The Buying Process

The Purchase Agreement

How to Use Your IRA to Buy Real Estate house iraOnce you find the property you want to acquire as an investment, you want to fill out a purchase agreement, just like any other purchase.

The only difference, is that instead of using your personal name, you’d put your retirement account on there as the purchaser.


Fill-Out Form for Custodian

At that point, you’d fill-out whatever form your custodian has in-place for you to fill-out when you find an asset to purchase that you’d like for them to review.

Different custodians have different names for them.

You won’t have to do this if you have checkbook control.


Submit to Custodian

This step won’t be necessary if you have checkbook control. I just wanted to mention this in the event that you chose not to have checkbook control for whatever reason.

So let’s say you’ve filled-out the document to get authorization from the custodian for the investment.

Now you’re going to send that form, you send the following to the custodian:

  • Instructions for the escrow wire from the title company
  • Contact info for the title company
  • Purchase agreement
  • Authorization form

Note: They might charge you for reviewing this information. Also, the mix of documents that they request that you submit might be slightly different, depending on the custodian you’re working with. They’ll also probably charge you to wire the money to the title company for closing.



Once the title company gives you guys the clear to close, they’ll send the necessary documents to your custodian.

You can potentially save thousands in the long-run by starting your own IRA.  (Image: sunshinecity/Flickr)
You can potentially save thousands in the long-run by starting your own IRA. (Image: sunshinecity/Flickr)

From there, the custodian signs the documents and funds the purchase of your property.


You Can Create Your Own SDIRA

I should’ve mentioned this earlier, but you can actually create your own self directed IRA, thanks to the Employee Retirement Income Security Act (ERISA) of 1974.

It may or may not be for you, but you should be aware of this nonetheless.


Why Didn’t You Know This?

One word, “money”.

The financial planners, banks, and traditional custodians of the financial world make so much money off of selling you their own products and services, that they don’t want you to know about it.

Like anything in life, setting up your own SDIRA has it’s positives and negatives.



Here are a few of the benefits:

  • You can save a lot of money. If you run your own IRA, you don’t have to spend money on balance fees, transaction fees, or any of the other fees you’d have to pay if you let a third party handle your SDIRA.
  • You get checkbook control, and therefore immediate access to your IRA funds, which is great if you’re going to be doing multiple withdrawals and deposits as a part of your investment strategy.
  • You have the flexibility of being the fiduciary of the account yourself, or you can select the trustee of your choice as the fiduciary of that account.



  • Costs more to set this up on the front-end than the other option.
  • Relies heavily on the help of an attorney experienced with ERISA, which means you’ll have to pay attorney fees for their services.


How is it Done?

How to Use Your IRA to Buy Real Estate fsboIf you Google “How to setup my own self directed IRA” you can find plenty of useful information that can help you.

It’s also helpful to find a lawyer that has experience with ERISA rules that can help you meet the IRS’s requirements.

You have to have a custodian to manage the funds, and they have to be approved by the IRS.

From there, you can manage your own IRA and keep from having to pay custodial commissions and fees to other parties.


SDIRA Companies to Start Your Search

In this section, I’ll share some of the SDIRA companies that our investors have used in the past.

Note: I don’t have any connections (financial or otherwise) with any of these companies, by the way.


Guidant Financial

A lot of real estate investors that want checkbook control invest out of IRA’s tend to like Guidant Financial.

Not only do they give you checkbook control, but they will step you through the whole process, and help educate you so you know what you’re doing.

The downside to Guidant is that they’re about $1500 more expensive than other SDIRA’s that give checkbook control, but just like anything in life, they have their positives and negatives that you have to weigh for yourself.


Other Self Directed IRA Companiessold
Here are some other SDIRA companies that you might want to look into:

  • Equity Trust Company
  • The Entrust Group
  • New Direction IRA

There’s a few others that I can’t remember right now off the top of my head. I’m sure a Google search can help you find some others to investigate.

Good luck in your pursuit to buy real estate with your IRA.


Are you looking to buy property to rehab or a rental property out of your IRA?   Leave a comment.  I’d love to talk about your plans.  Either way, best of luck to you.