A Beginner’s Guide to Investing in Real Estate Syndications with IRAs

Is your hesitation to use a self-directed IRA due to not knowing what to invest in or where to start? Real estate investments offer ample options, but if you’re new to self-direction, investing in alternative assets can be intimidating. Maybe you simply don’t know where to find assets or you don’t have time to research opportunities or to act quickly to invest. This is why investing in real estate syndications are attractive to many people who self-direct.

Investing in real estate syndications with IRAs adds critical diversity to your retirement portfolio through a more passive investing process. It gives you a taste ofTall coral, yellow, and brown condominiums with white trim and landscaped with tall green trees. how easy it can be to invest in real estate without involving much of your own time. The process is fairly easy for those who have never used a self-directed IRA.

So, if investing in real estate interests you but you aren’t quite sure where to start, syndications offer a solution.

The Process of Investing in Real Estate Syndications with IRAs

Real estate syndications involve multiple investors, which can include IRAs and solo 401(k)s, who pool funds to acquire lucrative assets—often commercial and multifamily properties. And one great aspect of syndications is that you can invest with limited funds. You don’t have to invest tens of thousands of dollars to participate in a syndication. Each investor holds an interest percentage in the overall investment commensurate with the dollar amount they invested.

While you should perform due diligence to vet the syndication you’re considering for your IRA—apart from that, there is little to no ongoing participation from passive investors. An investment sponsor for the syndication does the legwork and outlines all details of the project in the investment prospectus. Throughout the term of the syndication, the investment sponsor and management company handle the day-to-day operations of the property.

Syndicated investments are usually structured as LLCs or LLPs and run from 3-7 years, depending on the project. The investment sponsor manages the entity, and investors are limited partners or passive members.


In general, here’s how it works:

  • The investment sponsor locates and vets all investment property.
  • The sponsor creates a prospectus for potential investors to review.
  • Investors complete documentation and submit funds to participate in the investment.
  • Income is typically gained through monthly distributions of preferred returns and/or profit splits.
  • When the property is sold or re-positioned, investors generally get their initial investment back, as well as a substantial portion of the profits.

Where to find a Syndicated Real Estate Investment Opportunity

  • Multifamily conferences and symposiums
  • Personal relationships and industry connections
  • Real estate investing associations (REIAs)
  • Social media and educational podcasts
  • Attorneys who are experts in syndications
  • Reputable online real estate investing syndication platforms

You Choose Your Investments, and Advanta IRA Takes Care of the Rest

The greatest aspect of self-directed plans is that you don’t have to worry about the administration of your account. Advanta IRA takes care of that for you. You work one-on-one with the same account manager who ensures all paperwork is in order and that the investment process complies with IRS standards.

If you would like to discuss this process in detail, schedule a free consultation with Advanta IRA today. We are happy to speak with you to help you decide if self-direction is a good fit for you.

Additional reading about self-directed IRAs and alternative assets:

4 Reasons to Invest in Duplexes and Triplexes in an IRA

What Is Unimproved Land and How to Invest with an IRA?

FAQs about How a Checkbook Control IRA Works

This article was initially published on December 12, 2019, and has been updated with current information.

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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.