The Best Kept Wealth Building Secret

Published on Forbes

Most people have some type of retirement account. I have learned that the mass majority have no idea how they work, what they are invested in or what rate of return they are earning. Does this describe you?

The only time you think about your hard-earned money that is sitting in a retirement account is when the media causes mass panic as they shout from the rooftops that the stock market has crashed and the majority of Americans have lost their retirement savings in the blink of an eye. You then rush to figure out if your money is safe or if it indeed has vanished into thin air. This is all very preventable and we are here to show you how. You have more control than you think!

The Secret is that you can actually use your IRA funds to Invest in Real Estate.

I will tell you step by step how to accomplish this and show you some examples of why Multifamily Real Estate is the preferred asset type.

Did You Know That You Can Self-Direct Your IRA?

Maybe it's because most IRAs are administered by banks and investment brokers who offer limited investment products and want you to keep your money with them. It’s crazy that less than 2% of IRA investments are self-directed. Most investors don’t know that the IRS allows a much broader range of investments using a self-directed IRA. (SDIRA)

As a multifamily syndicator, we consider SDIRAs a good source for capital. Our investors are thrilled to know that this is possible and are anxious to understand how it works once we introduce the option to them. Multifamily syndications are an excellent fit for IRA holders, and we are here to make sure that you know all your options.

Why Do People Choose to Self-Direct Their IRA?

Most IRA investors do not plan on touching the money in their investment accounts for years, so they don’t mind putting them in longer term 5 to 10-year investments. We are able to offer them much better returns without the risks associated with a potential stock market correction. Many IRA’s are sitting in 1-2% money markets/CDs. In addition, our SDIRA investors really like that no outside approval is needed. The IRA owner makes all the decisions and then simply puts the wheels in motion for the investments of their choosing.

In general, everyday people, real estate investors and white-collar professionals looking to self-direct will fall into one or more of the following categories.

  • The cash they have in an IRA retirement plan provides them with the needed capital for an investment.

  • They have stock market fatigue and are tired of and uncomfortable investing in conventional stocks, bonds and mutual funds.

  • They like that they get the tax benefits of the rents, dividends and profits coming back to their IRA tax-deferred or in some cases tax-free.

Self-Directed Plans

  • These plans are available to a multitude of assets and accounts including:

  • Traditional IRA

  • Roth IRA

  • Simple IRA

  • Individual(k) Plan

  • Defined Benefit


  • Former 401k, 403 b, 457, TSP

Many individuals are concerned that moving money will be taxable, but this is NOT the case. Moving funds to a self-directed account is fairly simple. This depends on the account you are moving from and the type of account you are moving to. Transfers and direct rollovers can be done an unlimited amount of times and can be done in partial amounts as well which are also non-taxable. In most cases transfers and rollovers are done fairly quickly with funds arriving in the hands of your custodial account manager within 1-2 weeks.

Types of Assets Available

The funds in your SDIRA can be used to invest in multifamily syndications, but they can also be used to invest in assets such as:

  • LLCs

  • Farm animals

  • Partnerships

  • Cryptocurrency

  • Movie projects

  • Oil/gas

  • Precious metals

  • Private stock

  • Equipment leasing

  • Forex accounts

What You Can’t Do with a Self-Directed IRA

There are only a few prohibited investments. You CANNOT purchase life insurance or collectibles. You also CANNOT use your IRA to benefit you or a disqualified person.

What is a disqualified person? The following people are disqualified from benefiting from your self-directed IRA:

  • You and your spouse

  • Your parents and grandparents

  • Your children and grandchildren

  • Your son-in-law or daughter-in-law

  • Or any business our entity controlled by one of the above

However, your siblings, aunts, uncles and cousins are not on the disqualified list! These rules also prohibit an IRA holder from personally guaranteeing a loan associated with your IRA.

Warning: Using Leverage Can Create Tax Issues