Self-Directed IRA Investments
Most investors believe their only IRA investment options are stocks, bonds, CDs, and mutual or exchange-traded funds (ETFs).
Many do not realize they have the option to self-direct their IRA or Roth IRA into real estate investments and syndications. This is called a self-directed IRA (SDIRA) and as its name implies, allows you the choice to control your retirement future by investing in real estate, limited partnerships, private placements and other sorts of alternative investments. Hard real estate offers both income and appreciation.
The SDIRA allows you to direct the entity holding your SDIRA to invest in real estate assets
while still taking advantage of the IRA tax shelter.
Historically, real estate syndications have given investors one of the best hedges against inflation, and as an alternative to the volatility of the stock market. Funds held outside of retirement / sheltered accounts also receive tax deductible depreciation to offset profits.
How It Works
1. Open an account with a Self-Directed IRA Custodian – such as iPlanGroup – where we have some of our investments. We get no fees, we just like them! Be sure to read up on the reviews to ensure that you are getting the best possible customer service, price, and overall investing experience.
2. Fund your self-directed IRA or SD Roth IRA via a rollover or by making an initial contribution.
3. Instruct the self-directed IRA custodian to invest your funds in the asset of your choice, which in this case is the real estate syndication you are investing in – and, not your own!
Key Takeaways from Investopia – see link below.
- A self-directed IRA is an alternative retirement account overseen by a financial institution, in which the account owner can choose to put money into alternative investments and to self-direct those investments.
- Investments in a self-directed IRA can include a variety of options, such as real estate, precious metals, mortgages, or private equity—provided the investments don’t run afoul of tax regulations.
- This type of IRA differs from a standard IRA, in which the custodian determines which types of investments a participant can own, and typically opts for highly liquid, easily-valued products such as stocks, bonds, mutual funds, and ETFs.
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Important Note: You can not invest in your own real estate or any syndication you are sponsoring or referred to as “self-dealing.”
See more about SDIRAs on Investopia SDIRA