How to Buy Commercial Real Estate with Your IRA: A Complete Guide by ProTech Commercial Realty

Investing in Commercial Real Estate With an IRA

A self-directed IRA (SDIRA) can hold alternative assets, including certain commercial real estate investments. The account—not the individual—owns the property, and special tax and prohibited-transaction rules apply.

1. Establish a Self-Directed IRA

Choose a custodian that supports real estate transactions, understands alternative assets and has transparent fees and transaction processes.

2. Fund the Account

Funding may come from eligible rollovers, transfers or new contributions subject to applicable tax rules and limits.

3. Identify and Analyze Property

Evaluate demand, lease structure, cap rate, cash flow, risk and appreciation potential. Industrial, office, retail, multi-tenant and owner-user assets may all require different underwriting.

4. Purchase in the IRA's Name

Contracts, title and transaction documents must reflect the IRA/custodian ownership structure. Personal use and self-dealing are prohibited.

5. Operate the Property Correctly

Income generally returns to the IRA and eligible expenses must be paid from IRA funds. Investors should work with a qualified custodian, CPA and attorney familiar with SDIRA rules.

6. Plan the Exit

When the property is sold, sale proceeds return to the IRA. Tax treatment depends on account type, financing structure and applicable law.

This article is educational and is not tax or legal advice. Consult qualified tax, legal and retirement-account professionals before pursuing an SDIRA real estate transaction.