Self-directed IRAs are downright amazing. They let you invest in almost any type of passive investment. Clients can buy unique investments in IRAs that can be very specialized and compelling to them.
The big brokerage houses and new small apps have all types of options for you to choose from. But you often have no control and don’t know all the fees. With a Midland self-directed IRA, you have complete control over the investments you choose. As a result, you get to find the unique asset that you feel comfortable investing in. All our fees are clear on our Fee Schedule.
The standard assets purchased in an IRA are real estate and private placements. “Private placement” is a broad term because the assets in a private placement investment are endless. Let me share some of the unique assets we have seen clients buy with their Midland self-directed IRA.
Distressed Hurricane Houses
Investors in SWFL have been purchasing distressed properties damaged by Hurricane Ian in September 2022. The two most common purchases are ground-level homes that can be rebuilt (to be resold or rented ultimately) and second, properties that have been completely destroyed. IRA owners intend to buy these assets for land value and hold them for appreciation.
Brewery and Whiskey Distillery Investments
We had a group of investors use their IRA to buy into the second round of funding for an established craft distillery. On average, the investments ranged from $50,000 to $250,000. Since the initial buy, the investment valuation has doubled due to increased production and profits.
Indoor Grow Lighting Company
The rage of indoor farming has spawned several start-ups. Clients invested in the initial funding of this company. The company supplies lighting to large warehouse farms that are "cropping up" around American cities. Investments started at $100,000 with an expected return in four to five years.
Southwest Florida Business Bank
Recently, several investors choose to invest in a de novo bank in the sunshine state that focuses on business clients in SWFL. Clients could invest any amount of money in new shares at the cost of $10 per share.
Church Lending Program
An established Christian Church in the midwest wants to renovate the main house of worship and the grounds. Instead of going the traditional fundraising route, the church turned to its congregation. Members could loan the church money in denominations of $10,000, with a seven-year payback at 5%. As a result, the church could borrow all the money it needed, even turning some parishioners away.
These are just a few innovative investments we have seen within the last few months.
Midland is not a financial advisor and operates as a custodian and administrator. This means clients did their research, found these investments, and determined the amount they wanted to invest.
There are many more asset types available for investors to choose from. Get started here to learn about self-directing your retirement dollars.
Please consult your tax and financial advisors before making financial decisions. Investing can be rewarding, but there are always risks. All the unique investments in IRAs listed above do have different degrees of risk. It is up to the individual investor to evaluate and make the final decision on the purchase.
For more information on investing with a self-directed IRA, visit our website.
Written by Dave Owens
President of Midland Trust Company