Alright, the 401(k) your employer provides you probably won’t let you invest in apartments. You’re stuck picking from a bland dropdown of mutual funds, and maybe a target-date fund if you’re lucky. But here’s the truth: your retirement money is yours to command. And if you move it into the right kind of account, you can invest in whatever you see fit, without a financial institution dictating what’s on the menu.

And yes, that includes apartment buildings.

As a software professional, you’re used to building things, debugging systems, and optimizing for long-term performance. So why should your retirement account be any different? Let’s walk through how you can take control of your capital and redirect it into real estate. Specifically, multifamily syndications that generate cash flow and appreciation while you stay focused on your day job.

Why Most People Think They Can’t Invest in Real Estate with Their 401(k)

Most employer-sponsored retirement plans are like closed-source systems: they only give you access to what’s been pre-approved. You can’t modify the codebase, and you certainly can’t swap out the core logic. In practice, that means you’re limited to whatever funds your plan administrator allows; typically these include mutual funds, ETFs, and a few low-yield bond options.

There’s no “real estate” dropdown. No button that says “invest in a 300-unit apartment building in a growing market.”

So it’s no surprise that most tech professionals assume investing in real estate with retirement funds is off-limits. But that’s only because they haven’t seen the source code behind the system. In reality, the restriction isn’t with the law. It’s with your provider.

Once you understand that, the game changes.

The Truth: Your Retirement Money Is More Flexible Than You Think

The key thing most people don’t realize is that your retirement money isn’t locked into your current plan forever. If you’ve left a previous employer, you can roll that old 401(k) into an account that gives you full control over how it’s invested. And if you have self-employment income, even just from a side gig or consulting, you can open your own Solo 401(k) with way more flexibility.

Even if you’re still with your employer, some 401(k) plans allow what’s called an in-service rollover. That’s a fancy way of saying you can move a portion of your funds into a Self-Directed IRA (SDIRA) or similar account, while still contributing to your employer’s plan. Not all companies allow it, but if yours does, it’s one of the cleanest ways to take control of part of your retirement without quitting your job.

In other words, the limitations most people accept are just defaults. And just like any good engineer knows, defaults are meant to be overridden.

You can move your retirement funds into a Self-Directed IRA or Solo 401(k) and open up a world of options, including private real estate deals, precious metals, startups, and more. These accounts are perfectly legal, IRS-compliant, and widely used by savvy investors who want to break out of the Wall Street sandbox.

What Is a Self-Directed IRA or Solo 401(k)?

If you’ve never heard of a self-directed retirement account, don’t worry. You’re not alone. Financial institutions don’t advertise them much because, well, they don’t make money when you take your funds elsewhere.

Here’s the breakdown:

  • A Self-Directed IRA (SDIRA) is an individual retirement account that gives you control to invest in alternative assets, including real estate syndications.
  • A Solo 401(k) is a retirement account for self-employed individuals or solo business owners, offering higher contribution limits than an IRA and more flexibility.

Both accounts can absolutely buy real estate, including full properties like duplexes or single-family rentals. But the IRS has a few guardrails:

  • You (or certain family members) can’t live in or use the property.
  • You can’t self-deal, meaning you can’t personally benefit from the asset today.
  • All income and expenses must flow through the retirement account.
  • You can’t personally do significant labor on the property (e.g., renovations, repairs).

Because of these rules, most tech professionals opt for passive investments, like apartment syndications or turnkey rentals with property managers. But make no mistake: you’re not limited to Wall Street funds.

This is full-stack control over your retirement strategy.

How It Works: Investing in Real Estate Syndications with Retirement Funds

So how do you actually go from having money in a retirement account to owning a piece of an apartment building?

Here’s the short version: instead of buying the building yourself, you invest as a limited partner (LP) in a real estate syndication, a pooled investment where experienced operators handle the acquisition, management, and eventual sale of the property. You’re not the landlord. You’re the capital partner.

And yes, your SDIRA or Solo 401(k) can be that capital partner. But there are some structural requirements to stay compliant with IRS rules.

Depending on how the deal is set up and which custodian you use, your retirement account will either:

  • Own shares in the LLC that holds the property (typical for Solo 401(k)s), or
  • Enter the deal via a Tenants in Common (TIC) structure (more common for SDIRAs), where your account directly owns a fractional interest in the property or entity, separate from the other investors.

