xhv8mzw7ge79waga35o97s2wbzpfr6 How to Invest in Real Estate Using Self-Directed Retirement Accounts
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© 2019 FIG & RE/MAX Equity

Ken Holman

– NAREA –

For more information contact:

nareagroup.org or ken@nareagroup.org

  Video Length: 51 min

How to Invest in Real Estate Using Self-Directed Retirement Accounts.

- Ken Holman, President, National Association of Real Estate Advisors (NAREA)

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Background:

Ken is a Real Estate Investment Advisor (REIA) and raise investment capital from private investors, Self-Directed IRAs, 401(k)s, profit sharing and pension plans for the acquisition of commercial and residential income-producing properties. Their company, Overland Group Inc., and other separately-owned affiliates develop, construct, finance and acquire real estate that is leased to Family Dollar, Dollar General, Big Lots, O'Reilly Auto Parts and other Fortune 500 National Credit Tenants.

 

Ken is also president of the National Association of Real Estate Advisors (NAREA) and an educational instructor licensed to teach courses on Residential and Commercial Real Estate Investing and Investing in Real Estate Using Self-Directed Retirement Accounts in numerous states. Ken teaches national webinars and speak at conferences for The Entrust Group and Equity Trust, the two largest self-directed plan administrators in the nation.

 

Ken has over 30 years experience in all facets of the real estate industry, with areas of expertise including commercial and residential brokerage, construction, development, financing, property management and financial planning. Ken holds the CCIM, CPM and REIA designations.

Text:

0:05  
Yesterday, he introduced me as the 2007 GQ magazine cover.

 

0:12  
So it's kind of gone downhill from there.

 

0:16  
I do wear two hats. So I'm usually quite a bit. But hopefully today will have a

 

0:22  
little bit of fun. We're, we're in a real estate class, right?

 

0:31  

Okay. So I thought I'd start by giving away a few free houses.

 

0:41  
Anybody else want a free house?

 

0:44  
I can't.

 

0:54  
Okay, so don't tell you anything we do. At the end of the class, I

 

1:01  
have four books we're giving away, not books that I hate. Odds are

 

1:09  
good and bad. He's with two of the speakers that were here yesterday, Matt Sorenson Mark Kohler. And

 

1:17  
they said, Hey, get your welcome to give away a couple of our folks at the end of the class. So I don't know if you've got business cards. But if you brought a business card,

 

1:29  
just pass it to the end of the Romans. And I'll have either Brittany or taters if they pick them up.

 

1:35  
And then we'll do a little,

 

1:37  
we'll do a little round with the end. And if we only have it for business cards outward, I'll just read

 

1:43  
a book.

 

1:45  
How many attended my flagship classes yesterday.

 

1:51  
I wouldn't probably attend to my classes so that that's a good thing. But ready to be here, there was a little confusion. The book says that I'm teaching class on the practical side of real estate syndications, which I talked about yesterday. And then, and then what I thought I was teaching was, how to invest in real estate, using self directed retirement accounts. So what I've done is I've blended the two. And we're going to talk a little bit about self directed IRAs and 401k, stuff like that. And then we're going to get into some syndication stuff and how I new things that our company and

 

2:42  
give you some ideas

 

2:43  
on different projects we're involved with. So Did everybody get the handout? We know who doesn't have a copy of that? So Brittany Ocampo cells,

 

3:06  
I just have to say special things. Shout out to Brittany, who's my assistant, and Stephanie, who handles all of our technology and PowerPoint presentations, a bunch of things like that.

 

3:24  
And Taylor, who we commentary her, she's taking classes at Utah State University, and

 

3:34  
she does

 

3:34  
a lot of our videography work. So we're putting these online, in our company. So anybody to get started. A little bit about me. I have a bachelor's degree from BYU and accounting and an MBA from the University of Utah, which makes it difficult to know who to cheer for and sometimes, but I'm also president

 

4:02  
of our organization called the overland group. And,

 

4:06  
and president of national association called the National Association of real estate files, which we affectionately known was Nohria.

