Syndicating, Marketing to Self Directed IRAs
We just spent the majority of our capital on an apartment complex and are now starting to look at syndicating and raising funds from self-directed IRA's.
As I have been researching this, I have come across some information that in order to contribute to an IRA you need to make less than $135,000 if single and $199,000 if married.
In order to be an accredited investor, they need to have $200,000 in income if single or $300,000 if married. I know that there are other ways to qualify as an accredited investor, including the $1 million net worth requirement.
The gurus pitch the idea of sourcing funds from self-directed IRA holders and I would assume that most of them would not have a net worth of over $1 million.
Am I missing something or are most self-directed IRA holders not a viable option for investors?
Thanks for the input!
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
If you are doing a 506B offering, you can take 35 non-accredited investors, which likely solves your problem. If that investor is with an IRA custodian that provides education, there is a good chance they are sophisticated, if not, then get your investors educated first before accepting their money.
Many Self Directed investors that I know are accredited. They had good jobs and then retired or quit, either way, they did things right and now have a net worth over $1mm. The net worth factor is in my experience the easiest qualification for people to make.