The “Gateway IRA” Is Not Your Parents’ Self-Directed IRA. A New Way To Invest Into Real Estate

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By James Jones

CONSTELLATION BRANDS, INC.

There has been a lot of press recently about the value of investing using your Self Directed IRA (SDIRA). It was reported in mainstream media recently that Peter Thiel has one valued at $5bn! While we may not all have the next Paypal idea, we can use the exact mechanism Peter did for our investments. 

That’s the good news, but there is bad also. Let’s face it. For those who have ever attempted to invest with a SDIRA, it is not for the weak of heart. Patient? Maybe. Determined? Probably. Naively duped into thinking it’s “seamless”? Absolutely!

A SDIRA allows an IRA owner to invest their retirement assets from an IRA or rollover 401k into thousands of privately held or alternative assets, including cash-flowing real estate. Think assets that are NOT stocks, bonds, mutual funds, and ETF’s in your brokerage account IRA, and you get the idea.

Is this new? No, it’s been around since the dawn of IRAs in 1974. So why now? The growth of SDIRAs is mainly down to The JOBS Act (1) that birthed new ways for companies to raise capital, allowing both accredited and unaccredited investors to invest like the 1% wealthy and institutions into real estate, private equity and debt, digital assets and cryptocurrency.

For those who haven’t had the “pleasure”, traditionally setting up and then investing with a SDIRA is a task in and of itself. It’s paper-driven typically and takes a lot of back and forth with the IRA custodian. Once you have the SDIRA open each time you want to invest, it is again a paper-driven process and slow, oh so slow.

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That’s only the tip of the iceberg. Wait till you hear about the fees with your Parents’ SDIRA. Well, it’s old. No, really. It’s over 40 years old! The back-office accounting and admirative software of a Self-Directed IRA Custodian is built on legacy technology designed for unique, one-off investments into one specific fix-n-flip deal, or a promissory note, or even some (gulp) gold. And, old takes time. Like two or three months and sometimes more to make an investment (it personally took me five months last year to transfer one asset from one SDIRA Custodian to another).

It can also be expensive, really expensive, like $300 – $400 per asset (investment) per year. Plus $100 every time you make an investment. So let’s say you roll $10,000 into a SDIRA to invest in two crypto coins, three Peer-2-Peer Notes, and five start-ups opportunities on Start Engine. $3,500 could already be deducted in fees for that $10,000 investment. Boy, I really hope those start-ups can get me 10X returns to cover these fees! 

No wonder an estimated 80% of SDIRA investors trying to invest in the new Reg A+, Reg D or Reg CF Platform offerings give up. Forgettaboudit is an understatement.

A new way to invest with a “Gateway IRA”

Enter the “Gateway IRA” offered by the exploding and innovative new Real Estate Investment Platform – CalTier. CalTier is also not your Parents’ real estate fund. They’re not old but young and new and taking an old industry by storm, offering a digital customer investment experience into cash-flowing multi-family real estate on an international stage with a strong, consistent yield AND upside appreciation. 

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Best of all, the Gateway IRA is digital (easy to invest) and free. Yes, free*.

“The Gateway IRA presents a new dawn to the intersection of investment opportunities and technology efficiencies. Everyone at CalTier is really excited to offer this to investors looking to benefit from cash-flowing commercial real estate with the tax advantages of SDIRAs. The retirement industry is valued at over $30 Trillion, and this our Gateway SDIRA will help much of that money access real estate. There are so many barriers to entry for people wanting to get involved in cash-flowing commercial real estate we just had to find a solution. The CalTier platform removes many of these barriers and lets folks invest fractionally into a fund,” says Matt Belcher, CEO of CalTier.

So, let’s go back to that $10,000 investment now, taking the above in mind. Start with my income yield, add in my capital appreciation down the road, and now subtract my SDIRA Fees of $0 and I get……all of my return!

Author:

James Jones is a strategic advisor to CalTier and is a CEO, Advisor, 3X Founder and Angel Investor whose focus is helping companies raise capital by accessing the $30 Trillion retirement industry. Creator of the “Crowd IRA”, James has partnered with Alto IRA, the industry’s first and only Digital IRA offering seamless integration to Deal Sponsors and Investment Platforms with Registered Investment Advisors and Retail Investors. 

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