Finding Alternative Investments for Your Self-Directed IRA

Now that you understand how a self-directed IRA works to build tax sheltered wealth for retirement using investments of your own choosing—you may be a little stumped. Not because you don’t realize the potential these plans offer, but because now you clearly understand that the world of alternative investments is truly vast and wide, and you aren’t quite sure how to go about finding alternative investments for your self-directed IRA.

The best place to begin is considering types of alternative investments for your self-directed IRA that you know and understand, which is the basic premise of self-direction. Investors are encouraged to use their own knowledge and expertise to acquire assets they are familiar with. So, if you know something about real estate options, rehab-and-flips, rentals, commercial properties or the potential of a great piece of unimproved land in a fantastic location…it makes sense that you would consider these assets. Real estate investments are, after all, the most popular asset in a self-directed IRA.

But, what about other options that might present wealth building potential? How do you identify and vet investments that you are unfamiliar with but want to learn about?

Where and how to find assets for your plan

Join area investors clubs and / or attend various networking events they sponsor. You’ll have the opportunity to connect with like-minded individuals who are willing to share their secrets of success (as well as failures!) and can introduce you to different assets they have explored.

Consult investing and financial advisors. Just because you self-direct does not mean you shouldn’t. In fact, you are highly encouraged to do so. These professionals can tell you about various options you haven’t heard of. Additionally, your financial advisor can help you manage your retirement funds and assist you planning investments that are within your reach that add the proper amount of diversity your portfolio needs to maintain in order to succeed.

Consult with professionals in the area or industry you are interested in. For example, if you want to purchase gold or silver consult and vet several different dealers to learn what you need to know. Reputable realtors can provide critical knowledge about real estate options. Crowdfunding opportunities are growing and can be explored across the Internet as well as throughout various investing clubs or simply by word-of-mouth. Foreign exchange and futures trading options can be presented by well-known brokers that know the business inside and out.

Advanta IRA does not sell investments or give investing advice, but we can tell you about the wide variety of assets available to self-directed IRAs. Some are well known, some not so much. The point here is that you can add just about any asset to a self-directed account that you can imagine—except for collectibles and life insurance. We understand it can be overwhelming at first. But once you get the hang of it, you’ll become more comfortable in confidently investing your self-directed funds.

Alternative investments permissible in self-directed IRAs

  • Real estate (single and multi-family homes; rentals; condos; land; tax liens and certificates; commercial property; foreign property)
  • Oil and gas options
  • Private equity and private stock
  • Crowdfunding opportunities
  • Timber
  • Cattle
  • Accounts receivable factoring
  • Equipment leasing
  • Businesses
  • LLCs and trusts
  • Precious metals
  • Foreign currency
  • Alpaca farms
  • Futures trading
  • …and much more

As with any investment, you must perform extensive due diligence to make sure the option is viable. Doing so can protect you from fraud and helps you learn the ins and outs of the choices you make.

You must also be aware of prohibited transactions and dealings with disqualified persons when investing with your self-directed IRA. For example, acquiring precious metals that do not fall within accepted guidelines or purchasing a home with your IRA that you personally own can result in your account losing it’s tax-sheltered benefits.

You can also attend one of our complimentary weekly events to arm yourself with knowledge about alternative investments for your self-directed IRAs. Seminars and nationwide webinars can be found by visiting our event calendar.

For more information about this article, or if you’d like to learn more about self-direction, please contact us.

About Scott Maurer

Scott Maurer, Vice President of Sales for Advanta IRA, is a recognized expert in the field of self-directed IRAs. With a law degree from the University of Florida and as a designated Certified IRA Services Professional (CISP), Scott’s keen understanding of rules and regulations fuels his passion to educate others on the power of investing in alternative assets using self-directed IRAs. Scott is a frequent guest on retirement and investing webinars and podcasts, and he has shown thousands of individuals how to achieve financial freedom by teaching them how to use their retirement funds to invest in private placements, real estate, private lending, and more. Throughout his two decades in the industry, he has watched numerous unique investments unfold, giving him great perspective of what is possible when people take control of their retirement funds and investing decisions.