The TIC structure allows multiple investors, including retirement accounts, to hold separate, undivided interests in the property. It’s not something you need to set up yourself; experienced syndicators and custodians will walk you through it. But it’s good to know the term.

Let’s walk through the high-level steps:

  1. Open a self-directed retirement account with a qualified custodian (there are many well-reviewed ones that specialize in real estate investors).
  2. Fund it either by rolling over an old 401(k), doing an in-service rollover, or contributing to a Solo 401(k) from side income.
  3. Find a syndication deal that meets your investment goals. This usually means reviewing a sponsor’s track record, reviewing the property financials, and reading a Private Placement Memorandum (PPM).
  4. Submit your investment paperwork through the custodian or trustee managing your SDIRA/Solo 401(k).
  5. The custodian wires the funds into the deal, either into a TIC agreement or directly into the LLC.
  6. Your retirement account becomes a fractional owner in the deal, and any distributions or gains go directly back into your retirement account.

This process might feel a little different than clicking “Buy” on a stock in your brokerage app, but if you’re a software professional, you’ve already worked with APIs more complex than this. And unlike stocks, these investments are backed by real, cash-flowing assets. Not just sentiment and speculation.

Why Tech Professionals Are Doing This

Let’s face it, most software professionals are great at building things, solving complex problems, and thinking long-term. But when it comes to traditional retirement planning, it often feels like we’re stuck in a sandbox with no real tools. You dump money into a 401(k), cross your fingers, and hope the market behaves for the next 30 years.

That might be fine for some. But many tech professionals are starting to ask, “Is this really the best I can do?”

That’s where alternative investing through retirement accounts starts to look really attractive:

  • You value leverage and scale Just like software scales beyond your time, real estate syndications scale your money. You’re leveraging the efforts of experienced operators to grow wealth without trading hours for dollars.
  • You’re used to systems thinking Multifamily investing is a system. You analyze the market, vet the operator, and plug into a proven structure. It’s just like building modular, reusable code.
  • You want passive income, not just net worth Stocks may appreciate, but they rarely send you checks every quarter. Apartment deals do.
  • You’ve seen volatility firsthand Tech-heavy portfolios ride the emotional rollercoaster. Real estate offers a stabilizing counterweight. Especially when held inside a retirement account where short-term liquidity isn’t needed anyway.

And most of all: you want more control. You want to choose your risk. Your operators. Your strategy. Moving your retirement capital into a self-directed account and backing real assets gives you that.

Tax Advantages and Gotchas

One of the biggest reasons real estate shines as an investment class is its tax treatment. And yes, many of those benefits still apply even when investing through a retirement account.

The Good News: Tax-Advantaged Growth

When you invest in a syndication through a Self-Directed IRA or Solo 401(k), your returns are sheltered just like they would be in any other retirement vehicle:

  • No tax on rental income, capital gains, or appreciation while the funds are in the account.
  • Tax-deferred (Traditional) or tax-free (Roth) growth, depending on how your account is structured.
  • The real estate itself often generates losses on paper (due to depreciation), which can offset gains inside the deal, even though you’re receiving actual cash flow.

If you’re used to getting whacked with capital gains on RSUs or bonuses, the idea of letting money grow without friction should feel like working with clean, optimized code.

The Catch: UBIT and UDFI

There’s one wrinkle most people miss until it’s too late: if the real estate investment uses leverage (debt), which most syndications do, a portion of your retirement account’s income may be subject to Unrelated Business Income Tax (UBIT) or Unrelated Debt-Financed Income (UDFI).

Here’s the simplified version:

  • If your SDIRA invests in a deal where the property is purchased with a loan (e.g. 70% debt, 30% equity), then the portion of income attributable to that debt is taxable inside the retirement account.
  • Solo 401(k)s are exempt from UDFI, which is a huge advantage for high-earning tech professionals with side income. (Another reason to consider one if you qualify.)

It’s not a dealbreaker, but it’s something to plan for. Especially when comparing deal structures and account types. A good custodian or CPA familiar with alternative investing can walk you through exactly how this works.

Real-World Example: John the Software Engineer

Let’s bring this down to earth.

