Investing in Private Equity With a Self-Directed Retirement Plan

A self-directed retirement plan can invest in most private offerings. These offerings include private equity/private stock. When investing in private equity with a retirement account, the dividends and gains from investments are paid directly to the retirement account. These dividends are either tax-deferred (Traditional IRAs) or tax-free (Roth IRAs). There can be capital calls with these types of investments, so please understand the investment and how it affects your IRA.
Investing in private equity within an IRA has been an option since 1974. However, the vast majority of investors are not aware of this option. This unawareness is due to traditional retirement account custodians limiting investments to Wall Street stocks, bonds, and mutual funds. Midland allows investors to choose alternative assets such as real estate and private equity investments to build their wealth.


Who Can Invest in Private Equity With a Self-Directed IRA?

Typically, these alternative assets are limited to accredited and institutional investors. Accredited investors are those proven to be financially fit to invest large amounts of funds over a long time without sustaining a substantial hardship if the asset is fruitless. These funds may include investing in startup businesses, developing technology, gaining capital to improve an existing entity’s viability, and even acquiring an existing business.
Accredited investors can use their self-directed IRAs and other retirement plans to invest in a private stock. This strategy allows investors to build tax-sheltered income in their accounts. Midland works closely with clients investing in private equity to facilitate the purchase in compliance with current rules and regulations. Our ability to do this maintains the account’s tax-advantaged status. It enables our clients the precious time to identify holdings they believe will increase their potential for building retirement wealth.

Buying Land/building Lots In Your IRA

Did you know that income from land purchased with a self-directed IRA flows back into that retirement account tax-deferred or tax-free depending on the account type?
Land investments diversify your retirement portfolio and may offer a better return on investment. Land could be an excellent investment that provides better stability than other real estate and has low maintenance costs.

Long-Term Holdings

Your IRA purchases the land, and you can resell when property values increase, providing a good return. There is the potential for economic growth, urban sprawl, or large corporations to build nearby. Any of these would increase the land’s value 

    Speculative Holdings

    Your IRA hopes to receive the same gains as with long-term holdings. However, these gains happen in a much shorter timespan. As with long-term options, these holdings require minimal effort. The cost of maintenance or upkeep is low.

      Development and Subdivision Potential

      These investments can be tricky but lucrative if the timing of the purchase and potential returns align with the stars. As this category indicates, land can sell in parcels rather than one giant tract. Savvy investors might be able to obtain significant returns using IRA funds to invest in land developments.