Alternative Asset Due Diligence
Self-Directed IRA Investments: Options and Rules
Self-directed IRAs may hold many qualifying alternative assets, but custodian acceptance, valuation, liquidity, tax, and prohibited-transaction rules can be as important as the investment thesis.
Quick Answer
Federal law specifically restricts life insurance and most collectibles, while custodians may impose additional limits. Real estate, private notes, private funds, and certain closely held interests may be possible, but every structure requires independent diligence.
Common Investment Categories
Real Estate
Direct property, qualifying entities, or funds, subject to title, expense, use, financing, and valuation rules.
Private Credit
Private notes or fund interests evaluated through borrower, collateral, leverage, documentation, servicing, and liquidity diligence.
Private Funds and Companies
Interests may involve limited disclosure, complex valuations, transfer restrictions, conflicts, and tax reporting.
Other Alternatives
Certain precious metals and other assets may qualify only when statutory and custody requirements are satisfied.
What the IRS Restricts
The IRS states that IRAs cannot invest in life insurance or most collectibles, with limited exceptions for certain coins and bullion. IRA trustees may impose stricter asset policies. Review the IRS investment FAQs before acting.
A Practical Diligence Checklist
- Who controls the asset, cash, bank accounts, and valuation?
- What financial information is available and independently reviewed?
- What fees, conflicts, leverage, guarantees, and related-party transactions exist?
- How and when can the investment be sold, redeemed, or transferred?
- What could cause permanent impairment or total loss?
- How will income, expenses, taxes, valuations, and required distributions be handled?
Tax and Liquidity Considerations
Debt-financed property, operating businesses, partnerships, and certain fund structures may create unrelated business taxable income or other reporting issues. Illiquid assets can complicate valuations and required distributions. Obtain qualified tax advice for the exact structure.
Evaluate the Asset, Structure, and Account
Review the current offering materials, confirm accredited-investor eligibility, and discuss account compatibility with your custodian and independent advisers before making a decision.
A Trusted Partner for Accredited Investors
Investor Resources
Self Directed IRA Guide
Learn how retirement accounts can access qualifying real estate and private-credit investments.
Real Estate Investment Fund
Understand how real estate debt funds pool capital and make collateral-backed loans.
Investment Calculator
Model illustrative cash-flow scenarios without treating estimates as guaranteed results.
Private Credit Strategies
Review the alternative lending strategies used by Mid Atlantic.
Why Invest With Us
Review the fund’s approach, underwriting discipline, and investor resources.
Investor Overview
Read the current overview before discussing eligibility or making an investment decision.
Important Information
This content is educational and is not individualized investment, legal, accounting, or tax advice. Mid Atlantic does not act as an IRA custodian and does not determine whether a particular retirement-account transaction complies with tax law. Consult an independent qualified professional and the account custodian before acting. Private placements are unregistered, illiquid, speculative, available only to eligible accredited investors, and involve risk, including possible total loss. Read the current offering documents before investing. Trust metrics are management-supplied and should be reviewed against current company materials.