You would first determine what type of alternate investments you plan to purchase in the self directed IRA and choose an appropriate custodian. You might then call the custodian to discuss to review their requirements before opening an IRA with them. Once you have opened the account, you would sell the investments you now hold in your current IRA (or enough to fund the new IRA), and do a direct transfer of the cash proceeds to the new IRA, after which you can purchase the investments you wish to hold. These custodians work with alternate investments 24/7 and can usually provide advice to avoid the dreaded prohibited transactions that could cause your IRA to be distributed, which produces taxes and penalties. The IRS now requires the SD custodian to report the types of investments you hold (eg rental real estate, precious metals, privately owned stock, etc) to the IRS on Form 5498. One of the hazards is self dealing, such as allowing a family member to live in your property or you personally working to improve the property, and there are plenty of others. The custodian may be able to provide materials help avoid these disasters. You also need to keep liquidity in mind, particularly if you will be nearing RMD age or are already there, or simply if you will need to withdraw from the IRA account. Rarely would you have your entire IRA balance in one of these accounts.

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