 

4:21  
You may or may not know this, but most commercial real estate agents are not affiliated with nor the National Association of Realtors. And a lot of times they don't want to do that because they don't want to be confused with the residential real estate agents. And

 

4:40  
so we formed an organization to try to represent them plus represent any investors that have an interest in in knowing more about commercial real estate, commercial real estate investing. And our company teaches real estate professionals investors how to list Lee sell buyers and the best in commercial real estate. We offer two days to membership programs. Can you see okay, am I am I in the way of your screen

 

5:11  
of the screen and all the all right?

 

5:14  
Where else can I stand? That would work better?

 

5:18  
This Okay, you're good. All right, I can go over here. And it looks a little weird, doesn't it.

 

5:25  
So we have a basic membership that's free. Or we have a paid membership for $199 a year and after the show, we're giving a discount on that to 150 to 25% discount. So if you decide to go on our website, which is Nori, a group.org, you can sign up for that

 

5:51  
pro membership. If you use the code, Summit 2019, you'll get the discount.

 

6:01  
So and some of the member benefits, we we have everybody basic component members, the monthly e newsletter, and they have, they can get into our free podcasts and webinars and all of that all of our information our newsletters.

 

6:24  
But

 

6:26  
if you become a pro member, you get to take advantage of affiliate discounts. We have several affiliate partners that offer discounts to our members, we have a place where you can put a personal profile on who you are. You also get 20% off on all our educational classes, we offer a designation called a certified commercial advisor, CCA and problem course program 36 hours of content telling you all about commercial real estate. And then you get free forms and checklists and those forms. We're putting them on now. But they're refillable. So if you had a real estate, commercial real estate transaction you were doing, you could get on there

 

7:14  
and find the form and fill it out online, print

 

7:17  
it up and then use it for transaction. And we also have a few investment analysis tools that if you wanted to determine what the return was on any particular investment, you go in there, you plug in your information at

 

7:39  
automatically feeds that information through the various forms and investment analysis documents and eventually gets to here's the return that you can expect on that investment. So pretty cool stuff. Our company that I have owned and operated now for yours and I carry account but

 

8:03  
we're, we're we

 

8:04  
were past 30 years, let me say that I have two sons that I different aspects of our company, one son graduated in construction management, got an MBA, he runs a construction site of our company. And then another son, who was an auditor with Ernst and Young, he's come on board because he's a CPA come on board is kind of our Chief Financial Officer of the company. So we do short term real estate loans, construction development, property management brokerage, we put in the back here, three of our offerings that we're doing, won't talk any about them. But there are pages if it's something that you have an interest in, maybe investing in the Kylie created 40,000 Senior Living, which is an assisted living project and made those head of a minimum investment of 50,000. And those are for accredited investors only. And our overland Self Storage project

 

9:18  
that we're building the base also is, is for both accredited and non accredited investors and that minimum amounts.

 

9:29  
So now you know everything about me, let's get into the class.

 

9:35  
How many of you have an IRA or 401k accounts? Or bunch of you mainly IRAs? How many your IRAs? How many of your 401k.

 

9:47  
Okay, so we got some with both. That's awesome.

 

9:55  
And many final words don't? Well, many plan owners that have these kind of products don't really know much about the companies that they work with, I usually get a show of hands. And I've had some that have told me. Well, I think my plan is with fidelity. Or I really don't know the name of a manager that handles my account, but it's a stock broker, I just go to my company. Have you had those kinds of experiences at all?

 

10:32  
Some shaking their head knows me. Yes. But

 

10:37  
I found that in most cases, these IRAs and 401k plan, plans are some of the most mismanaged accounts on the planet. If you don't have control of your own account, then it creates serious problems.

