Question 1

Can you invest in real estate with a Self-Directed IRA?

Accepted Answer

Yes, a Self-Directed IRA (SDIRA) allows you to invest in real estate including rental properties, commercial buildings, raw land, and real estate crowdfunding. The IRA holds title to the property, all income flows back into the IRA tax-deferred (traditional) or tax-free (Roth), and you must use a qualified custodian like Equity Trust, Alto IRA, or Strata Trust.

Question 2

What are prohibited transactions in a Self-Directed IRA?

Accepted Answer

Prohibited transactions include buying property from or selling to disqualified persons (you, your spouse, parents, children, or entities you control), using SDIRA property for personal benefit, paying yourself for managing the property, and using personal funds for SDIRA property expenses. Violations can result in the entire IRA being distributed and taxed.

Question 3

How much does a Self-Directed IRA custodian cost?

Accepted Answer

SDIRA custodian fees typically range from $250-$400 per year for account maintenance, plus $50-150 per transaction. Some custodians charge asset-based fees (0.15-0.50% of account value). Popular custodians like Equity Trust charge $225/year flat, while Alto IRA offers plans starting at $10/month for alternative investments.

Question 4

What are the best self-directed IRA custodians for real estate in 2026?

Accepted Answer

The top SDIRA custodians for real estate investing in 2026 are Equity Trust ($225/year, 45+ years in business, handles direct property title), Entrust Group ($330/year, strong checkbook control IRA support), and Strata Trust ($275/year, fast transaction processing for time-sensitive property deals). For investors wanting full checkbook control through an LLC structure, IRA Financial offers comprehensive SDIRA LLC setup for a $999 one-time fee plus $360/year. When choosing a custodian, prioritize real estate transaction experience, fee transparency, and turnaround speed — some custodians take 30-45 days to fund property purchases while top performers close in 5-7 business days.

Question 5

Can you roll over a 401(k) into a self-directed IRA for real estate?

Accepted Answer

Yes, you can roll over a 401(k) into a Self-Directed IRA to invest in real estate, but only after a qualifying event — job change, retirement, or reaching age 59½ with an in-service rollover. The process takes 2-4 weeks: open an SDIRA with a custodian (Equity Trust, Strata Trust, etc.), request a direct trustee-to-trustee transfer (avoids the 20% mandatory withholding of indirect rollovers), and once funds land, you can purchase rental properties, raw land, commercial real estate, or real estate notes. Roth 401(k) rollovers to Roth SDIRA are tax-free; traditional 401(k) to traditional SDIRA are tax-deferred. The IRS does NOT impose a limit on rollover amounts.

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