This is an open ended question that is too complex to address in a forum such as this. Your IRA custodian obviously supports alternative investments in self directed IRAs, so could provide you with information how to avoid prohibited transactions. Basically, you need to know who disqualified parties are with respect to the property. They include yourself, so you should not provide any maintenance services to the property such as personally working on it for cleanup or maintenance. You cannot rent it to certain relatives who would be considered disqualified persons. Since all costs of maintenance, property taxes, insurance etc must be paid from your IRA, you need to keep enough cash in your IRA to cover these expenses, as you cannot pay for repairs, insurance etc from your personal funds. This is just the most basic info, so you need to study up on the entire situation. If any doubts about something you should also check with your IRA custodian before acting. Finally, while you need enough cash in the IRA account to cover expenses, you also do not want the account to hold much larger amounts because any prohibited transaction will cause your entire IRA to be distributed, taxed and penalized, so you would transfer excess amounts out of this IRA to another IRA where they would not be affected by a prohibited transaction.

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