 

10:55  
I had one guy

 

10:58  
several years ago, called me up and said, I just retired and I've got $2 million in my 401k account. And my stockbroker is ripping me off. I'm not making 2% on my keeps taking more money than I'm earning. And he said, I need some help. So that's what started getting me into all of this stuff. And and we'll talk about a bunch of just practical ideas today. You're welcome to even though this a large class, if you have a comment, or you feel like you have a question as we go through this. I've set aside a little time at the end for q amp a. But I don't mind just fielding questions as we go through the information. So usually more helpful.

 

11:50  
And I was thinking the other day about these types of accounts and said to myself, when I left, my stockbroker for my financial planner, who manages my retirement account,

 

12:06  
have access as a cosigner to my checkbook.

 

12:11  
And I don't think there are many of us out there, that would say, Okay, I'm going to give him access to my personal cheque book. And yet we turn around, and we give them access to the most important account we have in our lives, a lot of times, and these guys are known for charging exorbitant fees, they don't have any accountability, they don't have a vested interest in what you're doing.

 

12:38  
So it really creates a difficult situation to earn a reasonable return on those accounts. Has anybody found that to be the case? Or am I just kind of

 

12:53  
up here talking on my own?

 

12:57  
That is the case.

 

12:59  
Well, that's what I do.

 

13:00  
So all of a sudden managers and financial planners, not and we probably have some in here. So I apologize, if I'm saying this, and you're not one of these guys. But a lot of times they suck the life out of your out of your account, makes it really hard to earn a good return because they're taking their legs all off on the top. And they keep part of your account liquid, so that they can continue to pay their fees. And, and you get what's left over what happens to. So usually the asset management fee has a tendency to really kill a return.

 

13:39  
But there is a better way.

 

13:42  
Self Directed retirement accounts. How many of you have a self directed retirement account?

 

13:48  
Okay, several, okay. So I'm even going to talk about

 

13:53  
the good and the bad if self directed retirement accounts. And where I think you might want to consider here, buddy, these are things that I do from a practical standpoint. So there are 1000 times better than retirement and camp managed by somebody else.

 

14:13  
In my opinion, you can make a lot more money from them. It doesn't mean they're perfect. They,

 

14:22  
they allow you more control over your investment, they ally and maximize your returns, and they limit the fees. So

 

14:36  
I pass that a hand out here.

 

14:41  
I don't know if anybody's talked

 

14:43  
about it. And I know Mike and Matt sort of talked a lot about compliance.

 

14:50  
How many of you attended his class? Okay, a few of you. So we will review a few compliance things, but I'm not going to get too deep in the woods on that. But if you looked at that list, you would be amazed at all of the things that you've been investing with your IRA or 401k account. All the ones on the left are real estate related. All the ones on the right are non real estate related. The surprising thing is you can do everything in a self directed retirement account that you can and any other retirement account plus everything else you can do.

 

15:30  
So

 

15:35  
if you do have a self directed retirement account, you have to use a third party administrator usually.

 

15:43  
Those of you that have self directed account to you have your Who's your custodian, TPA third party

 

15:52  
fidelity

 

15:54  
Corporation, our Corporation, so

 

15:56  
I have no choice and you reach a certain age self directed to letter. There you go.

 

16:03  
Ira club, I never I haven't heard of them. You direct, indirect.

 

16:12  
Were you guys using companies I don't know much about

 

16:17  
I, we captured that. So I'm going to check into them. But the ones that I used

 

16:25  
the big ones equity trust, the interest group.

 

16:32  
The two biggest out there, the one I really liked the best.

 

16:36  
Besides Mac sorts is a program which is relatively new, it's called directed IRA. And so I haven't had much experience with that. You just roll it out this past year. But Mountain West IRA of Boise, I found to be really good. And double opt in since with that, so revert turning points to them. So over the first equity trust.

 

17:08  
They go by eat trust etc.com, or.org.

 

17:16  
And then the other one is called the trust route.

 

17:21  
One,

 

17:25  
e n ke R Us,

 

17:28  

e m.

