Catherine Wynne urges investors to stick with the familiar.
"Our most successful clients are the ones that are investing in something they understand," says Wynne, president of Entrust New Directions, a franchisee of the Entrust Group in Boulder, Colo., a self-directed IRA custodian.
For example, she says one of her clients, a medical doctor, has pooled his IRA with other doctors to create a walk-in CAT scan clinic. Proceeds of the profits from the clinic are funneled back into the doctors' IRAs.
Self-directed IRAs can even being used to help the community.
Ephren Taylor is CEO of Raleigh, N.C.-based Capital City Corp., which has a Web site called "IRA CashFlow." The company specializes in helping link self-directed IRA investors to retail and service operations in low-income communities.
Taylor's organization uses Equity Trust as a custodial firm and runs the business for the client.
"Our clients are getting returns even in a down market," says Taylor, who brings self-directed IRA investors to established businesses such as gas stations and pizzerias in low-income urban areas.
"Pizza isn't as sexy as dot-com, but (at the) end of the day, you have positive cash flow and early retirement," he says.