Advantages of Investing in Fractional Real Estate using a Self-Directed IRA

by | Jul 29, 2023 | Self Directed IRA | 1 comment




What’s making fractional real estate platforms a growing investment these days? In today’s video, Adam Bergman, Esq. talks about what options are out there.


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IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(k) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

IRA Financial is a retirement account facilitator, document filing, and do-it yourself document service, not a law firm. IRA Financial Group does not provide legal services. No attorney-client relationship exists between Client and IRA Financial, its management, salespersons or IRA Financial’s in-house legal counsel. IRA Financial Group provides IRA retirement facilitation service and CANNOT provide Client with legal, investment, or financial advice. Prior to making any investment decisions, please consult with the appropriate legal, tax, and investment professionals for advice.

IRA Financial is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association & a Committee of Publishers and Associations.). The scope of Professional Services does not include the costs of any custodian related services.

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Investing in real estate has long been considered a lucrative investment strategy, but it often requires a significant amount of capital and time commitment. However, with the emergence of fractional real estate and self-directed Individual Retirement Accounts (IRAs), investing in real estate has become more accessible and manageable for individuals.

Fractional real estate allows multiple investors to pool their resources and invest in a property together. This approach enables investors to own a fraction of a property, which can be as small as a single share or as large as multiple shares. By investing in fractional real estate, individuals can diversify their investment portfolio without the need for a large upfront investment.

One of the benefits of investing in fractional real estate with a self-directed IRA is the tax advantages. Self-directed IRAs allow individuals to invest in a wider range of assets, including real estate. With a self-directed IRA, an individual can use the funds in their retirement account to own fractional shares of real estate properties. By doing so, the investment gains and income generated from these properties can be tax-deferred or tax-free, depending on the type of IRA.

Another advantage of investing in fractional real estate with a self-directed IRA is the potential for higher returns. Real estate has historically provided steady long-term returns, and by investing in fractional shares of multiple properties, investors can diversify their risk and maximize their potential for returns. This approach allows individuals to participate in larger and potentially more lucrative real estate projects that may have been otherwise unattainable.

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Investing in fractional real estate also offers the flexibility to invest in different types of properties in various locations. Rather than being limited to a single property or location, individuals can choose to invest in residential, commercial, or even international properties, depending on their investment goals and risk tolerance. This flexibility allows investors to take advantage of market opportunities in different areas and sectors, potentially increasing their overall investment returns.

Moreover, investing in fractional real estate with a self-directed IRA provides individuals with complete control over their investments. Unlike traditional IRAs that limit investment options to stocks, bonds, and mutual funds, self-directed IRAs empower individuals to invest in the assets they believe will yield the highest returns. By actively managing their real estate investments, individuals can make informed decisions, negotiate deals, and potentially increase the value of their portfolio.

Furthermore, investing in fractional real estate with a self-directed IRA can provide individuals with stable cash flow through rental income. Fractional real estate investments often involve purchasing properties that generate rental income. This steady stream of income can provide a reliable source of cash flow during retirement or while still working, helping individuals meet their financial goals and maintain a comfortable lifestyle.

In conclusion, investing in fractional real estate with a self-directed IRA offers numerous benefits for individuals looking to diversify their portfolios and maximize their returns. From tax advantages and higher potential returns to flexibility and control over investments, this investment strategy opens up new avenues for individuals to participate in real estate investing. As always, individuals should consult with a financial advisor or tax professional to fully understand the benefits, risks, and requirements associated with investing in fractional real estate with a self-directed IRA.

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1 Comment

  1. Blue Collar Bullion Baller

    Don't see the benefit to buy fractional real estate. I prefer to buy REITS and sell OTM options.Maybe im missing something maybe do a video comparing REITS and fractional real estate.Or are they the same thing?
    Thanks Happy stacking/investing.

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