 

17:30  
So I'm all those are really good companies. But when it comes to investing in real estate, not all retirement accounts are created equal 401k of pat towns are far superior than IRA accounts. Okay, when it comes to earning more and being able to directly invest in income producing real estate,

 

17:54  
how many of you heard that before?

 

17:58  
Okay, just one person. I discovered this as I was starting to learn how to teach these classes several years ago.

 

18:07  
And I thought, I kept bumping up against some issues with IRAs, and how to deal with real estate. And you may not know this, but every real estate, the IRS permits every IRA and every 401k to be self directed. The list that I am giving you are all IRS approved accounts.

 

18:29  
Well, and so you have to ask yourself, if you got your account with fidelity or somebody else, how am I don't get to invest in all these things. You don't get to invest in those things. Because the company that you put your IRA with, will not permit it has nothing to do with the IRS or what they program. So they limit the account so you can invest in, they don't want you to invest in real estate directly because they are a fee. And it's a bigger management headache. So they just deal in publicly traded stocks and bonds, stuff like that, and preclude you from being able to count. So IRAs are 70 to two different types of taxes. The 401k accounts are not

 

19:18  
unrelated business income tax, and unrelated debt finance income.

 

19:25  
Have you heard those two terms before?

 

19:29  
Yes,

 

19:31  
yes, definitely. And what I was going to ask you, if talk about the various options for investing problem,

 

19:40  
you could ensure flights of those that are good generate today, because there are plenty of old, but there are those that will take you closer to this taxi.

 

19:57  
Every

 

19:59  
every

 

20:02  
income producing commercial or residential real estate property that you buy with your IRA, that has data is subject to unrelated business income taxes, and unrelated debt financing. Depending on how much debt you put on the property. Nobody I used to talk about this and I, I have I have clients that,

 

20:33  
that insist on investing their

 

20:34  
IRAs and with me in income producing real estate. And

 

20:42  
so I don't discourage them from doing that for two reasons. One, I still think we can earn double the return that they could earn, even with these two tax liabilities. And then on the projects that we get involved with, I made sure I do everything I can to minimize those taxes. And I can show you some ways of how that gets been like, Yes,

 

21:09  
I set up a solo 401k.

 

21:16  
Absolutely, you can set up a 401k and all your IRA balances if you have

 

21:22  
a traditional IRA or 401k IRA, or Roth

 

21:26  
IRA, to traditional IRA.

 

21:38  
Okay, I didn't do a slide on this. But

 

21:43  
there are two types of IRAs, two types of 401k. There's a traditional, which is you get a tax deduction when you make your contribution

 

21:53  
and a Roth,

 

21:54  
and you don't get attached to direction because you make your contribution after tax, Rob is a better account, you can do the same

thing on 401k. Make your contributions pre tax, and that's called the traditional 401k. And you can make your contributions to after tax. That is called the Roth 401k. And whoever your administrative raises has to help you keep track of that. But the benefit of

 

22:25  
raw accounts versus traditional accounts is when you have a Roth 401k

 

22:34  
date, first of all, you're putting your money in after tax. So you take your money out anytime you want. That's your contribution. You don't have to wait to 59 and a half if you have an emergency that you need. And

 

22:47  
the second thing is the earnings are all tax free Period. End of story. J never pay any capital gains tax on depreciation isn't an issue. Don't worry about any of that. Is it a tax for

 

23:06  
traditional IRAs, traditional for one case, and, and Roth 401k us all require you to be king taking what's called a required minimum distributions are empty, when you turn 17 and a half years old, okay? Why they picked 70 and a half, I don't ever know. But

 

23:29  
But there is one account that you do not have to do that. And that is a Roth 401k, I need a Roth IRA. a Roth IRA is not 72 RMB, you never have to, when you turn 70 and a half, you can leave those in, you can let them grow, you can do but

 

23:52  
there are some limit, sir, are some restrictions. So let's go back to you VIP and us f5 for just a second and talk about notes. And we'll move on to some of this other stuff. But if an IRA is financing to acquire real estate, the acquisition is 72 the payment of the tax on

 

24:15  
on that portion of the income that's attributable to this debt financing.

