Got Choices?Got Choices?DiscoveringDiscovering The Alternatives Within The Alternatives Within Your Retirement PlanYour Retirement Plan

Entrust Leads the FieldEntrust Leads the Field

• 26 years of continuing service

• Nearly $3 billion in investor assets

• Over 25 Offices Nationwide

• Local offices in Orlando, Jacksonville and Boca Raton

• All transactions processed locally

• Hundreds of CE and educational events annually

• Un-invested funds are FDIC insured to $250,000

Entrust Lets You Make Your Own DecisionsEntrust Lets You Make Your Own Decisions

The Entrust Group, and its affiliates ("Entrust") do 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.

Our Mission: Choice + Tax Savings = WealthOur Mission: Choice + Tax Savings = Wealth

Arm the taxpayer with the full breadth of tax deferred investment choices,

Educate them so they may seize the best opportunities,

Simplify the administration process

To minimize taxes and increase personal wealth

The “Boomers” are Not SavingThe “Boomers” are Not Saving

Boomers have $35,000 in median total household personal retirement savings.

40% not willing to cut back spending to save for retirement

50% of workers draw out their 401K when they leave their employer

Those That Are Saving Have Limited ChoiceThose That Are Saving Have Limited Choice

The average employer 401K plan has less than eight investment choices

CHOICE

...And They are Investing without Knowledge...And They are Investing without Knowledge

“Less than one-fifth of investors surveyed are truly literate about financial matters specifically related to investing”

Investor Protection Trust Survey Conducted by Princeton Research Assoc.

The Result? Working RetireesThe Result? Working Retirees

69% of Boomers will rely on working at least part-time for income in retirement.

The Solution Has been available for 32 Years!

Traditional IRA

Roth IRA

Simple IRA

SEP IRA

Individual 401(k)

$5-6,000

$5-6,000

$10-12.5,000

$46,000

$46,000

No earning limit for contribution,Just deduction

AGI <$160,000

+ Employer Match up to 3%

25% of Earned income to maxAll pd by Employer

100% of earned incomeFor 1st $15,500-20,500 deferral,rest at 25% of earned income

ContributionLimits Rules

Tax Deferred Investing = Higher Returns

$200

$600

$400

$1,000

$800

$200

$600

$400

$1,000

$800

$200

$600

$400

$1,000

$800

2% Return 6% Return 10% Return

($ in 000,s)

Assumes that the savers start with $100,000 at age 40, add $4,000 per year, and stop contributing at 65 years old

IRA Saver non-IRA Saver

You Have an Amazing Menu of Investments

Real EstateTrust Deeds & Mortgage

NotesJoint VenturesTax Lien CertificatesUnsecured LoansTangible Asset DeedForeign SalesCorporation StockFactoringLeases

Building BondsCommercial PaperAccts. Receivable FundingAuto Paper FinancingLike and Unlike ExchangesU.S. Treasury Gold CoinsU.S. Treasury Silver CoinsU.S. Treasury Platinum CoinsGold, Silver, Platinum, or Palladium

Bullion

Diversity Lies in Multiple Investments

Large CapSmall CapGrowthBonds

Diversity within the Stock Mkt Self-Directed Diversity

Stock MktPrivate StockReal EstateMortgages

But My CPA Told Me………But My CPA Told Me………

The Facts: According to the IRSThe Facts: According to the IRS

“IRA law does not prohibit investing in real estate but trustees are not required

to offer real estate as an option”

http://www.irs.gov/retirement/article/0,,id=111413,00.html#invest

Collectibles & Life Insurance• any work of art,• any rug or antique,• any metal or gem,• any stamp or coin,• any alcoholic beverage

*Exception* • US Government Minted Gold Or Silver Eagle, Gold and palladium bullion

No to Investments in Life Insurance and No to Investments in Life Insurance and Collectables – Yes to Most Everything ElseCollectables – Yes to Most Everything Else

Prohibited Transactions: IRC Sec. 4975An IRA cannot engage in any transaction (direct or indirect) with anybody or anything considered related to the IRA

Some examples of prohibited transactions between a disqualified person and an IRA are:

• Selling, exchanging or leasing property • Lending money or extending credit • Furnishing goods, services or facilities

Two key points with IRAs and real estate:

NO self dealing and NO personal use!

Just Know Who Your IRA is Dealing WithJust Know Who Your IRA is Dealing With

Examples of Disqualified Persons:• You and your spouse• Lineal ascendants (and their spouses)• Lineal descendants (and their spouses)• Any fiduciary of IRA • Anyone providing services to your IRA• Corporations, partnerships, trusts, or estates in which you

own, directly or indirectly, at least 50%

Relationship of the Parties – The IRS CaresRelationship of the Parties – The IRS Cares

The Facts: Were you paying attention?The Facts: Were you paying attention?

• Your IRA loans you $100,000

• Your IRA loans your brother $100,000

• You buy a property with your IRA and your Mother’s IRA

• Your Mother’s IRA lends you the money to buy a house

• You remodel a kitchen for your IRA and your IRA pays you

• You remodel a kitchen for your IRA and your IRA doesn’t pay

Our Clients Invest in What They Know

41%

31%

15%

7%4% 2%

Real Estate

Notes

LLCs

PublicStock

PrivateStock

Case Study: Case Study: Undeveloped Land Undeveloped Land

Bill Smith wants to use his $50,000 Rollover IRA to purchase a $40,000 piece of undeveloped land.

