Self-Directed IRA Real Estate Investing: 30 Expert Answers to Top Investor Questions (2025)

Ready to unlock tax-free real estate investing?
Contact IRAR Trust Company
to open your SDIRA today. For more tips,
download our free FAQ guide.

Self-Directed IRA Real Estate Investing: 30 Expert Answers to Top Investor Questions (2025)

Self-Directed IRAs (SDIRAs) unlock tax-advantaged real estate investing, allowing you to diversify beyond stocks. This guide answers the top 30 questions from real estate investors, covering everything from funding strategies to IRS compliance.

1. Funding Your SDIRA Real Estate Purchase

4 Key Strategies:

1. Direct Purchase: Use IRA funds for all-cash deals (fastest method).

2. Partnering: Combine IRA funds with other investors (e.g., family IRAs).

3. Non-Recourse Loans: Secure financing without personal liability (collateral-only).

4. Checkbook Control IRA: Streamline transactions via an IRA-owned LLC.

Need a lender list? Download IRAR’s Non-Recourse Loan Guide.

2. Avoiding Prohibited Transactions

Allowed:

• Hiring third-party property managers.

• Renting to non-family tenants.

Prohibited:

• Personal use of the property (e.g., vacation home).

• Partnering with disqualified persons post-purchase.

Learn more: IRS Prohibited Transactions Guide.

3. Tax Pitfalls & UBIT

• UBIT Triggers: Income from active businesses (e.g., LLC-owned Airbnb).

• Exempt Income: Rentals, dividends, interest.

Tip: Always consult a tax advisor before leveraging loans or LLCs.

4. Step-by-Step Purchase Process

1. Open an SDIRA: Roll over funds to IRAR (3–7 days).

2. Submit Documents: Ensure contracts are titled “IRAR Trust FBO [Your Name].”

3. Close the Deal: IRAR reviews and funds within 3 business days.

Download our Real Estate Transaction Checklist.

5. Real-World Example

Sarah used her SDIRA to buy a $250k duplex:

• Partnered with her sister’s IRA (50/50 split).

• Hired a property manager to handle tenant payments.

• Avoided UBIT by reporting only rental income.

6. Top 5 FAQs

1. “Can I rehab my IRA-owned property?” → No—hire a non-disqualified contractor.

2. “Can my kids live in the property?” → No—they’re disqualified persons.

3. “What if my IRA runs out of cash for expenses?” → Liquidate assets or rollover funds.

4. “Are international investments allowed?” → Yes, but verify titling rules.

5. “Can I use a property manager?” → Yes, if they’re a third party.

*Explore all 30 FAQs in our *Free SDIRA Real Estate Guide.

Ready to Unlock Tax-Free Real Estate Investing?

Contact IRAR Trust Company to open your SDIRA today. For more tips, download our free FAQ guide.

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