Meet John. He’s a 37-year-old senior software engineer working remotely for a well-known SaaS company. Over the years, he’s been diligent with his retirement savings, contributing to his 401(k) at work and even rolling over an old 401(k) from a previous job into a Traditional IRA.

But lately, he’s felt boxed in by the same mutual funds, the same market swings, the same long wait for “someday.” He wanted his money to do more. Something tangible. Something with cash flow.

That’s when he heard about investing in real estate syndications through a Self-Directed IRA.

Here’s what he did:

  1. He opened an SDIRA with a custodian that allowed real estate investments.
  2. He rolled over $180,000 from his old IRA into the SDIRA, penalty-free and tax-free.
  3. He reviewed a multifamily deal offered by a trusted sponsor: a 240-unit value-add property in a growing Sunbelt city.
  4. He invested $75,000 from his SDIRA. The rest stayed in cash or other alternative investments inside the same account.
  5. Every quarter, his IRA receives passive income distributions. And over time, the property appreciates and builds equity.
  6. Because it’s held inside a retirement account, the income is tax-deferred. No paperwork. No tenants. No midnight maintenance calls.

John still writes code during the day. He hasn’t become a real estate expert. He just used the tools available to him to turn his retirement account into something that works harder than it did sitting in a bland target-date fund.

This is how more tech professionals are approaching retirement: not with passive hope, but with active structure.

How to Get Started

You don’t need to become a real estate expert to invest through your retirement account. But you do need to follow the right steps to make sure it’s set up properly and compliant from the start. Here’s a straightforward way to get started:

Step 1: Identify Eligible Retirement Funds

  • Do you have an old 401(k) from a previous employer? That’s usually the easiest place to start.
  • Do you have self-employment or consulting income from a side project? That could make you eligible for a Solo 401(k).
  • If you only have an active 401(k) with your current job, check whether your plan allows an in-service rollover.

Step 2: Choose Between an SDIRA and a Solo 401(k)

  • SDIRA: Great for traditional W-2 employees with old retirement funds.
  • Solo 401(k): Ideal for those with self-employment income; higher contribution limits and typically exempt from UDFI taxes.

Step 3: Open the Account with a Reputable Custodian

  • Look for custodians that allow investments in real estate syndications and understand the process, including TIC structures if required.
  • Bonus points if they support checkbook control or streamlined digital processes.
  • You’ll fund the account via a rollover or transfer, which your custodian will help you execute.

Step 4: Work with someone who vets the right kind of deals

  • This is where we come in.
  • At Growth Legacy Capital, we focus on connecting software professionals with vetted real estate syndications. These are deals we’ve evaluated for operator experience, risk profile, market fundamentals, and strategy.
  • You bring the capital. The operator runs the property. We help ensure the people managing the deal are the kind you’d actually want managing your money.

Step 5: Track results and reinvest strategically

  • Once you’re in a deal, distributions and updates come straight to your retirement account.
  • Over time, many investors roll returns into future deals to grow their exposure and diversify.
  • We stay in touch with investors as new opportunities arise, so you’re not navigating the market alone.

You already debug production issues, manage risk in real time, and deploy complex systems. You’re more than capable of managing a high-leverage retirement strategy that aligns with your financial goals.

Interested in seeing what a real deal looks like?

Let’s talk. We’ll show you how we vet syndications and how you can get involved when the next opportunity opens.

Closing Thoughts: Your Money, Your Strategy

Most people treat their retirement accounts like a black box: money goes in, someone else controls it, and maybe, hopefully, it grows.

But if you’re in tech, you didn’t get where you are by outsourcing all your decisions. You got here by asking better questions, thinking for yourself, and building things with intention.

Your retirement strategy deserves that same mindset.

You don’t have to settle for pre-packaged funds and Wall Street swings. You can take a portion of your retirement savings and invest in something tangible: apartment buildings, managed by well-vetted operators, generating real income, backed by real assets.

You don’t have to become a real estate expert.
You don’t have to manage tenants or toilets.
You just have to know who to trust.

That’s what we do at Growth Legacy Capital: help software professionals like you find vetted syndication opportunities so your capital works just as hard as you do.

If this is something you want to explore, we’d love to connect.