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Allocation into a Tax Protected Account

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  • Allocation into a Tax Protected Account

    I am looking to add Peer-to-Peer loans and Real Estate crowdfunding into my portfolio. I am stuck with the dilemma on how to fund these type of accounts with 401(k)/backdoor Roth IRA money. WCI mentioned on a recent post about placing tax-inefficient asset classes with a high expected return (such as REITs) into a tax-protected account. Does anyone know how to place Peer-to-Peer loans or real estate crowdfunding investments into a tax-protected account?

     

     

  • #2
    Both Lending Club and RealtyShares accounts can be located in IRAs.

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    • #3
      Thanks Vagabond MD. RealtyShares does have a minimum of $10,000 to do a self-directed IRA and I only have $5,500 to invest (upcoming 2017 IRA contribution). Lending Club does have a lower minimum ($5,000) but their custodian (SDIRA) charges a $50 conversion fee to do a backdoor Roth IRA through them which basically is a 1% fee considering you can only contribute $5500 in 2017 towards an IRA. This $50 conversion fee is actually PER CONVERSION therefore will be the same again in 2018 using SDIRA. Anyone have any experience doing a backdoor Roth IRA with either of these companies? Did you or can you go through a different custodian like Vanguard when doing the backdoor Roth conversion then transfer that money a few days later to Lending Club or RealtyShares?

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