Apartments

Multi-family properties that contain more than four units (four-family building). Small apartment complexes typically will have 5 – 50 units.  Learn more…

Art

Investing in artwork is a time-honored way to diversify your portfolio of investments. Unfortunately, you can’t do that inside a self-directed account though as the IRS forbids investing in collectibles. Learn more…

Annuities

A type of annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annuity has two main phases, the savings phase in which you invest money into the account, and the income phase in which the plan is converted into an annuity and payments are received. A deferred annuity can be either variable or fixed.  Learn more…

Commercial Real Estate

Commercial real estate investing is a huge category with many different opportunities. It’s basically any real estate that houses a business or more than a few residential units. Some types of opportunities include: garages, hotels/motels, industrial property, malls, medical centers, multi-family dwellings (complexes), office buildings, storage units, warehouses and much more. Learn more…

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.  Learn more…

Crowdfunding

This is when one raises small amounts of capital from a large number of individuals to finance a new business venture. Aside from creating a new potential source of capital for financing new businesses, it also creates a new form of investment for those seeking alternative investments. Because each investment can be relatively small compared to a venture capital or even an angel investment, an investor can hold multiple stakes which diversifies their own risk.  Learn more…

Cryptocurrency

In recent year a number of cryptocurrencies have appeared, the most notable being BitCoin. It is possible to own and trade these currencies within a self-directed account. Learn more…

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals.  Learn more…

Duplexes, Tri-Plexes and Quads

Same idea as with single-family residences, but you buy multi-family dwellings instead.Whether these are considered residential or commercial real estate depends on the location of the property. Learn more…

Discount Notes

These are short-term debt obligations issued at a discount to face value. Discount notes are usually issued by government-sponsored agencies or highly rated corporate borrowers. Discount notes do not make interest payments, instead the bond matures at a value above the purchase price.The price appreciation is comprises the investor’s profit. Learn more…

Digital Gold Currency (DGC)

An electronic, private currency backed by gold bullion. Companies that provide digital gold currency make it possible for people to own gold and to pay each other online in gold. Digital gold provides the same protection against inflation as gold bars or certificates, but is more secure and convenient to store.  Learn more…

Exchange Traded Fund (ETF)

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. Learn more…

Farm Land

As weather conditions globally have become more volatile and the population continues to grow, good farm land has become a valuable commodity. Learn more…

Foreign Property

Just like it sounds, you invest in real estate in a foreign country. Learn more…

Foreclosure Property

You buy houses that are in the process of being repossessed by lenders due to the owner’s failure to meet mortgage obligations. Typically you would be looking to buy below market value because banks are not in the real estate business and don’t like to hold the assets.  Learn more…

Factors

A factor is an investor that agrees to pay a company the value of an invoice less a discount for commission and fees. The factor advances most of the invoiced amount to the company immediately and the balance upon receipt of funds from the invoiced party. It’s basically a way of making money because you’re willing and able to wait longer to be paid than the company is.  Learn more…

Forex Arbitrage

Forex is short for Foreign Exchange and it is a type of investing that relies on trading against the fluctuations in various countries’ currencies. One trading strategy (probably the most obvious one) used by forex traders is to attempt to make a profit on the inefficiency in the pricing of currency pairs (the US dollar and Japanese Yen being an example of a pair). The strategy involves reacting quickly to opportunities, and is usually done via computers.  Learn more…

Forex Futures

An exchange-traded contract to buy or sell a specified amount of a given currency at a predetermined price on a set date in the future. All forex futures are written with a specific termination date, at which point delivery of the currency must occur unless an offsetting trade is made on the initial position.  Learn more…

Forex Options Trading

A security that allows currency traders to realize gains without having to purchase the underlying currency. Through the use of leverage, forex options magnify returns and set a firm downside risk level.  Learn more…

Gold

One of the most commonly held alternative investments, gold can be purchased and physically held by the investor or one can invest in financial products that use gold as the underlying security.  Learn more…

Hard Money Loans

This is usually a high-interest, short-term bridge loan. Hard money loans are backed only by the value of the property. Since the property itself is used as the only collateral, hard money loans have lower loan-to-value (LTV) ratios than traditional loans.There are a wide variety of uses for this type of loan in real estate transactions and you can do this within a self-directed plan but the capital requirements are relatively high.  Learn more…

Large Apartments

Multi-family properties that are typically larger than 50 units and may have other amenities like a common pool, workout area, etc., not offered with smaller complexes. Learn more…

Mortgages & Mortgage Pools

I’ll assume that if you’re seeking investments you know what a mortgage is. A mortgage pool is exactly what it sounds like, you’re investing in a bundle of different mortgages to diversify and minimize risk of default on any one mortgage. Learn more…

Municipal Notes

Debt issued by state and local governments to finance operations and expenditures. Municipal notes can be good investments because they mature in a year or less, offer fixed income and are often exempt from income tax at the local, state and/or federal levels.  Learn more…

Ma & Pa Shops

A colloquial term for a small, independent, family-owned business. Unlike franchises and large corporations, which have multiple operations in various locations, ma and pa shops usually have a single location that often occupies a physically small space. The “shop” could be any type of business, from an auto repair shop to a bookstore to a restaurant.  Learn more…

