Now that we’ve established that you can invest in real estate through an IRA, the obvious question becomes, “How can I get me on of them things?” Lucky for you, we just happen to know the answer. Since the first iteration of a traditional IRA was created in 1974 with the Employment Retirement Income Security Act (ERISA), these accounts have become a ubiquitous part of the American retirement landscape.
Over the intervening years, Congress has expanded and delineated the definitions even further, so that now we have an entire spectrum of IRA’s available for your investing pleasure. You’ve probably heard of some or all of them like:
• Rollover IRA from 401K, etc
• SEP IRA
• Traditional IRA
• Solo 401K
• Simple IRA
• Roth IRA
• Self-directed IRA
It’s that last one, the self-directed IRA, we’re going to focus on. Part of the original ERISA allowed for self-directed accounts. The term “self-directed” means exactly what you think. You get to control the selection and direction your investment portfolio takes. You can buy notes, limited partnerships, commercial paper, and…real estate. As you might imagine, the self-directed aspect of this particular type of IRA dovetails neatly into the Empowered Investor theory of investing. In fact, if you were to dredge your memory back to the day you read about Jason’s 10 Commandments of Successful Investing™, you might remember that commandment #3 is “Thou shalt maintain direct control.”
With the self-directed IRA, you ARE in control. We like that.