 

24:20  
The other one up it relates to if you acquire a business within your IRA, but this one relates specific to real estate, which is what we're talking about. And what that means is if you bought a piece of property, and you put 30% down and you use your IRA money to do that, and then you went out and got debt for 70%, which has to be non recourse unless, to the to the account owner. But

 

24:55  
then 30% of that account, your IRA money, not so to attach the other 70% of the income that you earn, on there is some geeky UTM, five cans, unrelated debt financing of towns, and that is not achieve tax is the interest rate, which I think is 35% right now. Okay. So the way I get around that, it's not really get around it. It's trying to be in the mindset for an IRA or the ones to get in and do it, do a real estate deal with an IRA. I always do cost segregation and depreciation. And what that does amp up the depreciation in the early years, reduces the amount of net income that you have that's reportable to the IRS. And then and then you have to pay a portion of the tax on that net income, usually in a new real estate development deal, which is but we specialize in sometimes we do acquisitions, but but I really go after cost segregation, and amp up the depreciation. And usually in those first years, even though you're earning cash flow, for reportable income, I can show negative, negative. And so they never have to hit that. Hit that up. Here is beauty f5 taxes. That's what I do to try and minimize that. For those that invest in real estate. I'm going to give you some ideas of what I do with my IRA here.

 

26:35  
The best type of 401k accounts is obviously the 401k.

 

26:42  
They have two different

 

26:43  
types self directed, they have. And we'll talk about a few of these. But 401k accounts are not subject to use the IIT and UTM fi.

 

26:57  
And so there is no tax, did a little research one time trying to figure out why that was the case, come to find out colleges

 

27:10  
invest a lot in real estate. And they use the 401k and Ira, the 401k case of all of the employees and in the college. And they were able to lobbying Congress and get them to drop the tax from 401k accounts. And so really helpful for them. But it's helpful for any of us that want to do it for

 

27:37  
you, if you're a real estate professional, how many of you are like brokers, okay, or real estate agents or something? All right, several of you. So if you're a real estate professional or an independent contractor, a sale independent contractor, salesman type role, almost any organization, the best retirement account, you could have this what's called the one participant 401k.

 

28:04  
Hey, there are three requirements to have a one participant 401k. And I noticed some of you are taking copious notes. That's good. But

let me say this.

 

28:19  
First of next week, I've written a white paper on this whole thing, 50,000 pages of information. Everything that's contained in my slides is contained in that white paper. If you go into our Noria group.org, you can sign up as a basic free member, you'll have access to that white paper, you download it as a PDF and have it available to you. All of my free presentations are on there. So so that might make it easier. And you can drill down on any of this information we're talking about today. So you have to have a presence of self employment activity, taxable compensation during the year, and the absence of full time employees.

 

29:06  
So how do you set one of these up because of 401k underlying IRAs, which is directly related to the individual, a 401k has to be related

to an entity an ownership. So I just set up an LLC,

 

29:25  
completely separate from everything else. And or this is how I would do it. Like, my situation is more complicated, because I have employed, but I have our own 401k account with all of our employees set up a self directed so every individual employee and self directed through the the 401k, the LLC has to have earned income that they paid you and you can contribute 100%, whatever you're paid into your 401k up to the limits. And I believe it's 18,500 this year, used to be 18. So I think went up a little bit this year, but 18, five, as an employee, you can contribute, you can contribute up to almost 54,000 in one of these accounts. But the other 35,000 or so they put in there has to go in as a traditional contribution. The other can go in as a rock. So you want me to mention a little bit depending on how much you put in there. Yes.

 

30:37  

For all 401k is you have to make a contribution by December 31. IRAs, they like to make a contribution to April 15 of the following year. So you can make an IRA contribution for 2018. But you've lost the window for a 401k for 2018. Yeah, start now, once I retired, by the way, how we doing?

 

31:05  
Okay, so I think we

 

31:10  
did somebody else have a question? You only get one question. Okay. All right.

