Investing with a Self-Directed IRA (SD-IRA)

Can I invest with my self-directed IRA (SD-IRA)?

It depends on the sponsor; the sponsor will determine if they accept investment with a SD-IRA

If there is sufficient time before the closing, sponsors with deals on the CrowdStreet platform may accept investments from an SD-IR  account since it may take up to 10 business days for the custodian to fully process and remit funds. If the sponsor has an expedited closing date, they may be unable to accept SD-IRA funds. 

For information on how to invest using your SD-IRA funds, view this article: How to submit an offer using a self-directed IRA (SD-IRA).

Why don’t some sponsors accept SD-IRA funds?

There are various reasons a sponsor won’t accept SD-IRA funds. For instance, accepting SD-IRA funds requires the sponsor to provide an annual fair market valuation on the project, which could become expensive.

To see if a sponsor will accept SD-IRA funds, check on the right side of the offering details page. There will be a line that says SD-IRA Investments? with either a Yes or a No.

Do I need to be an accredited investor to invest with an SD-IRA?

Yes, even if you are investing with an SD-IRA, you will need to be accredited and prove your accreditation status to CrowdStreet.

For more information on accreditation, including how to prove your accreditation status, view this article: Accreditation overview.

Which IRA custodian should I use? 

CrowdStreet is agnostic as to which IRA custodian you invest through. Our platform has partnerships with Millennium Trust, Entrust, and Equity Trust, which eases some of the operational burden of the required paperwork.

Before you make your decision, you will want to confirm that the provider you choose offers custody of alternative investments, such as the private equity commercial real estate offerings available on the CrowdStreet Marketplace.

How do I set up my SD-IRA Investing Account on CrowdStreet? 

When you create your Investing Account on CrowdStreet, you’ll want to be certain to use the correct name for your account, as provided by your IRA custodian (for example “Custodian IRA FBO First Last Acct#”), and select IRA as your account type.

For more detailed instructions on how to create your Investing Account, view this article: How to create or update an Investing Account.

What is the process for completing an investment through my SD-IRA Investing Account?

Each IRA custodian’s process is different. It’s important to understand your specific custodian’s processes.

For example, some custodians allow the investor to execute closing documents, while others will require that they sign on behalf of the investor. Some custodians require the offering’s sponsor to countersign closing documents before releasing funds, while others are satisfied to file completed documents after the investment is funded and finalized, etc. Confirm with your custodian before you make an investment.

Are there any tax considerations to using my self-directed IRA to invest in private equity commercial real estate (CRE) offerings?

Often CRE offerings will result in unrelated business taxable income (UBTI) for tax-exempt entities, such as SD-IRA accounts. We advise investors or prospective investors to connect directly with the sponsor on that particular offering to assess whether this offering would cause the IRA account to file a tax return and pay tax on UBTI. We also advise all investors or prospective investors to consult with an accountant and/or or tax professional regarding the consequences of UBTI on an IRA account. 

We have an article to help educate investors on the subject of UBTI:  Understanding UBTI in Real Estate Investments. Note: CrowdStreet and its affiliates do not provide tax advice. 

I have set up an IRA Investing Account. How do I submit an offer on the CrowdStreet Marketplace using my SD-IRA?

For information on how to invest using your SD-IRA funds, view this article: How to submit an offer using a self-directed IRA (SD-IRA).