Undeveloped LandUndeveloped Land

Bill initiates a contract to purchase in the name of his IRA,

Entrust FBO Bill Smith IRA #.

Bill submits the Buy Direction Letter & Contract to his local Entrust office.

Undeveloped LandUndeveloped Land

2

1 Bill locates the property.

3

Bill reviews and approves all closing documents.

Funds are wired from IRA to title company to close.

UUndeveloped Landndeveloped Land

6

5

4 Entrust coordinates the closing with title company. The asset is titled Entrust FBO Bill Smith IRA #.

*Note: All expenses are paid by the plan

Undeveloped LandUndeveloped Land

The IRA is now the Owner of Record on the

Warranty DeedEntrust FBO Bill Smith IRA #

Private Placements: How it WorksPrivate Placements: How it Works

1. Find the Opportunity2. Do Your Homework3. Read and Initial the Prospectus4. Request Entrust to Send Funds to Manager5. Stock is registered to Entrust FBO Client’s IRA6. Entrust Provides filings to the IRS

Start Up BanksNew BusinessesMuseums

Movie DealsVideo GamesRecycle/Energy

Land DevelopmentToilet TechnologyConsulting Business

Case Study: Case Study: MortgageMortgage

Jack Brown has $100,000 in a Rollover IRA and wants to loan it to an investor as a first mortgage on a $135,000 investment home.

• 75% LTV• 9.5% interest rate• Interest only payments with

balloon payment in 5 years• Both parties are happy

MortgageMortgage

Jack completes a Buy Direction Letter for the new Note.

Title company prepares note and closing docs showing the IRA

as the “Lender”.

Jack approves all closing documents and

Entrust wires funds to title company.

The mortgage is recorded and held by Entrust.

MortgageMortgage

1

2

3

4

Tax free monthly payments are made to Jack’s IRA

account in the amount of $790.

Entrust records monthly payment and Jack tracks his payments via his online statements.

In five years, the loan is repaid:

- $47,500 of interest payments have been

made and $100,000 loan returned to IRA.

*Note: Your IRA cannot loan to anyone who is a disqualified person.

MortgageMortgage

5

6

7

Case Study: Case Study: Real Estate With DebtReal Estate With Debt

Rental Real Estate: Seeking Cash FlowRental Real Estate: Seeking Cash Flow

Property: Duplex RentalPrice: $150,000Rental/Side: $850.00

Loan Amount: $90,000IRA Downpayment: $60,000

Loan Terms: Non-Recourse10 year Balloon @7.5%

Rental Real Estate: Seeking Cash FlowRental Real Estate: Seeking Cash Flow

  Monthly Yearly

Rental Income $1,700 $20,400 *

     

     

Expenses    

Mortgage $ 629 $ 7,551

Taxes   $ 2,500*

Insurance   $ 1,500*

Maintenance $ 125 $ 1,500*

     

Total Expenses   $ 13,051

     

Gross Income   $ 7,349

10 year income return

$95,302

* grow at 3% per year

Rental Real Estate: Seeking Cash FlowRental Real Estate: Seeking Cash Flow

Property Sale: $200,000Loan Balance: - $78,000

Sale Proceeds: $122,000 - $60,000 $62,000*

10 year Rental Proceeds $95,000*

$ 157,000*Pre UBIT Return

Unrelated Debt Financed Income (UDFI) is calculated on the Leveraged Portion of the gain, annually for the net rental receipts, as well as for the proceeds on sale. The IRA pays the Tax.

*

Self-Direction Summary – Are You Prepared?Self-Direction Summary – Are You Prepared?

• Un-invested funds are FDIC insured to ______• The percentage of Baby Boomers that will work during their

retirement years ____• What is the maximum contribution to an IRA? ______• What retirement plan permits the fastest deferral _____• What is the only type of real estate that cannot be owned in

an IRA ______• What are the top three investments in a Self-Directed IRA?

_______ ________ ________• Who is best suited for a self-directed IRA? _____________

The Next Step!!The Next Step!!

How to learn more about investment options:1. Real Estate

1. Brokers, Realtors, Developers

2. Local Real Estate Investment Clubs

2. Private placement opportunities:

1. Venture Capital Associations

2. Attorneys and CPAs

3. Loan and note opportunities:

1. Hard money lenders

2. Mortgage brokers

3. Business Publications

1) Fill out the application1) Fill out the application

2) Select Method to Fund2) Select Method to Fund

3) Start Investing3) Start Investing

Three Steps to Go!Three Steps to Go!

THANK YOU!

Please fill out the feedback form.

Entrust Administration Entrust Administration Services, Inc.Services, Inc.

(407) 367-3472(407) 367-3472

www.Entrustfl.comwww.Entrustfl.com

Glen Mather, PresidentGlen Mather, PresidentJason DeBono, Business DevelopmentJason DeBono, Business DevelopmentPaul Hugens, Business DevelopmentPaul Hugens, Business Development