 

31:26  
Yes,

 

31:28  
you'd be subject to the taxes related to whatever

 

31:32  
account.

 

31:33  
So you have to take that into consideration when

 

31:36  
you're doing it. Yeah. So

 

31:40  
by far the best retirement plans are funded with Roth contributions rather than traditional contributions. And here are some important rules and restrictions governing any IRA or 401k k self directed account. The first set are called Project heaven hit investments, you can invest in life insurance, except annuities, collectibles, and antiques, like wine stamps, coin collections, certain types of points are permitted. That's why you see some of these gold companies doing is they're buying them coins from the government, who's managing them, and then they're selling them to you, and your personal residents. So you can invest in your personal life. You can't invest in a second home with your retirement account, and then you go women.

 

32:39  
And there are certain types of transactions that are prohibited.

 

32:45  
You can't deal with a disqualified person will explain that. And then the companies that are controlled, you can't deal with companies that are controlled by the disqualified person. You can't lend money between your retirement account and disqualified person. And you can't use your retirement account as collateral for a loan you want to take out. Okay, those are all prohibited transactions.

 

33:14  
So who is disqualified to your IRA or 401k account?

 

33:23  
Anybody that you have Livio relationship with, you know, you would say account holder, believe it or not, are disqualified,

 

33:36  
disqualified person to your account, your parents, grandparents, great grandparents, and their spouses, your children, grandchildren, great grandchildren, and their spouses, the fiduciary, the managers, your account service providers, or you know, somebody that's giving you advice. And so I've chosen not to be a fiduciary, you're a service provider, because I want to be able to earn fees from the IRA and 401k that people invest with. So

 

34:11  
anyway,

 

34:13  
there is one couple interesting twists in here, you see, hands, brothers and sisters, you can invest with all.

 

34:26  
The other thing that kind of is a little bit deceiving is

 

34:33  
one thing that you can do with your IRA or 401k is you can invest in a project at the same time and put private money in at the same time you put retirement money into the same new investment. What are they talking about? So dealing is they don't want you to buy with your

 

34:57  
IRA a home from

 

34:59  
a home that you will, you know, they don't want you to buy a $300,000 home and sell it to your IRA for $1.

 

35:09  
You know, so

 

35:10  
they restrict any of those kind of activities. But if you and your IRA are going into a new project at the same time, you can absolutely.

 

35:23  
So key points with my real estate with a self directed retirement account. The retirement or the real estate owned by the retirement plan must be held for investment. No disqualified persons can lemons property, the income derived from the properties paid directly to the retirement account when you purchase real estate. The retirement account must be listed on the purchase contract as the buyer. All funds do this up to the seller must be paid by the retirement and campaign financing obtained to acquire the property must be non recourse to the account owner. Does anybody know what I mean by that?

 

36:04  
What is the term non recourse shales? It just means it's not personal guaranteed. So they can't come after you if the project

 

36:10  
goes south.

 

36:12  
Exactly. So you can't personally guarantee a piece of real estate they do Bye. Bye.

 

36:21  
And this is what I do. I put together real estate transactions where I'm the personal guarantor, and then at the IRA, or 401k. So it's non recourse the damn even though what's recourse to me. And that makes it possible for somebody that has an IRA or 401k to fast and meet the qualifications.

 

36:43  
So

 

36:45  
and retirement accounts can invest in limited liability companies. Unlike a 1031 tax deferred exchange, they have to do what's called a light kind of change but retirement accounts could have been bye ownership and LLC.

 

37:04  
Types of self directed retirement accounts, I've listed them here I'll just highlight a few tax deeds and tax liens, real estate options real estate investment trusts both public and private. residential real estate investment that includes digs and flips, single family homes impacts as drive prices for Lexus, you can invest in promissory notes, hard money, loans, commercial real estate, retail, I do triple that leases, office buildings, multifamily apartments, many fall lads assisted lately in medical office land, industrial self, Kelly, you're going to mess them.

