Self-Directed IRAs – a Secret Tool of Real Estate Investing

“Experts” will tell you – just stick your money in retirement and don’t look at it. I used to take their advice. Until one day, at a company “advisor” meeting, my account was down fifty percent. The same “experts” kept saying, “it was just a bad year”, “there’s nothing you could have done”, “it was just the market”. This story has been told millions of times.

Little did most people know a secret tool building your retirement portfolio was available to EVERYONE. And it still is!

If you’ve retired or have a retirement account from a previous employer, you can transfer funds from your traditional 401K or IRA into what’s known as a Self-Directed IRA (SDIRA), granting you control over your funds via checkbook.

Unfamiliar with the concept of an SDIRA?

That’s because Wall Street and numerous financial professionals do not promote it since they do not benefit from it. Their preference lies in keeping your money tied up in the stock market to accrue fees and commissions. However, with funds in an SDIRA, you have the freedom to divest from the stock market and explore other eligible investments, such as real estate!

What Exactly Is a Self-Directed IRA? 

Self-directed IRAs (SDIRA) empower owners with full autonomy over their retirement funds and investment choices. Such plans offer the flexibility to explore alternative investments, such as real estate, fostering diversification and facilitating the growth of retirement wealth.

The power of SDIRAs compared to traditional IRAs or 401Ks:

  • SDIRA investments are not limited to stocks, bonds, and mutual funds. 
  • SDIRA can invest in many alternative assets not available in traditional brokerage IRA accounts. 
  • Account owners—not advisors, brokers, or plan custodians—choose their own investments they personally know and understand.
  • You have checkbook control over your retirement funds. Whenever you need to fund qualified investments, you write a check or initiate a wire transfer.

Why Opt for Self-Directing Your IRA or 401K?

Access to additional investment capital:

Never miss out on promising investment opportunities due to personal fund constraints. Utilize your retirement plan funds to venture into real estate investments, securing tax-advantaged income for your retirement years.

Empowerment in managing your retirement funds and choices:

Investing in areas you personally comprehend enhances your chances of success. Self-direction grants you authority over decision-making, eliminating reliance on others for investment choices.

Critical diversification through alternative investments:

Stepping away from Wall Street is possible through self-direction. You can opt for investments like multifamily apartments to bolster income and sidestep the market volatility associated with traditional stocks.

Tax benefits for growth:

Revenue generated from assets within your plan, including capital gains, enters your SDIRA with tax-sheltered or reduced tax implications. This accelerates wealth accumulation and provides ample funds for further reinvestment.

How to Establish Your SDIRA:

  1. Open an Account: Begin by establishing an account with a reputable provider and funding it to initiate the process. If you’re transferring funds from another custodian, expect the process to take approximately four weeks, so plan accordingly.
  2. Seek Knowledgeable Providers: It’s crucial to collaborate with experienced and knowledgeable administrators when venturing into self-directed investments. We can direct you to trusted self-directed providers who can guide you through the setup process.
  3. Navigate Complexity with Expert Guidance: Many self-directed investments entail intricacies, underscoring the importance of having a seasoned administrator who comprehends all the pertinent rules. Rely on their expertise to navigate potential complexities effectively.
  4. Dive into Exclusive Investment Opportunities: Once your SDIRA is established and funds are transferred, you gain access to a realm of exclusive investment prospects, enabling you to cultivate and expand your retirement portfolio.

To see how we put Self Directed IRA’s to use, check out our latest multifamily masterclass.

Disclaimer: The information provided in this post is for educational purposes only and should not be considered as financial, tax or investment advice. Always consult with a qualified professional before making any financial decisions.


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