investing your ira when your income is high but your balance is low

Download Investing Your IRA When Your Income is High but Your Balance is Low

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You've been hearing a lot about about self-directed IRA s and real estate. You're intrigued. You can think of all kinds of real estate investments you'd use your self-directed IRA for. The only catch? You don't have much money in your IRA yet. Most IRA investors pay all cash for a property or they have to borrow 50-65% of the purchase price at rates 3-4% higher than conventional interest rates. Paying high interest rates inside your IRA can potentially erode your cash flow and decimate your returns. So, what do you do while you're building up a balance inside your IRA? How can you take advantage of today's amazing real estate market if you don't have the resources inside your IRA to make a 35-50% down payment or pay all cash for a property? Watch this 60 minute training video and find out! Kaaren Hall president of uDirect IRA Services www.uDirectIRA.com and professional investor David Campbell www.HasslefreeCashflowInvesting.com will show high income earners how to use a self-directed IRA to create amazing real estate profits -- even starting with a small balance. In this 60 minute FREE webinar you'll learn: 1) how to make IRA profits as a high income earner starting with a relatively small self-directed IRA 2) deferred down payment strategies used by savvy IRA investors to double their returns and lower their risk 3) how to buy a $1,000,000 property inside your IRA with as little as $10,000 down 4) the benefits and pitfalls of owning and financing "low money down properties" inside your IRA 5) when your IRA should own positive cash flow properties and when positive cash flow sucks 6) how easy it is to use a self-directed IRA to maximize your profits while minimizing your tax bill 7) where to find non-recourse IRA financing at low interest rates

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  • 1.www.HasslefreeCashflowInvesting.com Investing Your Self-Directed IRAWhen Your Income is High but Your Balance is LowFourth Dimension Real Estate, Inc.David Campbell - CEOwww.HassleFreeCashflowInvesting.comuDirect IRA Services Kaaren Hall - Presidentwww.uDirectIRA.com

