o2chim2 -- I'll provide some information about custodians for a Self-directed IRA...these two are usually mentioned as experienced, ethical operators who could help you set up an IRA to contain real estate assets:
PENSCO Trust Company
Client Services (800) 969-4472
Web Site www.penscotrust.com
FISERV ISS (Formerly Lincoln Trust Company)
New Business (800) 521-6974
Current Account Holders (900) 962-4238
Web Site www.fiserviss.com
I'm not as negative on the idea as the other people who have replied. I have a Roth IRA with about a $140k balance, $80k of which is in HSTRX as a hedge against passive indexing being the be-all-and-end-all. The fund has held up well in the recent market carnage, but has a paltry 0.92% yield and a YTD gain of 2.31% (yawn).
So my thinking is, what would be so bad about taking $40k out of HSTRX, putting it into a self-directed IRA, and buying a condo in a resort area that I like for cash? All the rental income would go into the Roth, and hopefully cover condo fees, cleaning fees, taxes, etc. with something left over to increase the Roth portfolio value.
In 5 years, when I'm 59 1/2, I take the condo out of the IRA (TAX FREE) and use it for my own recreation, rent it out, or sell it for what I hope will be a higher price in a recovered real estate market.