Self-Directed IRAs and real estate investment.
One popular application of funds in a Pacific Premier Trust self-directed IRA has been direct or indirect investments in real estate.
When it comes to real estate investing with your IRA, you can invest in property for long-term appreciation, rental income, or a short-term flip. You can even benefit from real estate without owning the property itself by using self-directed IRA funds to purchase mortgage notes and trust deeds secured by real estate.
What Are My Real Estate Investment Options?
With a Pacific Premier Trust self-directed IRA, you are free to invest in almost any form of real estate — from condominiums and office complexes to farmland and boat slips. You can invest in:
- Homes, apartments, and condominiums
- Commercial properties such as retail stores, hotels, and office complexes
- Trust deed notes and mortgages
- Raw land and lots
- Other types of property such as farmland, mobile homes, and mineral or timber rights
Key Differences of Holding Real Estate in an IRA
Purchasing and maintaining real estate in an IRA differs from traditional property investments in a few important ways.
The property’s buyer is the IRA, not the investor.
That's why paperwork must flow through an IRA custodian like Pacific Premier Trust.
All expenses and revenue must go through the IRA.
Expenses must be paid by the IRA and any revenue must come into the IRA.
You cannot use the property for personal reasons.
The property must be treated as an investment, not for the immediate benefit of you, your business or family.
Maintenance and repairs must be done by a third party.
If the IRA owner participates in any “sweat equity” activities – even something as minor as changing a light bulb — there could be significant penalties.
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