Invest with Your Retirement Account
Mara Poling investments are eligible for retirement accounts, including IRAs and Solo 401Ks. If you have an existing IRA, Solo 401K, or a 401(k) able to rollover, we can help you take control of those funds and invest them in multifamily real estate, diversifying your portfolio and boosting performance through compounding returns. Your retirement account is ideally suited for the long-term nature of multifamily real estate investing,
With the right structure, you may be able to significantly reduce taxes on withdrawals—potentially by 50% to 70%, or more—even eliminate required minimum distributions (RMDs).
Alternative Investments
Real estate is considered an alternative investment. Traditional brokerage IRAs do not offer alternative investments, offering stocks, bonds and other high-fee investments.
However, with a Self-Directed IRA or Solo 401(k), you can invest in alternative assets like multifamily real estate.
- Converting an existing IRA or eligible 401(k) into a Self-Directed IRA is typically straightforward—and Mara Poling can guide you through the process.
- If you qualify (self-employed with no full-time employees other than a spouse), a Solo 401(k) may be an option. These plans offer additional flexibility, including favorable tax treatment on leveraged investments.
Diversify Your Portfolio
9 our of 10 investors have no real estate in their portfolio. Real estate accounts for just 4% of the total investment in retirement accounts in the US. Adding multifamily real estate to your retirement account increases the diversity of your overall portfolio, provides greater stability, smoother returns, a hedge against inflation, and tax advantages.
Compound Your Returns
All Mara Poling multifamily real estate investments offer a reinvestment option for cash distributions. Reinvesting increases contributed capital, increases earned preferred return, increases distributions, increases equity growth, and may earn a higher member class with greater preferred return rate.
Retirement accounts are ideally suited for reinvestment. Reinvesting distributions, compared to having cash sent to your IRA custodian, increases your return potentially 2% to 6% to 10% or more.
The longer you reinvest, generally, the larger your incremental return
Reduce Your Taxes by 50% to 70% or More
Traditional retirement accounts (funded with pre-tax dollars) are subject to taxes upon withdrawal and require RMDs beginning in your 70s. When converting to a Roth, you pay taxes based on the current value of your account. Multifamily real estate investments may help reduce that taxable value through fair market valuation (FMV).
Unlike publicly traded stocks, real estate investments are valued annually by an independent third-party firm, in accordance with IRS guidelines. In many cases, this valuation may be lower than the original investment amount—not due to poor performance, but because of IRS-mandated valuation factors.
This lower FMV can reduce the tax burden at the time of conversion—potentially saving 50% to 70% or more.
A Simple Example
Consider the following:
- You own a traditional IRA with $100,000 in stock
- When you withdraw you will pay tax on that $100,000 and any gain earned through your investment
Now imagine:
- You transfer the IRA into a Self-Directed IRA
- You invest in a Mara Poling multifamily fund
- The first-year FMV is $50,000
- Now you convert to a ROTH IRA
Your tax on conversion would be based on $50,000—not $100,000—resulting in just $10,000 in taxes (assume a modest 20% tax rate for our example).
Now assume the investment grows to $200,000:
- In a traditional IRA: $40,000 in taxes upon withdrawal
- In a Roth IRA: $0 in taxes
Result: $30,000 in tax savings—a 75% reduction.
Invest via a ROTH Retirement Account for Tax-Free Withdrawals
The real advantage of a Roth conversion is not just initial tax savings—it’s long-term, tax-free growth.
- All future growth is tax-free
- Withdrawals—including gains—are tax-free
- And not subject to RMD (required minimum distributions)
As your multifamily investment grows, that growth compounds without future tax liability.
Your Retirement Account is Ideal for Long-Term Multifamily Real Estate Investing
The majority of retirement account investors have 15 years or more before they begin withdrawals. Long-term investing in multifamily real estate increases stability and security, optimizes returns, and maximizes tax advantages.
Multifamily real estate performance cycles through stages over time, Growth, Maturity, Contraction, Trough. Historically the trend-line has been positive, with some troughs in line with prior period maturities. Long-term investing takes advantage of the positive trend-line and smooths performance, lessening the impact of each stage.
Multifamily real estate currently is in or around the trough of the cycle. Investing today has the unique advantage, compared to other stages, of properties being available at lower prices, some sellers are distressed or under debt pressure, and cap rates are typically expanded (the price of $1 of NOI is down).
Investing today can result in locking in a low cost basis, increasing long-term returns, providing a margin for error, and positioning us for upside as the market returns to growth.
Succes in any investment is never guaranteed. Investing in a Mara Poling multifamily investment today increases the likelihood of success.
Important Disclaimer
Mara Poling is not a tax advisory firm, and this information is not intended as tax advice.
This strategy is shared based on the experience of many Mara Poling investors who have implemented similar approaches. Every situation is unique.
We strongly encourage you to consult with your tax advisor. We are happy to work with you and your advisor to help evaluate whether this strategy is appropriate for your goals.
Learn More
Contact us to learn more about investing in multifamily real estate with your retirement account. Visit The Multifamily Real Estate Channel for in-depth videos on each of the benefits of investing in multifamily real estate using your retirement account.
