Entrepreneurship and wealth building
Self-Directed IRAs: Investing in Private Equity and Real Estate
Self-Directed IRA Accounts: How to Invest Tax Free Directly Into Private Equity & Real Estate Deals
Investors and capital raisers who want to understand how retirement accounts can be used for private deals and what topics to discuss with advisors first.
What you will hear
Carl describes self-directed IRAs and 401ks as accounts some investors use to hold real estate, notes and private placements, not just public market assets. Carl explains the idea to Richard C. Wilson. He started his firm with his sister almost two decades ago. The family already invested in real estate and began using these accounts after learning about them.
The talk also covers some cautions. Carl points to self-dealing and dealing with family members as areas many investors review with an attorney. He also raises personal benefits, such as a second home, as something to discuss with an attorney. For gray-area moves, Carl shares his own preference for a separate account. He adds that some investors start with about $20,000, and that he has seen health and education savings accounts used in a self-directed way.
Five points worth keeping
- Invest in what you know. Carl describes self-directed plans as flexible in what they can hold, with a few exceptions he says to check with an attorney. Examples he gives are real estate, notes and private placements. He sees it as a way to get real diversification in assets the investor understands.
- Two ways to find deals. Investors can bring investments they already know, as Carl and his sister did with real estate. Others use people in their own business network. The platform also offers classes and outside experts on due diligence, private placement risks and private lending.
- Know the common pitfalls. Carl names self-dealing and dealing with family members as common trouble spots. He mentions deals with fiduciaries or partners as another to look at carefully. He suggests getting qualified guidance on the details.
- Personal use cautions. Carl cautions against personal use of what a plan buys. A second home is the example he gives.
- Carl's approach to gray areas. Carl shares that when he is unsure, he personally leans toward using a separate account. His thinking is that a problem may stay contained, and an attorney can speak to whether that holds.
Facts from this talk
- Carl and his sister started their firm almost two decades ago, after their family used self-directed IRAs for real estate.
- Carl notes that rules for passing accounts to the next generation have changed, which is worth reviewing with an advisor.
- Carl says he has seen health savings accounts used in a self-directed way.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Self-Directed IRA Accounts: How to Invest Tax Free Directly Into Private Equity & Real Estate Deals. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around retirement account rules, prohibited transaction risks and account structuring options. Do not use AI to write your own legal agreements.
Related questions
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
Questions about this video
What can a self-directed IRA invest in?
Carl describes them as flexible, with a few exceptions to review with an attorney. He lists real estate, notes and private placements as examples.
Do you need to be wealthy to use one?
No. Carl says high net worth people use them, but many people start with about $20,000. Some build it up through deals such as house flips and rental properties.
What mistakes does Carl warn about?
Carl points to self-dealing and dealing with family members as areas to be careful about. He also cautions about personal benefits, such as living in a second home, and suggests asking an attorney.
Put this into practice with the investor meeting follow-up checklist. See all entrepreneurship and wealth building resources.