Mineral Rights

A landowner’s right to receive a portion of the profits of any minerals that are extracted from the land. Mineral rights apply to all types of resources, such as oil and gas, ores and metals or other raw materials. The term mineral rights describes the numerous beneficial ways the owner can profit from the resources in the ground.  Learn more…

Private Notes and Loans

Fundamentally similar to holding a mortgage, a private note is usually issued either as an investment or as part of a real estate transaction involving seller financing. Learn more…

Palladium

A metal used in many types of manufacturing processes and is found in electronics and industrial products. Palladium is an element found in the periodic table, and is considered rare.  Learn more…

Platinum

A chemical element, precious metal and commodity used primarily in jewelry, electronics and automobiles. It is also possible to invest in platinum by purchasing shares of an ETF that invests in platinum or in a variety of precious metals.  Learn more…

Peer-to-Peer Lending

A method of debt financing that allows individuals to borrow and lend money without using a bank as the intermediary. Peer-to-peer lending removes the middleman, but it can involve more time, effort and risk than traditional lending. As you might expect, as an investment it can also provide greater returns than the corollary bank investments such as savings accounts and CDs. There are now services that facilitate individuals in creating portfolios of peer-to-peer loans.  Learn more…

Private Equity

Equity capital is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.   Learn more…

Private Placement

The sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market. There have been a lot of shenanigans with these in recent years so buyer beware. Learn more…

Private Investment Fund

A type of financial investment company which meets either of these criteria:

a) it has less than 100 investors, or
b) its member investors have substantial funds invested elsewhere.

These types of funds are generally exempt from federal securities regulations and laws and are included under the label of “hedge funds.” Learn more…

Raw Land

Raw land is just land the way nature intended. It is the dirt, the grass, the rocks…it is not developed at all yet which means the possibilities are endless. Learn more…

REITs

Real Estate Investment Trusts. This is a company and investment product that invests investor funds into real estate. The investment strategy can include various types of real estate. Investment returns are distributed out to investors investing into the REIT. It’s a way of making real estate investing completely passive for the investor and you can often invest in REITs through a standard brokerage account. Learn more…

REOs (Real Estate Owned)

This is a specific type of foreclosure buying where the bank already owns a property they have repossessed and they want to sell it, but have failed to do so at an auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most foreclosure auctions equal the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale. Learn more…

RELPs (Real Estate Limited Partnerships)

A limited partnership is specifically for real estate investing. A RELP is typically structured with an experienced property manager or real estate development firm serving as the general partner. Outside investors (like you) are brought in to provide financing for the real estate project in exchange for a share of ownership.  Learn more…

REOCs (Real Estate Operating Company)

A company that invests in real estate and whose shares trade on a public exchange. A REOC is like a real estate investment trust (REIT), except that an REOC will reinvest its earnings into the business, rather than distributing them to unit holders like REITs do. Also, REOCs are more flexible than REITs in terms of what types of real estate investments they can make. Like REITs, the ownership is completely passive for the investor and executed from a standard brokerage account. Learn more…

Rare Earth Metals

The production of smartphones and other high-end electronics requires rare earth metals, 95% of which are mined in China. To invest in these metals would generally mean investing in mining operations or other related services rather than physically holding and storing the metals as is possible with most precious metals.  Learn more…

Single Family Homes

You buy a house and rent it out to tenants. Learn More…

Storage Units

You rent out space for people to store their stuff. This can vary widely, from an unused basement to a climate-controlled warehouse with hundreds of units.  Learn more…

Silver

Silver has the highest electrical conductivity of any metal and is a highly valuable substance. Like any precious metal, it can be physically bought and stored by an investor hoping that the market value of silver rises over time. One can also invest in it via a security like an ETF that invests in silver as the underlying asset. Learn more…

Trust Deeds

In certain states, deeds of trust are more common than mortgages for financing real estate transactions. In a mortgage the bank gives legal title directly to the mortgagee whereas in a deed of trust, there is a third party in the middle that holds the title until the debt is paid off. Trust deeds can contain provisions that are more favorable to the lender than a mortgage.Learn more…

Tax Liens

This is a legal claim by the government against a noncompliant taxpayer’s assets. Tax liens are a last resort measure to force a person or business to pay back taxes. To get rid of a lien, the taxpayer must pay what he or she owes, get the debt dismissed in bankruptcy court or reach an offer in compromise with the tax authorities. Federal and state governments may place tax liens for unpaid federal or state income taxes, while local governments may place tax liens for unpaid local income or property taxes.This is where the investment opportunity arises. It is possible in some cases to purchase a delinquent property for less than it is worth by paying off the back taxes owed on that property.  Learn more…

Websites

There is an early-stage market for buying and selling websites, basically digital real estate. The vast majority of this activity is currently done by owner-operators, but there are investment opportunities forming that allow the investor to passively invest without day-to-day operating duties. Learn more…

Wine

 Wine is another common alternative investment, especially for folks who love the stuff and know it well. It is considered to be a collectible by the IRS though, so this type of investment can’t be held in a self-directed account. Learn more…