Self Directed IRA where do I invest?

Question

If you had 100k in your SDIRA where would you deploy it if you wanted to remain passive but wanted to understand the business.

Not accredited just yet, so I can’t invest in syndications 😞

Chris Seveney · Answer

@Jen Salcedo

There are lots of syndications and funds for non accredited investors.

Account Closed · Answer

Yours is a common situation. Not enough to do a flip, needs to be passive and to learn the business and needs to earn a decent return. With our SDIRA investors, we have them invest in our projects and we teach them about real estate investing. Everything from how to look for deals, proper papework, to using title and escrow companies to making sure the deal is profitable, what goes into the managing the project and our sources and methods. If you can find someone like that you will be far ahead of the game. Personally, what I would NOT do is pay someone to "coach", "mentor", or "train" you. It really isn't necessary if you find someone who simply makes that part of your investing. People tend to learn real estate investing best by doing, not by being told how it's done.

Larry Fried · Answer

As others have stated there are plenty of syndications that are available to non-accredited investors.  That is how I started out in my syndication investments, initially with SD 401K investments nearly 7 years ago.  I have documented my investment journey with one company that I have continued to invest with over the years in my 4 part BP blog series:Have I Found the Holy Grail of Passive Real Estate Investing?I continue to update quarterly in (Part 4).

(Part 4)

Alex Ramirez · Answer

Account Closed you sure can invest in a syndication as a sophisticated investor. The SEC does not require you to be accredited under a 506(b) filing. The SEC says the following:

Under Rule 506(b), a “safe harbor” under Section 4(a)(2) of the Securities Act, a company can be assured it is within the Section 4(a)(2) exemption by satisfying certain requirements, including the following:

• The company cannot use general solicitation or advertising to market the securities.
• The company may sell its securities to an unlimited number of "accredited investors" and up to 35 other purchasers. All non-accredited investors, either alone or with a purchaser representative, must be sophisticated—that is, they must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment.
• there is another rule under a 506(b) filing. 
• 
• here is a couple of links for more info:
• https://www.investor.gov/intro...
• https://www.sec.gov/education/...
• 
• Reach out if you have any other syndication questions. Happy to help you

Roschelle McCoy · Answer

Account Closed - can you be more specific about which aspect of real estate you're interested in understanding?  There are so many different asset classes (industrial, multifamily, mobile home parks, self storage, residential (to name a few)).  Narrowing down your focus to one or two asset classes is a good place to start.  If you have an interest in learning more about syndications specifically I can help.

Michael Margarella · Answer

We've worked joint ventures in the self-storage industry with folks who are interested in earning a return on capital while learning. I agree with Account Closed that this is a better way to learn than hiring a coach, so I think you're on the right track!

Jim Pfeifer · Answer

What business are you trying to understand?  Would you like to become an active investor and you are hoping to use your SDIRA to find investments to help you learn that? Are you trying to learn how to be a passive investor and you hope to use your SDIRA as a training tool?  Or do you want to invest your SDIRA most efficiently for income or cash flow? I think the first step is really trying to understand your goals.  It will be different for each person.

I am a full time passive investor so I generally do private lending, debt funds and pre-IPO/speculation with the SDIRA.  When I was first starting out, I invested in some equity investments in my SDIRA but I learned that you lose some of the tax benefits so now I prefer to have my equity investments outside of my SDIRA.

As @Chris Seveney mentioned you do not have to be accredited to invest in syndications - you have more options if you are accredited, but you can definitely find quality operators who allow non-accredited investors.

Todd Dexheimer · Answer

Plenty of syndications take non-accredited investors. You just need to build relationships with them.

Rick Martin · Answer

Yep Jen if you want to remain passive, investing in syndications is the way to go. Just make sure to look for 506b offerings (accepts non-accredited), and start to interact with the syndicator. They cannot offer something to you without a pre-existing relationship.

Dmitriy Fomichenko · Answer

Private lending (note investing)is great way to invest IRA funds: low risk, nice returns and  passive. Investing in a note fund is even better.

Self Directed IRA where do I invest?

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