 

37:47  
All of them are permitted.

 

37:50  
So

 

37:51  
here's how you set it apart eagles. And

 

37:58  
I put together with what's called a real estate syndication.

 

38:03  
I mentioned the other day, it has nothing to do with the mafia by the way.

 

38:08  
It's just a term where a sponsor and a group of investors pool their money together to buy a project that's bigger than they could do on their own. And most of our projects are

 

38:24  
started a couple million dollars and go up to its highest 33 that I put

 

38:33  
offering little offering things on

 

38:36  
back there are low brochures, I have one that's about eight and the other.

 

38:43  
One's about 20 and went out 30 minutes. And we're raising just the equity portion of the debt portion of that. So it winds up being about 25% of what the total value is, what does it raise equity capital.

 

39:00  

So

 

39:02  
these projects that I do are regulated by the SEC. And

 

39:09  
because out an LLC,

 

39:13  
a real estate project that's owned inside an LLC is called a security. The LLC is a security gotcha real estate. So the FCC regulates

 

39:25  
any entity like that That's true, that's tradable like college security. And so to avoid having to spend thousands and thousands of dollars to register these offerings we do, we fall under an exemption, which is called rule five or six of regulation D, the Securities and Exchange or the Securities Act of 1933. And if you follow rule 506, you can do these without register registering and what the SEC, so we have a securities attorney, and we work very hard at knowing how to do that.

 

40:11  
When you do that, if you have all accredited investors, you can do general solicitation. But if you have a limited, if you have up to 35 non accredited investors, then you are prohibited from doing any general solicitation. But you can have an unlimited number of credited investors and up to $35 credit and any. So we watch the types of projects we do. And some we offer with non accredited investors that we permit to come into our deal with some of the smaller projects, they still earn the same good returns. And some of the bigger projects are all

 

40:52  
limited to accredited investors. And we we put together a private placement memorandum private offering memorandum. We want to provide full disclosure. Yes. What is it?

 

41:07  
That is the funniest? That is a really great question. And it's pretty funny, actually, the FCC doesn't define that term. And so it's left to all of us to try and figure it out. Okay, I think what they're trying to say, a no disparagement to grandma or grandpa, because I am one. And maybe you should have said I ever went. But

 

41:34  
But if you get somebody that maybe inherited a bunch of money, and they don't know how to analyze these financial refunds, projects, then you're in deep trouble if you go after somebody like that, take their money lose a forum and and the FCC finds out about so sophisticated means that you either have the ability to analyze a financial investment yourself, or the financial resources to hire somebody can do it on your behalf by tax authority account somebody?

 

42:13  
Yeah.

 

42:15  
Are you.

 

42:27  
So

 

42:29  
if you're buying the real estate itself, and you're doing it as individuals, you're not subject to this. The minute you say, partnership, form a legal document.

 

42:43  
You're into this

 

42:46  
by law, but the from a practical standpoint, does the FCC have time to go after every family members that are trying to deal together?

 

42:59  
They don't.

 

43:01  
Full disclosure Realty. And a primitive invest investor earns a million half a million dollars in net worth

 

43:08  
excluding their own or

 

43:11  
they have earned income of 200,050 capitalists eventually together 300. So we have what, four minutes.

 

43:23  
And I'm going to give it just a couple little quick examples of deals I've done. I showed these the other day, on a slide that when we're talking about 1031 investors, because I mean, I don't know anybody else that does quite what I can do. But I think I figured out how to take the 1031 investor and have it take IRA and 401k investors and private individual investors that are investing discretionary income. And Mary, I'm all in the same project. And nobody fights about, which is kind of. And so the thing I want to say here is I we did a big lot store up in Helena, Montana, put several IRA and 401k investors in it. And they can analyze the 1031. That's the body the real estate

 

44:20  
of IRA or 401k to

 

44:23  
buy any interest in the LLC, that owns the real estate asset. And the other one we did that has several IRA and 401k. Investors is project we did Woods cross another one we did in West Jordan, we're doing, we're doing another

 

44:41  
one in,

 

44:43  
in Mesa, Arizona. So we're just growing as part of our brand, which we're excited about. But that's kind of is a presentation.

