a small residential rental in a zoned commercial area on a state highway next to our new office building that we built recently - through the standard "create-a-new-LLC, owe-the-bank, depreciate-and-pay-the-capital gains-when-sold saga." This new rental in the REIT will pay the 50% loan-to-value mortgage, plus the experienced appreciation will certainly produce a nice little profit when we are ready to sell in our retirement years. My husband feels the day traders and unpredictability of the world markets makes the stock market too unpredictable. Our past losses (after our extreme gains) are hard to accept. We are confident that our decision to rollover a bulk of our retirement accounts into our REIT will provide us the control over our retirement that we desire. Would I consider this in the "hot" markets around the country. NO! Come to our "little" market and find a life style and growth that is "real." We'll keep you posted as to the process and our "success!"

Marilyn Kennedy

February 27, 2006 11:22 AM

Hi. I am researching self-directed IRAs and intend to sell alot of my stock to purchase real estate in my area of Phoenix-Scottsdale, AZ. Like the woman from Michigan, I am a CRS (Certified residential Specialist), a Realtor for 30 yrs. in March.
I believe our market is back to "normal" and there will be good buys this year. Please tell me where I research self-directed IRAs with real estate and who do I go to?
Thanks. Marilyn Kennedy

Damian Musello

September 14, 2006 10:27 AM

Also in real estate and the stock market. After the two recent stock market sell offs that burned my considerable gains, I'm also looking at RE IRA's although the information I've gotten is sketchy. Why are there so few administrators to turn too? I'm interested in hearing from those who have invested. Thanks. Damian Musello

Jose Jacques

December 3, 2008 2:44 AM

Anyone ever been to COSTA RICA? Experts compare buying coastline property here to buying in places like Hawaii or the California Coast some 30 yrs ago...I'm a broker for an American developing co. here in Costa Rica called Wellington Asset Management and we are looking for people who want to make money in the hottest ticket of real estate in the world...we have succesfully helped invest hundreds of people from all over the world millions of dollars into our gated subdivisions here in our cental Pacific coast of Costa Rica and none of our clients have lost money down here, nobody. Our lots we're selling have ocean views which in 8 yrs from now they are going to be worth $1 million dollar views . A couple of my clients who bought lots in our latest development utilized their IRA to buy property with us here in Costa Rica. IRAs are investment vehicles people are not aware they can turn into real estate profit and in the safest and hottest market of real estate in the world Costa Rica !!! Get in touch with me so I can get you some info and can tell you all about this. My email is

alan potts

March 19, 2009 9:11 AM

Yes, using IRAs to purchase real estate has been around for many years. Real estate is an investment option just like stocks, bonds and mutual funds. You just have to find the right custodian to handle your investments, it your choice.

alan potts

March 19, 2009 9:11 AM

Yes, using IRAs to purchase real estate has been around for many years. Real estate is an investment option just like stocks, bonds and mutual funds. You just have to find the right custodian to handle your investments, it your choice. You can download a guide at


October 13, 2009 9:01 PM

couldn't have said it better Allan.

find a realtor

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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