Self-Directed IRAs Explained

Self-Directed IRAs allow you to take full control over your retirement by allowing you to invest in almost anything.

In an earlier blog post we discussed why your 401(k) shouldn't be your only plan for retirement and introduced Self-Directed IRAs.

What is a Self-Directed IRA?

A Self-Directed IRA (SDIRA) is an individual retirement account that gives investors more control by allowing investments in alternative assets.

What can a Self-Directed IRA invest In?

SDIRAs can invest in:

  • Real estate
  • Private mortgages
  • Precious metals
  • Privately held companies
  • Promissory notes
  • Limited partnerships
  • Energy (Oil & Gas)
  • Intagible Assets
  • A lot more

The real question should have been what can't a SDIRA invest in?

  • Collectibles (art, coins, stamps, cars, etc.)
  • S Corp Stock
  • Life Insurance
  • Transactions actions involving a Disqualified Person(s)

Pros Vs Cons of SDIRAs


  • Control - You have full control about what asset classes you invest in.
  • Protection - Because IRAs are trust accounts they are protected from creditors and generally protected from bankruptcy and lawsuits.
  • Returns - If you make the right investments, your returns can be substantially higher than many traditional investments.


  • Restrictions - No self-dealing means you can't invest in businesses that you or a relative actively participate in.
  • Approval - Even though you have control over what you invest in, custodians still have approval processes that can contain a lot of potentially complicated paperwork.

Who should use a Self-Directed IRAs?

Sopihsicated investors who have all their retirement accounts invested in stocks, bonds, and mutual funds and want to diversify their portfolio using alternative investments.

Investors who have an inactive 401(k) from a previous employer can roll it over into a Self-Directed IRA and invest in alternative assets.

Babylon Property Group can assist those looking to diversify their portfolio by investing in real estate through Self-Directed IRAs and other sources of capital. For more information please contact us by phone at (631) 253-1609 or email at