Self-Directed IRA Millionaires: Why Tech Pros Are Using Retirement Funds to Buy Apartments
Dear Friends,
If you’re a tech professional with a healthy 401(k) or IRA from your W-2 job — you might be sitting on untapped investment firepower.
While the market swings and bond yields stagnate, a growing number of engineers, IT managers, and software developers are discovering the power of Self-Directed IRAs (SDIRAs) to invest in real estate, especially multifamily.
Let’s dive into what SDIRAs are, how they work, what hurdles to expect — and why this strategy is catching fire in high-income, high-tax professions like tech.
What Is a Self-Directed IRA?
A Self-Directed IRA is a retirement account that gives you control over where your retirement funds are invested — beyond just stocks, bonds, or mutual funds.
With an SDIRA, you can invest in:
Commercial and residential real estate
Private companies
Promissory notes
Tax liens
Precious metals
And yes — apartment buildings
These accounts are typically managed by a custodian who allows for “alternative” asset investing, unlike traditional brokerages like Fidelity or Schwab.
Why Tech Professionals Are Making the Switch
Tech pros are analytical. They want more control. And many are realizing:
The stock market is unpredictable
Mutual funds are fee-heavy and opaque
Real estate offers cash flow + appreciation + tax benefits
You can roll over funds from an old 401(k) without triggering taxes
They’re using SDIRAs to invest passively in multifamily syndications that offer:
6–8% annual cash-on-cash returns
15%+ average annual returns
Equity multiples of 1.8x–2.5x over 5–10 years
Case Example:
My Own Example, I am a 47-year-old IT Manager, I had over $250,000 via past employers’ retirement roll ups in a Fidelity IRA. I learned the power of what Self Directed IRA can do and I decided to roll my retirement into a check book self-directed IRA with Rocket Dollar. I then took that money and invested in 2 Multifamily Deals. A 30 Unit Luxury town home deal in Tennessee and a 216 Unit Complex in Kentucky. I invested 25K into the Townhomes and 200K into the Kentucky deal as a limited partner (LP)
Here’s how the returns break down:
Cash distributions are tax-deferred (since it's a Traditional IRA)
Kentucky deal is projected to get back my $200K investment in year 5 and to return 2.5x my original investment by year 10. That is $500K by 2034.
The Kentucky Deal also is providing me on average a 5% Cash on Cash Distibution each quarter.
The townhomes will be refinanced by 2026 where I would receive $5K of my 25K investment back
The townhomes will start sending quarterly distribution in 2026 at a rate of 5% a quarter.
The projected return on the townhomes is 2.3x my original investment so by year 10 I should expect to return $57,500
The other 25K I kept in the market in tech because well I am a tech guy I lost almost 10% in my tech investments.
So, you can see here the power of how I can turn $225K to $557,500
Oh, but it gets better when the Kentucky deal refinances and I am able to get my $200K back I can take that and invest it all or partially in another deal with the same projections so by the time I am ready to collect social security at 67 I should have over $1million with just a 200K investment
He owes no taxes until he starts withdrawing at retirement
How to Set Up a Self-Directed IRA
Choose a qualified custodian
(e.g., Quest Trust, Equity Trust, IRA Financial, Rocket Dollar)Open an SDIRA (Traditional, Roth, SEP)
Fund the account
Transfer from existing IRAs
Rollover from old 401(k)s
Note: No taxes or penalties if done correctly
Find an investment opportunity
(like a multifamily syndication) Invest with Level or our partners.Instruct the custodian to invest on your behalf
The IRA owns the investment
All income and profits return to the IRA account
What You Can Invest In (and What You Can’t)
Allowed:
Multifamily real estate
Private equity
Startups
Notes
Tax liens
Prohibited Transactions:
You cannot invest in property you or a “disqualified person” owns or lives in
You can’t personally benefit or receive a salary from the investment
You can’t sell property to your own IRA
Disqualified Persons:
You
Your spouse
Parents/grandparents
Children/grandchildren
Tax Benefits & Considerations
Traditional SDIRA: Tax-deferred growth
Roth SDIRA: Tax-free growth (if rules are met)
No capital gains tax on property appreciation
Cash flow and sale proceeds are tax-sheltered
But be careful:
UBIT (Unrelated Business Income Tax) may apply if the SDIRA uses leverage (debt) in the investment
You must file IRS Form 990-T if UBIT applies
It's complex — but manageable with the right tax advisor
Risks and SEC Considerations
SDIRAs are not insured or guaranteed by the FDIC
You must vet deals carefully — due diligence is your responsibility
SEC considers passive LP investments in syndications to be securities, so you must meet accreditation standards for many deals
Illiquidity — funds are tied up for 5–10 years in most real estate deals
Why This Matters Now
With trillions sitting in retirement accounts and inflation eroding purchasing power, more investors are saying:
“Why not use my money to build my future — not Wall Street’s?”
At Level 7 Investors, we help tech professionals like you invest your SDIRA funds into well-underwritten, stable multifamily opportunities across the Southeast and Midwest.
Want to Learn More?
We’ve helped dozens of high-earning professionals safely deploy capital from their retirement accounts into apartment deals with strong cash flow and long-term growth.
📞 Book a free 15-min call to explore if SDIRA investing is right for you
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To your success,
Manny Del Val
Founder and CFO | Level 7 Investors
📍 Investing with integrity. Building generational wealth.
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