How to Invest in an mREIT using a Self-Directed IRA

A Self-Directed IRA (SDIRA) is a distinct class of retirement account, in which you keep total control over the investments in your account. This little-recognized type of IRA lets you be in greater control over your investments and more freedom in the types of investments you could do than most IRAs offer. With a self-directed IRA, you could invest directly in real estate, private businesses, mortgage/debt service companies (like Plural America), precious metals, and other types of what the IRS calls “alternative assets,” which you typically can not invest through traditional IRAs. If you have a 401(k) from a preceding job, you may want to contact your plan administrator to rollover your funds so you can invest those funds in something with a higher yield rate. 

A popular investment for self-directed IRA holders is commercial real estate, and a common way to invest directly in commercial real estate is through a Real Estate Investment Trust (REIT). A current trend in the financial markets is REIT's dedicated to mortgage notes or debt (mREIT). This type of REITs offers an additional level of safety against market volatility mainly because such mortgage notes compromise a fraction of the real estate property market valuation securing such notes.

Depending on whether or not you already have an SDIRA set up, there are two main paths you could take to invest in REITs using your retirement funds:

HOW TO SET UP AN SDIRA TO INVEST IN A REIT (OPTION 1: IF YOU DO NOT HAVE AN SDIRA)

If you do not have an SDIRA presently set up, our team of specialists will assist you to get started by directing you to several custodians where you will be able to: Open a new account with a custodian Fund the account by transferring funds from another existing retirement account, and/or make contributions this year’s election to the new account Use the funded account to invest our mREIT. If you choose to open a new account with our preferred custodian, the Entrust Group, the procedure for opening an SDIRA and placing an investment is combined into one process which may begin by selecting your investment of choice. We have created specific mREIT strategies with clear investment objectives. The primary goal of mREIT is diversification and profits, whereas the objective of mREIT is growth and income through short-term loans. Investing with the Entrust Group also means that Plural America will pay up to two consecutive quarters of custodial account maintenance fees charged for the first year of investment if you make an investment of $10,000 or greater, or up to four consecutive quarters of custodial account maintenance fees for the first year of investment if you make an initial investment of $25,000 or greater.

HOW TO USE AN EXISTING SDIRA TO INVEST IN an mREIT (OPTION 2: IF YOU ALREADY HAVE AN SDIRA)

If you already have an SDIRA established that you would like to use to place an investment, the first step is to find out who your custodian is, or where your funds are held. Once you know where your SDIRA is held, our team can help you determine whether or not they will be able to accept an investment with us.

If your custodian determines they are compatible with our platform, you may begin your investment in our mREIT with the objective of diversification, income, and growth through our lending platform.

If we are not able to work with your existing custodian, you are still able to open an additional account with a different custodian should you choose, and subsequently transfer funds from your existing custodian into the new account, or contribute this year's election to the new account. We will facilitate the transfer or rollover process with your old custodian.

Ready to invest? Download our flyer, 5 Steps to Invest Your Retirement Funds in an mREIT, for a simple guide on how to get started, or sign up here to become a member. There are risks to investing in mREITs including the loss of capital, so it is important to understand any investment before allocating to it. As always, investors should understand the risks associated with real estate investing and that nothing is guaranteed.