If you are raising capital for a multifamily syndication or any other investment opportunity—take 2 minutes to read this article. You need to understand how self-directed IRAs present a unique and innovative funding resource for capital raisers. A growing number of people use self-directed retirement plans to invest in alternative assets instead of traditional stocks, bonds, and mutual funds to build retirement wealth. These plan owners control their own investing decisions, and they believe alternative assets have the potential to reap larger returns in shorter periods of time than more traditional investments might.
This means they can invest their IRA or former employer 401(k) funds in your multifamily syndication, hedge fund, startup company, and more.
Below we explore some of the common questions we get about funding and self-directed IRAs.
How Can Capital Raisers Tap into Trillions of Dollars in Funding?
First of all, you can work with self-directed IRA owners and tap into a relatively 
unknown funding resource for capital raisers to fund your venture. According to a press release published by the Investment Company Institute, by the end of the 4th quarter in 2020, IRAs in America held a total value of approximately $12.2 trillion; 401(k)s $6.7 trillion. Imagine what capturing some of that capital could mean for you in reaching the funding you seek for your endeavor.
Also, IRAs are an ideal source of capital for illiquid investments that are locked in for 3-5 years. Many people would prefer to use these funds that they don’t expect to touch for 15-20 years rather than dip into personal savings accounts to invest.
Your current investors may not even realize this opportunity is available.
How Is the Retirement Market a Funding Resource for Capital Raisers?
Simply reaching out to your existing database and sharing this information introduces a brand-new source of investment funds to your current investors, which means they could potentially double their investment with you.
Typically, people who are open to investing in alternatives have probably already incorporated non-traditional assets into their retirement portfolio. For example, real estate is a popular investment in IRAs. But these investors may not understand it’s also possible to use their IRAs and old 401(k)s to invest in private placements. If you have conversations with those who are open to alternatives, once they understand how easy it is to invest with a self-directed plan, you have the potential to attract new investors and more capital for your opportunity.
Simply put, you can educate your current investors and introduce this strategy to potential investors. Any investor would be excited to learn they have additional funds to invest. The fact that returns in self-directed retirement accounts are either tax-deferred or tax-free sweetens the deal.
Advanta IRA Works with You and Your Investors Every Step of the Way
Self-directed accounts are growing in popularity as more people discover the potential of using these accounts to invest in alternative assets and earn tax-advantaged income for retirement. Even so, there are many people who don’t know they can use their retirement funds to invest in investments like yours without moving those funds from their accounts.
This is where you become a valuable resource for your clients and investors, and attract new investors, too.
With proper education and an understanding of how self-directed IRAs work, you can introduce your clients and investors to a supplementary and potentially large investment capital resource—their own retirement plans. People can use their IRAs, their HSAs and if they have funds in an old employer 401(k), they can roll that into a self-directed IRA to invest.
So, in addition to their personal funds, people can invest with their IRA funds and capture a larger stake in the potential earnings of the investment. This is an incredible funding resource for capital raisers.
Advanta IRA is the nation’s premier self-directed IRA administrator. Our goal is to empower individuals by showing them how to use their retirement funds to invest in alternative assets and help reach the retirement income they desire.
Here are a few of the benefits Advanta IRA provides:
- We allow every alternative investment permitted by the IRS.
- We give you and your client one dedicated account manager to facilitate a seamless investing process.
- We educate clients and referral partners on the IRS rules and regulations regarding these accounts.
- We provide educational resources (webinars, zooms, marketing collateral) for you and your clients that detail how self-directed plans work so you each can achieve your goals.
Contact Advanta IRA today and let’s talk about how you, your clients and your potential investors can benefit from understanding and using self-directed IRAs.
