Very often financial advisers only advise to put IRA money into stocks and bonds and it means you may not know anything about self directed IRA real estate. So, not everyone has them, because not everyone is aware it is possible to have them. You should know that self directed IRA real estate investments make good sense.

If you don’t have enough time to spend educating yourself on other areas that the IRS allows you to invest tax-free or tax deferred retirement funds. In the information below you will find and learn a few important things concerning this type of investments.

When considering self directed IRA real estate, first of all, you should be aware of the next basic points:

- First of all you need to remember that your IRA cannot buy property which is already owned by you or a disqualified person. A disqualified person is your spouse (parents, grandparents or great grandparents, children and their spouses, grand children and great grand children and their spouses).

- Secondly, you or any disqualified person from the list previously mentioned, cannot receive indirect benefits from property owned by your IRA, such as taking a vacation in resort property or renting office space in commercial property your self directed IRA owns.

- The third thing you should also keep in mind is that your IRA needs to be tiled in the name of the IRA, not in your personal name.

- The forth, the real estate in an IRA doesn’t have to be 100% funded from your IRA and you can partner with a friend or family member. Let’s have an example. You found property for your self directed IRA real estate account that you need $100,000 in order to purchase it and your IRA account only has $35,000. So, it possible that your friend could provide the other $65,000 and it means that your friend would own 65% of the property and your IRA would own 35%.

- The fifth, in the case that your self directed IRA uses financing to purchase real estate, the loan must be non-recourse, and your IRA must pay unrelated business income tax or UBIT.

- The sixth, as concerning all expenses (maintenance, improvements, property taxes, and any other); all of them must be paid from the IRA. Remember, no personal funds may be used for any expenses.

- The seventh, and the last one in this list, is that all income from the IRA must also go back into the IRA account. So, you may not deposit any money, such as rental income into your personal account.

In order to fill out all the paperwork required by the IRS you will need a self directed IRA custodian and you can be sure that he or she will be very familiar with each of the mentioned points. It is really important not let the details deter you from looking into self directed IRA real estate investments. In addition, there are companies that can help you through the entire process, even the most important part of finding the right properties to bring you great returns using this kind of investments.

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