Commercial properties of all kinds can be held within an IRA if it is structured correctly. This includes everything from small gas stations to larger strip complexes, mini-malls to mega-malls, and industrial parks to high-rise office towers. Any property that will be used (almost) exclusively for business can be considered a commercial property and its purchase can be treated as any other real estate transaction--as far as your self-directed IRA is concerned.
The main reason to open a self-directed IRA for real estate transactions is for the freedom of action. You can move on a property when necessary and pay all required fees and costs directly from the IRA. With a Limited Liability Company, you maintain checkbook control of your account. That is the most crucial aspect of a self-directed IRA because it speaks directly to the number of fees you will have to pay over the life of the account.
For an IRA investment involving commercial properties, you will be required to pay certain business expenses from your IRA. If your IRA custodian requires you to pay a fee for every transaction involving assets within your IRA, you can see how quickly a real estate investment could eat up your profits. However, when you maintain the checkbook, you can minimize the accumulation of extra fees.
Other Types of Commercial Property Investments
Other than the few mentioned above, there are almost limitless possibilities for investing in commercial properties. You can invest in franchises, golf courses, car washes, hotels, timberland, storage facilities, resort properties, and more. With a self-directed IRA LLC, these properties can be foreign or domestic (with the caveat that any foreign property should be in a place with at least semi-reliable government stability).
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