6 Ways Accredited Investors Can Invest in Private Equity Real Estate
Flexibility can make a real difference. The way you invest in private equity real estate can impact your tax strategy, your estate plan, and how much control you retain. Whether you’re investing through a retirement account, rolling over proceeds from a sale, or setting up a family entity, choosing the right structure helps align your investments with your long-term goals.
Here are six commonly used structures accredited investors rely on to invest in private real estate today:
1. 1031 Exchange
If you’re selling an investment property, a 1031 Exchange may allow you to defer capital gains taxes by reinvesting the proceeds into another qualifying property.
Why investors consider it:
- Potential to defer capital gains taxes
- Helps preserve more capital for reinvestment
- Allows for strategic upgrades between assets
Important note:
1031 exchanges must be facilitated by a qualified intermediary. To qualify, investors must identify a replacement property within 45 days and close within 180 days. You can read all about various 1031 exchanges here.
2. Self-Directed IRA (SDIRA)
A Self-Directed IRA often allows investors to allocate retirement funds into alternative assets, including private equity real estate, while maintaining the tax treatment of their IRA account type.
Why investors consider it:
- Potential for tax-advantaged growth
- Access to real estate through retirement funds
- Portfolio diversification beyond public markets
Important note:
Investing through an SDIRA comes with specific IRS compliance rules. Not all custodians support real estate investments, so working with a qualified provider is essential. Discover the pros and cons of investing with an SDIRA here.
3. Individual Account
This is usually the most straightforward option—investing in your own name without additional legal structures.
Why investors consider it:
- Simple setup and full control
- Direct communication and reporting
- Useful for investing with after-tax capital
Important note:
All gains, losses, and income are taxed in the year they’re realized, based on your individual tax situation.
4. Joint Account
Joint accounts allow two individuals—often spouses or business partners—to co-invest and share ownership of the asset.
Why investors consider it:
- Shared access to investment materials and performance updates
- Streamlined reporting for co-invested capital
- Ideal for couples or business partners with aligned goals
Important note:
Joint account structuring should clarify ownership percentages, tax treatment, and succession planning in case of death or divorce.
5. LLC
Many high-net-worth investors form a limited liability company (LLC) to invest in private real estate. This can provide legal separation, centralized control, and additional flexibility.
Why investors consider it:
- Limited liability protection
- Centralized management of multiple investments
- Potential administrative and estate planning advantages
Important note:
LLCs must be formed at the state level and require ongoing maintenance. Be sure to consult with legal and tax professionals before investing through an entity.
6. Trust
Trusts are commonly used by investors focused on legacy planning, tax strategy, or long-term wealth protection.
Why investors consider it:
- May support estate and tax planning goals
- Can protect and manage assets for future generations
- Helps streamline transfer of wealth
Important note:
The trust structure you choose—revocable or irrevocable—can have different implications. Work with an estate planning professional to ensure alignment with your goals.
Choosing the Right Structure
Each investor’s situation is unique. The best structure for you depends on your timeline, tax considerations, capital source, and long-term objectives.
Whether you prioritize liability protection, tax deferral, or estate planning, the right structure helps you execute your strategy according to your precise needs.
How We Help
At First National Realty Partners, we specialize in helping accredited investors participate in institutional-quality commercial real estate opportunities—on their terms.
We support a wide range of structures, including:
- 1031 Exchanges
- Self-Directed IRAs
- Individual, Joint, and LLC accounts
- Trust-based investments
Our Investor Relations team works directly with you—and your CPA, attorney, or advisor—to help ensure your investment is structured to fit your plan from the start.
Disclaimer: An investment in commercial real estate is speculative and subject to risk, including the risk that all of your investment may be lost. Securities are only available to verified accredited investors who can bear the loss of their investment. FNRP and its affiliates do not provide investment, financial, tax, legal or accounting advice. The contents of this e-mail have been prepared for informational purposes only, and are not intended to provide, and should not be relied on for, investment, financial, tax, legal or accounting advice. You should consult your own investment, financial, tax, legal and accounting advisors before engaging in any transaction.
