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Anyone use self-directed IRA or Solo 401k

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  • Anyone use self-directed IRA or Solo 401k

    So I currently have the typical IRA and solo 401k at Fidelity, invested in a pretty typical mix of index funds and bonds (70/30). But I have been thinking about real estate investing  - there is an interesting local opportunity - and curious if anyone out there uses an alternative IRA provider so they can use tax-advantaged money to invest in real estate, make personal loans, etc... Seems like an interesting idea, especially since it uses tax-advantaged money, rather than saving post-tax dollars to use to purchase real estate, etc... Thanks for any info/advice.

  • #2
    I have a solo 401(k) with eTrade and a guest post coming up on using a self-directed IRA for real estate investments on 6/29. The idea intrigued me, as well. PM me and I can e-mail you an advanced copy.


    • #3
      Both IRAs and Solo 401(k)s can be used for real estate investment. Likewise, HSAs and Coverdell IRAs (a.k.a. Coverdell Education Savings Accounts) can be used for real estate investment. This is an intriguing proposition. However, prior to pursuing these strategies it's important to understand that they do have some compliance aspects about which you should be aware, namely: Prohibited Transactions and UBIT. This is not meant to discourage you in any way, but rather to ensure that (a) your objectives are aligned with the tax rules and (b) that you pursue the strategy in manner that is compliant with applicable tax rules.

      A very helpful tidbit is that, generally, a Solo 401k is the better vehicle for real estate investing when compared to an IRA.

      An overview of 401k/IRA real estate compliance can be found at:


      • #4
        MillionaireDoc recently had a great post on this very topic:

        It sparked my interest as well. I plan on using a self directed solo 401k for crowdfunded real estate investments.


        • #5
          Old thread revived. Here is that post I mentioned above from Chad Chubb of Wealthkeel: