What is a Self-Directed IRA (SDIRA)?
A Self-Directed IRA (SDIRA) is a specific type of individual retirement account that allows holders to invest their retirement funds in other assets, such as real estate. Unlike a traditional IRA, which tends to be more restrictive, a Self-Directed IRA allows you to have more control over the properties you invest in and allows you to diversify your portfolio. There are two different kinds of SDIRAs: Custodian and Checkbook. A Custodian SDIRA consists of transactions and tasks being carried out by a custodian. You direct the custodian to purchase a certain asset for you. A Checkbook SDIRA allows you to purchase the asset yourself. You do not need the consent of your custodian. However, in both cases, you will need a custodian to hold the account for you.
The Benefits of an SDIRA
There are many benefits that an SDIRA can provide you. Firstly, it allows you to take more control over your financial future and invest beyond the scope of the traditional stock market.
Another major benefit is that SDIRAs can provide tax advantages. All income, profit, and appreciation from an SDIRA are left untaxed until distributed from the account. This allows for you investment to be at a tax advantage until the age of 59 ½.
Finally, SDIRAs provide an opportunity to create “tax advantage legacy” for your family. You can choose to have multiple beneficiaries to your account. This will allow those beneficiaries to inherit the money from your retirement account.
Advantages of investing your IRA in CRE?
One of the major advantages of investing in Commercial Real Estate (CRE) is the diversification it provides your portfolio. By investing in an Octave Reality Fund, you are provided with another diversification opportunity, helping mitigate and spread risk. Additionally, investing in a CRE through Octave allows you to realize the potential long-term benefits without the hassles associated with tenant and property management.
Investing your SDIRA with Octave
Investing with Octave Holdings and Investments allows you to bypass the rigors associated with direct real estate investing. By coming in as an OctaveHI investor, you have an opportunity to own a share of the property. To invest with your IRA, you will need to contact a custodian and set up an account (either Custodian or Checkbook) and create the IRA profile in your OctaveHI account with the following information:
- Contact information for the IRA custodian (including the address)
- How the investment should be titled
- EIN for tax reporting purposed
- Wire/ACH information for Cash Distributions
- Custodian requirements for document execution
For more information on Self-Directed IRAs and how you can get started investing with Octave, please Login at OctaveHI.com, and then email us from the Communication Center via the Investor Portal, or call us at 1-833-4OCTAVE.