The New Real Estate IRA LLC

You can invest your money using a variety of cost effective methods. But if you already invest or are considering investing heavily in real estate, it's in your best interest to get a Real Estate IRA LLC.

What Is a Real Estate IRA LLC?

A Real Estate IRA LLC, AKA a Self-Directed IRA LLC, is an IRS and tax court approved structure that allows you to use your IRA funds to purchase real estate, or make almost any other type of investment, tax free.

With a Real Estate IRA LLC you will never have to seek the consent of a custodian to make a real estate investment or be subject to costly custodian account fees.

To establish a Real Estate IRA LLC, first you need to have an IRA. Then you establish an LLC which is owned by the IRA, which is in turn owned by you. The passive custodian then transfers your funds to the new IRA LLC bank account.

How Do I Buy Real Estate With My Real Estate IRA LLC?

When you find a real estate investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment.

The Self Directed IRA LLC allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right real estate investment opportunity presents itself.

This setup also gives you a great advantage when it comes to making real estate or tax liens investments, since custodian delays could cause you to lose an investment opportunity.

Real Estate Is an IRS-Approved Investment

 Investments with a Real Estate IRA are allowed under the Employee Retirement Income Security Act of 1974 (ERISA). IRS rules permit you to engage in almost any type of real estate investment, except from any investment involving a disqualified person.

Note: Disqualified persons are usually limited to your close family members, such as your parents and children.

What Types of Real Estate Investments Can I Make With a Real Estate IRA LLC?

With a Self-Directed IRA LLC you will have the ability to invest in almost any type of real estate investment, such as:

  1. Foreclosure property
  2. Condos or coops
  3. Mortgages
  4. Mortgage pools
  5. Deeds
  6. Farm land
  7. Tax liens
  8. Residential or commercial real estate
  9. Domestic real estate
  10. Foreign real estate
  11. Raw land
  12. Vacation homes
  13. Rental units

A Real Estate IRA LLC Offers You Growth Potential

A Self-Directed Real Estate IRA LLC offers you the opportunity to greatly accelerate the growth of your retirement portfolio. With a Real Estate IRA LLC you can take advantage of the high growth real estate investment sector while benefitting from the tax free IRA benefits.
Investing in real estate is a formidable alternative to the stock market. Why? Because real estate properties can provide steady income as well as long term gains through appreciation.  There are no limitations on the types of properties that can be held by a Real Estate IRA LLC.

Establish Your Real Estate IRA LLC While The Market is Investor-Friendly

You're no doubt well aware of how the residential and commercial real estate market has taken a dramatic downturn due to the subprime mortgage meltdown.

While it’s a bad real estate market for current owners and landlords, on the flip side it's a great investment market for real estate investors with capital. Also, the Real Estate IRA LLC is perfect for any person looking to diversify their retirement funds by investing in the high growth real estate market.

You Have Leverage With Your Real Estate IRA LLC

The Real Estate IRA LLC can be used when making a real estate investment using cash, or may be used when using a non-recourse loan to fund an investment. A non-recourse loan is the only type of loan allowed for a Self-Directed IRA.

A nonrecourse loan is a secured loan which is secured by a pledge of collateral, but for which the borrower is not personally liable. Whereas, a recourse loan is a loan for which the borrower is personally liable. Recourse loans are no permitted when using IRA funds.

Note: If non-recourse funds are used as leverage, the debt-financed portion of your investment will likely trigger the UDFI tax.

Opening a Real Estate IRA LLC Is Quick and Easy.

Royal Legal Solutions will take care of setting up your entire Real Estate IRA LLC structure. The whole process can be handled by phone, email, or mail, typically taking 2 weeks or less. The amount of time it takes to setup largely depends on the state you choose to form the IRA in and your current custodian.

Setting Up Your Real Estate IRA LLC: A Step By Step Guide


Step 1: Establish Your Account

Your Self-Directed IRA account is established with an IRS approved and FDIC backed passive custodian.

Step 2: Transfer Your Funds

Your retirement funds are transferred to the new Self-Directed IRA account tax free.

Step 3: Form Your LLC

A Limited Liability Company (LLC) is formed with you as the owner.

Step 4: Fund Your LLC

You decide what to invest in, and the passive custodian invests the IRA funds into the newly formed IRA LLC.
Note: One or more IRAs can be used to fund the IRA LLC, including Traditional, Roth, and SEP IRAs.

Step 5: Take Control

You direct the IRA funds held in the new LLC bank account for investment as you see fit.

Step 6: Invest

 Your LLC makes a real estate investment using IRA funds and all income and gains generally flow back to the LLC tax-free!

Learn More About Royal Legal Solutions' Real Estate IRA LLC 

If you still have questions about the Real Estate IRA LLC, contact us today. We're happy to help.

Last Updated: 
November 1, 2017

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

Learn How To Achieve Total Asset Protection While Growing Your Professional Network

Ready to know more than your attorney? Join our community platform where you'll get immediate FREE access to all our best educational resources for real estate investors. Including 8 Masterclasses, group mentoring replays, and much, much more.



Join thousands of real estate investors in all 50 states as they enjoy exclusive content, special promotions, and behind-the-scenes access to me and my guests. No spam, ever. Just great stuff!




Do you have asset protection questions? We can help!


© 2023 - Royal Legal Solutions