Options for investing $250k from my SDIRA

21 Replies

I'm looking for different options on investing about 250K from my SDIRA, it can be long or short term but don't want anything to risky.

Thanks!

@Account Closed

You could buy notes with it, there was a podcast not that talked about it ... I can't remember what number, but part of it what him talking about how he was a carpenter, and he learned from the best carpenter how to be the best.  I think he also talked about how everyone told his wife he was trouble >.> i'll try and find it.

EDIT: i think it's this one https://www.biggerpockets.com/renewsblog/2015/11/19/bp-podcast-149-early-retirement-real-estate-bubbles-and-dangerous-scams-with-radio-tv-star-clark-howard/

Originally posted by @Account Closed :

I'm looking for different options on investing about 250K from my SDIRA, it can be long or short term but don't want anything to risky.

Thanks!

 Hey Andrew,

Good news, when it comes to SD IRAs the world is kind of your oyster. As long as it isn't a collectible, life insurance, or an S corporation, you can really do most anything. There are some additional rules regarding with whom you do business that you should be aware of as well. You can look into real property i.e buy a house or small multi-family, you could look at tax liens/deeds, you can lend the money directly to someone developing a project, you can even purchase undeveloped land in a speculative investment if you think that the land will need to be developed in the future. You can buy land with timber on it and sell the rights same with oil, you can even purchase earth moving gear and lease it out. Some of those will be more complex to accomplish, and some are riskier than others, but all of them are options. 

My best advice, do what you know. Most people open SD IRAs because they believe that they know what they are investing in better than their broker knows the stock market. Is that true? Sometimes, othertimes its hopelessly false. If you stick to something you know well, chances are you will come out ahead because you understand the variables and pitfalls involved. The last thing you should do is be sold something....This is where most SD IRA owners get into trouble. They get hooked up with a company promising 15% liens and charge fees for giving you access to their "exclusive listings" and what not. Some of these companies are helpful, and some are just looking for a quick payday. Be sure you do your own research before taking other peoples information as gospel truth.

Adam

I'm getting 20%+ on my own tax lien portfolio with very low risk. I can't think of a safer investment to make.

I've got lending opportunities at 12% where your money is in 1st position at no more than 60% LTV. That's a pretty safe position.

Otherwise their are tons of investment funds and JV opportunities where you can contribute equity and take advantage of someone else's expertise.

Originally posted by @Andrew Whalen:

I'm looking for different options on investing about 250K from my SDIRA, it can be long or short term but don't want anything to risky.

Thanks!

A lot really depends on what you want to accomplish. So many different answers for a question like that. I would look locally for some REI meeting. See what's going on.

Keep in mind real estate is investing and there's always risk associated with it. I've raised a lot of capital over the years( private funds ) rates vary depending on the projects. . Locate Jay Hinrichs on here.  Jay has been in the lending business for years.

If some one can give it to you straight it would be him

Alex

Commack Long Island, was  born and raised in Ronkonkoma myself been a long time since In have been back there.

Thanks Alex, I will look into what you suggested. I have a couple of friends who live in Ronkonkoma. I'll be heading south myself in a few years (about 10 years).

Hi there Andrew.  I opened a SDIRA about four years ago.  I started with a tax lien fund, then invested in a multi-family limited partnership.  I'm still in both of those, and averaging around a 10% return.  The multi-family is so much fun that I've teamed up with @joefairless as a GP to get investors and we are working on our second acquisition in Houston!  

I've also recently had lots of fun using my SDIRA in crowdfunding sites like Patch of Land and Realty Mogul.  Finally, I'm buying Gold and Silver Bullion on a regular basis.  The key for me is to diversify and like you, I'm pretty conservative.  

Originally posted by @Account Closed :

I'm looking for different options on investing about 250K from my SDIRA, it can be long or short term but don't want anything to risky.

Thanks!

Have you made a RE investment before? There's quite a bit of directions you can go into. You can go the Turn-key property route, buying your own property and self managing, pulling your capital together with others(real estate crowdfunding). 

It comes down to what your goals are. Hope that helps

Wish you the best of luck

I have in SDIRA invested in a lending fund and a tax lien fund. Both are generating consistent double digit returns (10-12%) paid out quarterly. Beats the freaking stock market for sure! I would also invest in MF syndications if I had free cash in there. Sadly, I cannot add to the SD IRA as I am stuck in the company 401K!

Originally posted by @Anish Tolia :

I have in SDIRA invested in a lending fund and a tax lien fund. Both are generating consistent double digit returns (10-12%) paid out quarterly. Beats the freaking stock market for sure! I would also invest in MF syndications if I had free cash in there. Sadly, I cannot add to the SD IRA as I am stuck in the company 401K!

 Which is why I have started to write loans from mine.  The interest/profit I get builds up immediately, in cash, which allows me to write more loans using these profits...and not depend on new contributions by me.  

Are you thinking more notes or like rental properties, or are you wanting to do something more active like flip?

I work with rental properties and you can certainly buy them with an SDIRA, you just have to do a couple logistical things but no biggy.

I'm probably going to disagree with a few people on this post...

First off, for those of you out there looking to start a SDIRA, there is a lot more options then just a roth or traditional. You have HSA, ESA, SEP, and a variety of other ways to invest besides the company 401k that someone mentioned. You can squirrel away money multiple ways that you can tap into for real estate investments. I've attached a flyer that Quest IRA has put together for me that I provide to potential investors...

I'm not a big fan of multi family investments right now.  They are the most expensive asset class out there and your money can go a lot further and you can get a better deal with higher returns on either lending your money out as a private lender or buying paper.  Plus why buy assets at their peak or close to retail...I get wanting to be an apartment investor, but that's kind of like buying something that is at the top of the market with no place to go...

Be careful if you start making loans as you may need to be licensed and then you also run into Dodd Frank issues as well.  Plus, $250K isn't a lot of money for a lot of loans....

This is why I like buying distressed loans. I buy the existing debt at a fraction of what was owed and I have numerous profitably strategies. Plus if you tap into other people's money or IRA's, you can leverage your money to buy a decent pool of assets. I just did several webinars that the replays are available if you are interested.

Originally posted by @Andrew Whalen:

Thanks Alex, I will look into what you suggested. I have a couple of friends who live in Ronkonkoma. I'll be heading south myself in a few years (about 10 years).

Lol very people know about Ronkonkoma down this way or even Long island. Most people assume we are all from NY City  I do miss it though.

Will say it is a much simpler life here, and taxes way cheaper. My grandparents moved down in the early 80s. So I knew I would wind up this way.

Ask away I'm sure a lot of people here can help answer a lot of  questions. you would have

Alex

Owning rentals in an IRA is not a particularly good use of the funds. Real estate has tax advantages which will do you no good in your IRA.

Another one of the advantages of real estate is you can leverage you r money by borrowing to buy more or larger properties. There is a penalty for borrowing in your IRA (UBIT tax or something similar) so you lose two of that largest advantages of real estate investing.

@Ned Carey Sometimes the IRA is the only place where there are enough funds for a wanna be investor to start though. I agree with your statement about owning RE in a SDIRA not the best use of those funds though.

I choose to take advantage of option B on the list of choices. Having your SDIRA setup an LLC within the SDIRA, then fund it (the LLC), and have the LLC/SDIRA make a loan to a different REI outside of the IRA. The SDIRA owns the Loan (paper), and gets the interest income, and the REI that gets the loan owns the Property.

If you know someone else with a SDIRA, this is a great way to get funds for buying property.  Have the other person (with their SDIRA) loan you the money.