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Intro. to self directed & real estate ir as 06.25.13
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Introduction to Self-Directed & Real Estate IRAs Presented By Gary Kowalski © 2012 The Entrust Group, Inc. All Rights Reserved
Transcript of Intro. to self directed & real estate ir as 06.25.13
Introduction to Self-Directed & Real Estate IRAs
Presented By Gary Kowalski
© 2012 The Entrust Group, Inc. All Rights Reserved
Disclaimer
The Entrust Group ("Entrust") does not provide investment advice or endorse any products.
All information and materials are for educational purposes only. All parties are encouraged to consult with their attorneys, accountants and financial advisors before entering into any type of investment.
Agenda
Current state of retirement in the U.S.
What are your retirement plan options?
Who is The Entrust Group?
Understanding the basics of self-directed IRAs
Your investment choices
Investment examples
Q & A
Current State of Retirement in the U.S.
1991: 50% of workers expected to retire before age 65 11% of workers expected to retire after age 65
2013: 23% of workers expected to retire before age 65 36% of workers expected to retire after age 65
Over 30% of households have less than $50,000 saved for retirement
Nearly 50% of U.S. workers are not confident that they will retire comfortably
Sources: The 2013 Retirement Confidence Survey, Employee Benefit Research Institute and the Center for Disease Control’s National Center for Health Statistics.
What are my Options?
Individual Retirement Accounts (IRAs)• Traditional • Roth
Small Business Accounts• Simplified Employee Pension (SEP)• Savings Incentive Match Plan for Employees (SIMPLE)• Individual(k)
Other Accounts• ESA (Education savings)• HSA (Health savings)
Who is The Entrust Group?
Leader in our industry• Over 30 years of service• Nearly $4 billion in
investor assets
Knowledgeable staff• All staff eligible have
earned CISP designation
Educators • National CE Program• National and local in-person events and webinars
Local offices / Designated representative
Entrust is the premier provider of self-directed retirement plans:
Basics and Advantages of Self-Directed IRAs
What is a self-directed IRA?• “Self-directed” is an industry term for an IRA that
invests in non-traditional assets such as real estate, precious metals, private stock, etc.
Take control:• Make your own investment choices
Diversification:• Invest in what you know and understand
Tax savings:• Contributions may be tax deductible• Tax-deferred or tax-free growth
Investment Restrictions
Collectibles • any work of art• any rug or antique• any metal* or gem• any stamp or coin*• any alcoholic beverage
Life Insurance
S Corporations
* Exceptions: Gold, Silver, Platinum & Palladium bullion of certain purity
Residential Real Estate
Commercial Real Estate
Precious Metals
Hedge and pooled funds
Limited Partnerships
Secured and Unsecured Loans
Oil and Gas Ventures
Trust Deeds
Almost anything…
What Can I Invest In?
Your Spouse
Your Parents
Your Grandparents
Your Children
Your Grandchildren
Spouses of
Lineal Descendants
IRA Fiduciary
Disqualified Persons
Certain family members cannot do business with your IRA.
Examples of Acceptable Transactions
Remember the Self-Benefit Rule
Partnering with yourself ona new deal
Partnering with your spouse on a new deal
Leasing property to your siblings
Partnering with your cousin
IRA Purchase of Rental Property – example 1
IRA purchases rental property in Hawaii
• Purchase contract must be signed by Entrust and signed “Read and Approved” by IRA holder
• Vesting must read “The Entrust Group Inc. FBO J. Smith IRA account 12345”
• All rents/expenses flow into/out of the IRA
• Cannot stay there on holiday; cannot provide sweat equity
IRA purchases rental property in Davis, CA
• Daughter cannot rent from your IRA even at fair value
• Examples of ways your IRA can invest:
• “Partner” with yourself
• Partner with others, including your spouse
• Borrow via a non-recourse loan (percentage of net income attributable to the loan may be subject to UBIT (Unrelated Business Income Tax)
• Via a single-member LLC
IRA Purchase of Rental Property – example 2
Single-member LLCs
Advantages: Affords “checkbook” control Immediate access to funds Ease of investing Savings on fees Limited liability protection from claims
Disadvantages: Cost to create You maintain records May be subject to State taxes and filings – check with your
financial or tax advisor
With an LLC, the IRA account makes an investment in the LLC by acquiring its member shares.
Growing Your Business
Enhance your clients’ ability to invest in what you sell
Introduce new ways to invest
Show how to use alternative funding resources
By educating your clients that they can invest with you using their IRAs, you enhance their wherewithal to invest and can attract new clients
Getting Started is Easy
Open an Entrust Account
Fund Your Account
Purchase Your Asset
Three Easy Steps
1 2 3
