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Investing in Miami Real Estate with a Self-Directed IRA

Miami real estate
3 Minute Read

Miami real estate investing is a hot market right now. has over 25,000 properties listed in Miami alone, with a median listing price of $399,900. You can find a 12 bedroom mansion for over $25M or a parcel of land for a fraction of that. Of particular interest to investors is the Design District. A recent study reveals that the housing market in Miami is ripe for both buyers and renters.

“Brickell, Downtown and Midtown were the top three locations chosen by respondents as the hottest areas in Miami-Dade right now for renters. For buyers, the top three hottest areas — Coral Gables, Miami Beach and Coconut Grove — were all outside the increasingly dense downtown core”.

Live in the Miami area and interested in investing in real estate with your retirement funds? It’s easier than you think! All you need to do is open a Self-Directed IRA with “checkbook control.” This gives you the ability to use your retirement funds for alternative investments, including real estate. By having checkbook control of your IRA, you can act on an investment as soon as you find it. No need to ever wait to get consent from a custodian when you want to make an investment. Read on to see just how easy it is.

Five Things You Need to Know First

1. While many financial institutions offer Self-Directed IRAs, many of them limit your investment choices. Hence, you might not have the ability to invest in real estate with you IRA. This is known as a Custodian-Controlled IRA. You want some place, like IRA Financial Group, that offers “checkbook control.” This gives you the ability to invest in anything not prohibited by the IRS (life insurance and many collectibles).

2. Once you find a suitable custodian, you need to decide what type of IRA you want: a traditional plan or a Roth IRA. A traditional plan is funded with pre-tax dollars, meaning you don’t pay taxes on any amount you contribute to the plan. Taxes are taken when you make withdrawals from the account. A Roth IRA is funded with after-tax dollars. Taxes are taken out before you contribute to the plan, however, all qualified withdrawals are tax-free.

3. After you have set up a Self-Directed IRA, you need to fund it before you can invest. If you have funds in another retirement account, you can either transfer them or roll them over into your new IRA. Typically, a transfer comes from a previous IRA. Your current custodian will transfer the funds to your new custodian. Rollovers tend to come from different retirement plans, such as a 401(k). A direct rollover is virtually the same as a transfer, while with an indirect rollover, the funds are distributed to you. You then have 60 days, per the IRS, to deposit the funds in the new account. The last way to fund an IRA is by direct contribution. You may contribute up to $6,000 in 2019 ($7,000 if you’re at least age 50) annually. The IRS sets this amount and it may increase in future years.

4. Next, it’s time to find your Miami real estate investment. Since you’re betting your future on the investment(s), make sure to do your homework before selecting the property you would like to invest in. Further, make sure you have enough funds to cover everything associated with the property. It’s never a good idea to mix IRA and personal funds in a transaction.

5. Lastly, it’s time to watch your investment grow. All gains from the property go back into your Self-Directed IRA and continue to grow tax-deferred (or tax-free in the case of a Roth IRA). If you have a rental property, all money paid to you will go into the IRA. Also, if you need to make improvements to the property, that money should come from the IRA. If you decide to flip a house, again, the funds to fix up the house should come from the IRA and the funds received when selling the property should go back to the IRA. Now, you can make another real estate investment!


Investing in Miami real estate has never been easier. Why not use your retirement funds for real estate investing? You could entrust your retirement in a shaky stock market or make investments on your own. With a Self-Directed IRA, you are not limited in the types of investments you can make.

If you are looking to use your IRA funds to invest in real estate, whether in Miami or somewhere else, please contact us @ 800.472.0646.

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