self-directed IRA to buy commercial real estate

Submitted by Diane Ouellette on Tue, 2019-08-06 20:55

I have clients who would like to invest part of their IRA funds in buying a commercial building that will probably cost $1.2-$1.4M. They would like the building to have 3 suites, use 1 of the suites for their bike shop business and then rent out the other 2. This seems like it might violate the IRS self-dealing provision. Any insights and providing the names of experts in this area are greatly appreciated. The clients live in AZ and also have their place of business there. Thanks.



Submitted by Bruce Steiner on Tue, 2019-08-06 21:20

  • It would probably be difficult, but it might be possible for the seller to convert the building to condominium units and then for his IRA to purchase only the units to be rented out to others.
  • Even if this might work, they should consider whether it’s worth the complexity for the amount involved.
  • Bruce Steiner

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