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Investing in Real Estate with your IRA

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New Direction IRA

on 26 January 2015

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Transcript of Investing in Real Estate with your IRA

New Direction IRA does not provide investment advice or endorse any products. We are not the agent for any investment provider nor investment.
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.
Provides self directed IRA administration services.
Allows any investment allowed by law.
Promotes Educational Model.
Maintains strong client relationship and service.
What is a "Self Directed" IRA?
A descriptive term
Not a legal distinction
Make sure to select an IRA provider that offers the asset types in which you want to invest.
Tax-deferred Plans Eligible for Self-Direction
Simplified Employee Pension (SEP)
Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)
401k Plan
Health Savings Account (HSA)
The IRS Does Not Endorse or Approve Investments...
Statutorily Disallowed Assets
any work of art,
any rug or antique,
any stamp or coin*,
any alcoholic beverage, or
any other tangible personal property specified by the Secretary for purposes of this subsection.
Possible IRA Investments
IRS.gov Addresses Real Estate
*Exception US Government Minted Gold or Silver Eagle, Gold and Palladium Bullion
Life Insurance
True Investment Diversity with New Direction IRA
Real Estate
Private Lending
Precious Metals
Your Expertise
Private Equity
Brokerage Account
"...IRA law does not prohibit investing in real estate,...
...but trustees are not required to offer real estate as an option."
It's my IRA but...
An IRA is its own legal entity. It is separate from the IRA holder's personal finances.
The IRA administrator is the signer for an IRA. The IRA holder can't sign for their IRA.
Think of Your IRA as Uncle IRA
Invest For
Uncle IRA

You Reach
Years Old
Uncle IRA
Gives you
Money Back
You give
Uncle IRA
No immediate benefit for the IRA holder
No Self-Dealing
No transactions between you or other disqualified persons and your IRA
You & Disqualified Persons
Uncle IRA
A personal benefit derived from your plan that does not come to you as a distribution is not permitted.
No Self-Dealing
Disqualified Persons
Disqualified Persons
OWNERSHIP usually means owning 50% or more, but in some cases, it could be less
CONTROL usually means a financial decision maker, highly compensated individual, involved in high level entity decisions.
Not just personal finances, but any entity that they own or control:
What is a 'prohibited transaction'?
3 Primary IRS Guidelines
*and certain family members and business partners known as disqualified persons
Proper Titling
Earnest money must be paid from the IRA or by a non-disqualified person.
Both the offer and the closing documents are titled in the name of the IRA:
New Direction IRA, Inc FBO Client Name, IRA
New Direction IRA, Inc FBO Account No. 12345678
New Direction IRA, Inc FBO Client Name, IRA Account No. 12345678
The IRA pays all the expenses...
...and gets all the income.
Your IRA
Uncle IRA Can Purchase an Investment By Himself.
Uncle IRA May Co-Invest with Other Investors.
Partnering with Other IRAs is Acceptable.
Uncle IRA May Partner with You and/or Your Family*
*Under specific circumstances
Debt is allowed in IRAs but the rules are not widely known.
Not all lenders lend to IRAs
No personal guarantees
Must be Non-Recourse
UBIT may apply
The IRA - A Closer Look
3 IRAs, all with the same net value.
RE IRA with leverage
Ways for an IRA to participate in Real Estate
Real Estate Auctions
Send Funds Prior to auction
Real Estate Investment Choices
Fix and Hold
Fix and Flip or Redevelop
Hold for appreciation
Short Sales, Foreclosures
Real Estate Investment Choices
Single family and multi-unit homes
Commercial property
Non-Disqualified Person
Not all auctions are set up for IRA purchasing due to timing
Real Estate Investment Choices
Improved or unimproved land
Mortgages, Lease/Options
Foreign property investments
Trust deeds
Leveraged and un-leveraged property
Investment Timetable
What Does it Cost?
*Value based fee option also available. Visit www.NewDirectionIRA.com for a full list
Key Points
Introduction to Real Estate IRA Investing
Pay Expenses Online at myDirection
Comprehensive accounting and property management system
Free of charge
Easily manage multiple properties and expenses
Rent & Note Payments to Your IRA Can Be Made Online
Tenants and borrowers have the option to make payments via eCheck (ACH)
Payments are processed same day
Full transcript