Most retirement accounts hold whatever the brokerage puts in front of you: stocks, bonds, and a menu of mutual funds. A self-directed IRA real estate strategy opens a different door. It lets your retirement money hold alternative assets, including the first-position mortgages that private lenders like 890 Capital make across the Charleston tri-county.

The appeal is simple. A 10% return is one number in a taxable account. The same return compounding inside an IRA — where you aren't handing a slice back every April — is a very different number by the time you retire. Here's how it works, what the rules are, and where the edges are.

What a self-directed IRA real estate account actually is

A self-directed IRA is a regular IRA — Traditional or Roth — held at a custodian that allows alternative assets. The tax treatment is identical to any other IRA. What changes is the menu. Instead of being limited to publicly traded securities, you can direct the account into private investments the IRS permits, including real estate and private loans secured by real estate.

The mechanics matter. The IRA owns the investment, not you personally. The custodian holds title and processes the paperwork in the account's name, and the monthly interest flows back into the IRA, not into your checking account. You direct the decisions; the custodian handles custody and reporting. The IRS lays out the account rules and the prohibited-transaction lines in its IRA guidance.

Three steps to get set up

1. Open a self-directed IRA with a custodian. 890 works with Forge Trust, which specializes in alternative-asset IRAs. You can open a new account or convert an existing one.
2. Move retirement money in. A direct transfer from another IRA, or a rollover from a 401(k), is not a taxable event when it's done custodian-to-custodian. Your custodian and CPA will confirm the right path for your situation.
3. Direct the IRA into the investment. Once funded, the IRA subscribes to the fund. From there, the monthly interest compounds inside the account.

None of this is exotic, but the setup has to be clean. The funds move between custodians, the subscription documents are in the IRA's name, and you don't take personal possession of the income. Those are the guardrails that keep the account's tax status intact.

Traditional vs. Roth: two ways the growth is taxed

The account type decides how the compounding is taxed, and it's the part worth thinking hardest about.

A Traditional self-directed IRA uses pre-tax dollars. Growth is tax-deferred: every month of interest compounds without a current tax bill, and you pay ordinary income tax on withdrawals in retirement. This is the common choice for people in a high bracket today who expect a lower one later.

A Roth self-directed IRA uses after-tax dollars. Qualified withdrawals — including every month of interest the loans have paid over the years — can come out tax-free. If you believe a stream of 10% monthly interest is going to add up, sheltering that growth from tax entirely is the version that tends to turn heads.

Either way, the difference over time comes from what you're not losing. Take $100,000 earning 10%, compounded monthly, over a long horizon. In a taxable account, the annual tax drag quietly lowers the effective rate every year. Inside an IRA, the full amount keeps working. (That's illustrative math, compounded monthly — not a projection of fund performance.)

Why private real estate loans fit an IRA well

Retirement money is patient money. It's not the cash you need next quarter; it's capital with a multi-decade runway. That's a natural match for the kind of lending 890 does.

Every 890 loan is a first-position mortgage on real property in a market the team knows block by block — the Charleston, Berkeley, and Dorchester tri-county. Loans are capped at 75% loan-to-value and have historically averaged around 66%, so there's a real equity cushion beneath each one. Investors are paid monthly, by the 5th, at 10% APY and up, with terms from one to five years. It's asset-backed, it's predictable, and the monthly cash flow is exactly what a compounding IRA wants to reinvest.

Where the edges are

A self-directed IRA is powerful, and it comes with rules you have to respect. You can't personally benefit from the IRA's assets before retirement, you can't transact with "disqualified persons" (yourself and close family), and certain moves are prohibited transactions that can blow up the account's tax status. This is where a good custodian and a CPA earn their fee. Before you move money, read the SEC's investor guidance at investor.gov and talk to a professional. Nothing here is tax advice.

890 is a Regulation D 506(c) private placement, open to accredited investors only, with a $100,000 minimum. If you want to see whether a self-directed IRA fits your situation, request investor access and we'll walk you through the custodian side. You can also get the monthly numbers on our Easy Cashflow list.

The short version: your IRA can do more than hold a stock index. Held the right way, through the right custodian, it can own first-position real estate loans and let a 10% monthly return compound tax-deferred or tax-free. For a lot of investors, that's the difference-maker they didn't know they had.

For accredited investors only. This is not tax advice; consult your custodian and a qualified tax professional. Past performance does not guarantee future returns. See 890capital.com for full disclosures.