Owning real estate in your IRA

Yes you can own real estate in your IRA and I encourage you to do so.  

Here's how it's done:

You start an LLC corporation and roll the money from your regular IRA into a "self directed IRA.  From there you are issued a checkbook from your local bank.  The new corporation writes all the checks and gets all the income from the rental property. You CANNOT mix personal funds.

Banks will lend you money to buy the rental property.

Example: You have 200,000 in your IRA. You open a self directed IRA and transfer 100k.  You find a home for 100,000 and pay cash for it, assuming it needs no repairs, you rent it out for 1,000/month. Your IRA "collects" that rent returning it to your IRA.  

Rules:  You cannot live in the house or rent it to any family!  You cannot work or pay yourself or family members to work on it for you.  

You can also mortgage the home, instead of a 100k home you find a 200k home, you put down 100k from your IRA and your IRA borrows the rest from the bank. This triggers tax consequences so you need a very good accountant.

These are relatively easy to set up, but you need GOOD record keeping as it is "self directed" because you are doing all of the work.

Cost of set up is around 2,000.00