This is something I never knew existed. I have a couple of losing stocks in my traditional IRA and am considering this option. I'd like to be able use the money to buy another rental property, but am a little confused about how that would work. From what I've read, all money pertaining to the property would have to be run thru this account? Money for repairs, taxes, insurance, etc. would need to be kept in the fund. Would I have to deposit monthly rent in there? Seems like a hassle. Also, there seem to be lots of fees: opening, per transaction, etc.

That is correct.

I opened a Fidelity IRA and buy stocks and funds in it. Wasn't difficult at all.

Looking for something I could buy real estate with.

Sorry.. I missed that.

These guys are a way to do that.

Equity Trust Company

Please keep in mind that setting them up can be a real pain....the maintenance on them can be tricky as well....and the liquidation on the back end can be frustrating.

Sometimes just paying the taxes is worth it.

It's not so much the taxes I'm trying to beat, but just thought I have that money already, it's not doing anything much where it is & it would be great to be able to get another rental property without borrowing or using up cash. It does look complicated though, so I might keep looking into it and see what I can figure out.

I guess you're right, though. I'd need to figure out the penalty/tax for pulling it out of my IRA. I haven't done or considered that before. Any idea what it would run to cash out a portion?

If it's not doing anything much where it is, speak with the advisor about other investment options that more closely align with your expectations/goals.

Check out Millinium Trust if you decide to do it

Seems like one of the many things Lifestyles Unlimited claims is simple to do when, in reality, it's not.

another thing to consider...

any "new" money added to the IRA is an IRA contribution (read: you are limited in the amount of money you can put into a self directed IRA every year), and any money withdrawn from the IRA is considered a distribution (taxable and subject to early withdrawal penalties)

Do you really want to do that with a property you potentially would need to put cash into? Do you have the discipline to leave the cash in the account?

I am thinking that the self directed IRA is not the way to go. Too many layers of hassle.

This one mutual fund is the only one not performing well. I would still have a pretty sizeable chunk in that IRA. I won't have a penalty because I'm about to turn 60 - just would have to pay tax on it as income. It would give me enough to buy another house & still have money to do a little rehab if necessary. On that house, I would expect to make about 11-12%.

I could do nothing and pull cash from elsewhere to do this, but it just seems like that money would be better off invested this way.

Quest IRA

My wife and I use Equity Trust for our self-directed IRA's. We've bought minerals, invested in private equity, bought real estate, etc. It's not complicated to get going, but will require more action from you compared to a basic IRA investing in just equities.

We keep IRA's at Equity Trust for direct investing, and IRA's at Schwab for buying stocks, trading options, etc. The fees for buying stock at Equity Trust are very high as opposed to a customary broker.