Real Estate Investing with a Self-Directed IRA Custodian

Once an investor considers holding real estate in his or her IRA, it is important to take the first step and discover whether or not the current IRA custodian will even allow real estate to be held as an investment. Often, investors must move to a self-directed IRA custodian because their current provider either will not work with real estate or has little experience with holding real estate in an IRA. The name self-directed IRA can be a little confusing because many traditional brokerage custodians offer a “self directed IRA” for investing. The trick to comparing providers is finding out if their plans are only eligible for investments into securities like stocks, bonds, and mutual funds. The key is to find an IRA custodian that will handle real estate and other alternative investments. New Direction IRA provides real estate investors with plan options that make real estate IRA investing easier than most.

It is incredibly important for any self-directed IRA real estate investor to understand that choosing an experienced IRA custodian, large or small, can have a major impact on investment outcomes. Some qualities to look for in a capable self-directed IRA custodian:

  • Size does not always matter. When it comes to self-directed IRA custodians, working with a large investment company does not mean that company has any experience managing self-directed IRA real estate assets. Look for a company that specializes in what you’re looking to accomplish.
  • They have a firm understanding of IRS rules and are willing to educate you. As an example, a capable self-directed IRA custodian should be willing and able to explain IRS guidelines and help you learn about the processes, timelines, and tax implications of making real estate investments in a variety of structures. 
  • Client Service is more than just a sales hook. Real estate investing with a self-directed IRA custodian is generally a do-it-yourself approach, requiring that you make decisions and execute actions. Finding a self directed ira custodian that offers great client service can make a world of difference because your investment instructions to the custodian may be processed slowly or not at all if client service isn’t up to par. Find out if you receive a dedicated representative when opening your self-directed ira for real estate investing. 
  • Technology is important but not common. The self-directed IRA industry has historically been behind the times from a technology perspective and many still use paper forms to complete administrative actions such as paying real estate related expenses. Finding an IRA custodian that offers competent technology is an important consideration. Do they offer online form processing, free online bill pay, or real time communications for pending transactions? The paperwork process involved in real estate investing is intensive and it’s important that technology be leveraged to make sure all parties are constantly on the same page. 
  • Will they save you from yourself? Self-directed IRA real estate investing comes with an entire playbook of rules. Sometimes investors make decisions that unwittingly go against these rules and are hit with penalties if audited by the IRS. Choosing a self-directed IRA custodian that will recognize prohibited transactions before they happen is incredibly beneficial.

At New Direction Trust Company, we encourage anyone considering a real estate investment within a self-directed IRA to reach out and discuss any questions with our knowledgeable staff. We’re happy to take the time if you call us at 877-742-1270 or send us an e-mail at