 

44:57  
Any other questions we have answered?

 

45:02  
What do you think? Is this? Did you learn anything new?

 

45:10  
why don't why? Why don't I end with what I do with my accounts, which is a little bit more, it's probably the most sophisticated approach you can take. And you really shouldn't be doing this. Unless you've had a lot of experience at this. I formed an LLC, both my wife and I have IRAs, Roth IRAs. And

 

45:36  
years ago, I converted my traditional IRA to a Roth IRA paid the taxes on it, and said, I'm done with that program.

 

45:46  
And so we both have a Roth IRA age, we both have Roth 401k accounts.

 

45:54  
Every year we contribute the maximum the balls.

 

45:58  
Once I got a certain amount of money pool together, I took those four accounts, created an LLC, they each buy an ownership interest in that LLC. And so they

 

46:15  
like to start it's not the, they call them units and an LLC, called shares. But they each bought units in that LLC. So the money came into the LLC, and I'm the manager of the LLC.

 

46:33  
So I don't have to go through my self directed third party administrator, when I want to write a check on that account, or pay a bill out of that account. I handled and control that LLC that has

 

46:51  
all of the money.

 

46:53  
And I can't since it, since it it would be self deeming for me to buy an Android, there's my own project that I that I am personally guaranteed a webinar on.

 

47:08  
I take that pool of money, and I lend it to others. And I am earning two points and 12% on the investments that I put out, and it's mainly guys that want to do fix and flips, people that I'm familiar with and know how to work with. But I take, we take a deed of trust, and they sign a promissory note, I am generally earning about 50 every account the points that I take the interest rate, I'm earning about 15% on that account. So it's doubling. So. So that's what I'm doing with my IRA and 401k. If I could invest it, which I would love to do, if I could invest in my own personal accounts, I would rather get it in there. Because I can earn almost double what I could get outside of that with investments. I most of our investments are clicking off about 20 to 25%. And so I would much rather have it in one of my personal accounts to do that. So I invest a lot of discretionary income and personal real estate investments. But I don't know that it's helpful. That Yes,

 

48:32  
so once they buy shares in this house,

 

48:36  
the following

 

48:39  
that you'd have

 

48:40  
to contribute on the same percentage is every one of the accounts that you put in there. That makes sense.

 

48:52  
It contributes

 

48:52  
to the Rob and the Roth would buy more shares.

 

48:58  
Well, thank

 

48:58  
you so much, Lord, question, Where

 

49:02  
did you get started?

 

49:06  
Well, I'm LDS so I won't say that I was drinking one night.

 

49:16  
But I started thinking about all this. And,

 

49:19  
and the IB. One of the first projects I did

 

49:26  
was

 

49:28  
we had an opportunity. We have a construction company, we had an opportunity to build a Family Dollar Store in third mom looks while me

 

49:39  
if none of you have been through my illness, it's pretty fun.

 

49:44  
But and I thought how do I raise

 

49:49  
the $250,000 I have to raise on this little store for the equity capital I have had. I have a lender lined up.

 

50:00  
And john Delaney with out west IRA said, Come on up to Boise give a little presentation to our group. And we went up there gave a presentation on what we were doing, and walked out of there with the project fully funded.

 

50:20  
And I thought hot dog. I didn't even know I'm a real estate guy. And I didn't know any of this was going on. And so that's when I started learning and there wasn't at that time, there was anybody that was teaching me stuff. So I thought I've got to teach real estate guys how to do this. And that was the formation of Daria, it started there and it grew from that point. So it's kind of cool. And that's how I got started and, and been doing it ever since

 

50:50  
now. We raised several million dollars through that platform.

 

50:53  
Thanks, everybody.

– Fourplex Investment Group –

IREI SUMMIT 2019