Self-Directed IRA Alternative Investments

Why Would an IRA Invest in Alternative Assets?

There are a number of reasons why a retirement investor would want to place alternative assets in a Self-Directed Traditional IRA or Roth IRA. Alternative investments are often desirable because they offer:

Asset Choice

With a Self-Directed IRA, investors to choose investments that they understand and allow for more involvement in the process. For example, if a retirement investor wants to invest in local real estate, they can use a Self-Directed IRA to capitalize on that knowledge. The property of their choice can be placed in a Self-Directed IRA and can then be actively managed for maximum profit.

Stable Returns

The roller coaster of the stock market is not for everybody. With the ability to invest in alternative assets, investors can choose those assets that tend to offer predictable returns. For example, think of a multi-family rental property. The rental income is fairly consistent and dependable, while the property itself accrues value over the long term. Other potentially stable assets include private loans and tax liens.

To learn more about purchasing real property with retirement funds, feel free to contact a Real Estate Self-Directed IRA Specialist
(800) 721-4900

Which Kinds of Alternative Assets are a 
Good Fit for Retirement Investing?

The choice of Self-Directed IRA alternative investments really depends on the situation of the individual investor. A popular option for those who are strapped for time is to invest in a "maintenance-free" asset. This can take the form of a private placement or some other hands-free asset. In such an investment, the funds are given over to a third party, who then places them in a specific investment. The third party also performs all necessary maintenance for the investment.

If an investor has knowledge of a specific business area, they may want to consider an alternative asset related to that business. For instance, if the investor currently runs a bakery, they may consider using a Self-Directed IRA to invest in a baking equipment company. Since they know what works and what doesn't, they can focus on the products that have the greatest chance of success.

Other retirement investors look to alternative assets as a means of diversification. With Self-Directed IRAs, the possibilities expand to allow for almost any kind of alternative investment. Investors can balance their existing portfolios with IRA alternative investments like precious metals, real estate, and promissory notes.

What are the Most Popular Alternative Assets 
to be Placed in a Self-Directed IRA? 

The most popular Self-Directed IRA alternative investments held by Madison Trust account holders fall into four basic categories. 
Please click the links below to find out more about each of these assets. 

Do you have a question about alternative assets? 
Contact us to speak with one of our specialists today!

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How Does an Investor Place Alternative Assets
 in a Self-Directed IRA?

Once an investor has decided on the right alternative asset, placing it in a Self-Directed IRA is easy. For most investors, this means just submitting a form and supporting documents to Madison Trust that name the alternative asset to be purchased.

Once the paperwork is received, Madison Trust will then acquire the asset on behalf of the investor's account. This process works well for low-maintenance assets like passive real estate investments, private placements, and private loans. 

If an investor finds they need a more robust platform for their transactions, then the account can be upgraded to an IRA LLC. The investor will then have the capability of purchasing assets directly with a dedicated checking account. This platform may be preferred for alternative assets that require multiple transactions.

Ready to start investing in your future?

Reach out to our team, and we’ll answer any questions you may have.
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