2. www.HasslefreeCashflowInvesting.comDavid Campbell - FounderHassle-Free Cashflow InvestingFormer high school band director Self-made multi-millionaireReal Estate investor / developer / broker+$800 million in transactional experienceFinancial educator / author / speakerHouses, condo-conversion, multi-family, winery, resort, office, retail,medical office, production home buildingFaculty Member: Investor Summit at Sea with Robert KiyosakiRegular Contributor to the Real Estate Guys Radio Show 3. www.HasslefreeCashflowInvesting.comCompelling WHYHusband FatherMusician 4. www.HasslefreeCashflowInvesting.comTodays agendawhen your IRA should own positive cash flow properties andwhen positive cash flow sucks IRA profits as a high income earner starting with a relativelysmall self-directed IRAdeferred down payment strategiesthe benefits and pitfalls of owning and financing low moneydown properties inside your IRAhow easy it is to use a self-directed IRA to maximize yourprofits while minimizing your tax billwhere to find non-recourse IRA financing at low interest rates 5. Kaaren Hall, President uDirect IRA Services, LLC (866) 538-3539 KHall@uDirectIRA.comuDirect IRA Services, LLC2522 Chambers Road, Ste 100Tustin, CA 92780 6. Stay to the end for a FREE report Using a Solo 401k to avoid UDFI 7. Begin with end in mindRELATIONSHIPSIDEASOPPORTUNITIESNOT a sales pitchNOT investment, legal, or tax advice 8. STRESS iswhen your expectationsdont match your reality 9. Stress / distress is not created by a property;it is created by an owners relationship to a property. -David Campbell 10. DO YOU HAVE MISMATCHED?expectationsresourcesteam philosophyemotional staminatime horizonstrategy tactics 11. Essential Resources cash Typical IRA cashflow credit THIS IS WHERE equityTHE PROFITS ARE timeand why we self-direct talent strategic relationships control of an opportunity 12. www.HasslefreeCashflowInvesting.com Main Stream Sources of Passive Incomeare Not an Option Bonds and CDs do not outpace inflation Stock market risky & unpredictable (ERISA withdrawal/ manipulated) High risk of hyper-inflation 13. Cashflow in your IRA? 14. Cashflow in your IRA? IRA CASHFLOW SUCKS Higher cashflow = lower ROI Investing transaction expenses IRA transaction expenses Decision making / time cost Your contributions = cashflow 15. Cashflow in your IRA?IRA CASHFLOW ROCKSgreat for distribution erabetter than bonds / CDsbalancing a negative cashflowordinary income tax deferral 16. Cashflow in your IRA? CashflowDoes NOTnecessarilycorrespond with RISK 17. Deferred Down Payment When you dont have a down payment When you dont need cashflow but the seller does When the leverage enhances your returns 18. CAP > interest rate $100,000 price $7,000 NOI 7 CAP $100,000 debt at 5% = $5k $7k income = $2,000 profit 19. Small IRA? 20. Small IRA?Group investmentsPartnershipsLeverage future contributionsHigh LTV financingDeferred downpayment 21. What about amortization? $100,000 debt at 5% = $5,000 interest $7,000 NOI - $5,000 interest = $2,000 PROFIT If amortization is less than $2,000 then positivecashflow If amortization is greater than $2,000 thennegative cashflow 22. What situation is appropriate FOR YOU? There is no such thing as agood property or badproperty / investment There is only appropriateand inappropriate ownershipand timing. 23. Pitfalls of low money down inside your IRA Increased probability of cash call Inability to meet cash call = LOSS Unrelated Debt-Financed Income Tax Maximum contribution limits Inability to deduct losses in current year Less benefit from high depreciation 24. Non-recourse = higher ratesGetting non-recourse debt at low ratesIRA debt needs to be non-recourse TO YOUInvestment partners Group investmentsSeller financingInstallment sale Investment gradetenants Blended interest rates 25. How to Self-Direct Your Retirement SavingsuDirect IRA Services, LLC is not a fiduciary and does not render tax, legal,accounting, investment, or other professional advice. If tax, legal, accounting,investment, or other similar expert assistance is required, the services of acompetent professional should be sought. 26. Self-DirectionWhy Havent I Heard About This?Few attorneys are knowledgeable About self-directed plansFew CPAs are knowledgeable About self-directed plansIRS rules have allowed self-direction since IRAs were created in mid-1970s 27. Whats the Difference? Typical IRA Self-Directed IRA Stocks Rental Property Bonds Notes Mutual Funds Private Stock CDs LLCs Tax Liens Foreign Property Raw Land Etc. 28. What About Losses? Losses Cannot be written off taxes Cannot be replaced in the retirement plan 29. What Are The Limits? A Self-Directed IRA can invest in anything EXCEPT1. Life Insurance Policies2. Collectibles 1. Artworks 2. Coins 3. Collectible Cars 4. Antiques 5. Gems 6. Stamps 7. Rugs 30. What if your funds are with your current employer?Your plan will probably NOT allow you to self-directMust wait until you leave the company To rollover retirement plan You can request an in-service transfer from your current plan administrator. 31. Prohibited Transactions(IRS Publication 590) Borrowing money from the IRA Selling property to it. Using it as security for a loan. Buying property for personal use (present or future) with IRA funds. 32. Disqualified Person Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant). 33. Qualified PersonsAunts & UnclesCousinsBrothers & SistersUnrelated friendsNieces & Nephews 34. Prohibited TransactionsNeither you nor any disqualified people may benefit from IRACannot buy, sell or exchange property between plan and Self or Disqualified peopleCannot provide goods, services or facilities 35. Self-Directed IRA - Structure You Your IRA TPA Custodian 36. Buying Real Estate With Your IRA Pros1. Capital gains are tax free2. Positive cash flow is tax free3. No time limit for holding property4. IRA can borrow money Leverage your investment5. Potential to earn a larger rate of return on invested capital 37. Buying Real Estate With Your IRA Cons1. No tax advantages of owning real estate2. No deduction for capital losses3. You are solely responsible for all gains or losses4. You cannot replace losses 38. Your IRA Can Take A Loan!Loan must be non-recourse Upon default, lender can seize subject property onlyUpon default, lender cannot Seize other IRA plan assets Seize your personal assets 39. Non-Recourse LoansFew lenders to choose from Must be a portfolio loan Cannot be sold on the secondary marketLarger down payment required 40% to 45%Cannot personally guarantee the loan 40. Personal Guarantees Personal guarantees by the IRA owner not permitted Can be personally guaranteed by a third party Must not be a disqualified person Disqualified people are Ascendants Descendants Spouse and self And others 41. UDFIUnrelated Debt Financed Income taxAny property held to produce income is debt- financed property if at any time during the tax year there was acquisition indebtedness outstanding for the property. 42. UBITUnrelated Business Income TaxIf a tax exempt entity engages in a business that is unrelated to its primary purpose, any income derived from such business will be subject to UBITIRS Pub 598UDFI & UBIT are reported on form 990-T 43. Buying Real Estate - The Process Open a self-directed account Shop for a property Remember, its the IRA that is the buyer Custodian to sign Offer to Purchase Submit a Buy Direction Letter for earnest moneydeposit Funds wired to closing from your IRA Fund & Record Rents are made payable to your IRA 44. What if the IRA depletes itsreserves?1. Make your yearly contribution2. Liquidate other assets in the IRA3. Transfer money from other retirement accounts4. Bring on a partner Not a disqualified person5. IRA can get a loan6. Sell the asset 45. IRA-Owned LLCCheckbook IRAIRA purchases shares of a newly-formed LLC formed for this purposeLLC receives funds in its checking accountLLC follows same rules as IRA for investing 46. 3 Types of Plans IRAs Individual Retirement Accounts What you are doing for your own retirement Qualified Plans ERISA controlled Typically, what an employer provides you Other Plans Education Health 47. Types Of Self-Directed PlansIRAs Qualified PlansOther Plans Traditional 401K/ 457/ 403b Coverdell Health SavingsRoth Defined BenefitAccountSEP Profit Sharing SimpleIndividual KSpousal 48. How Do I Self-Direct?1. Complete an application 1. Provide copy of drivers license 2. Copy of statement2. Fund your account 1. Annual Contribution 2. Transfer 3. Rollover3. Tell us what you want to invest in 49. www.HasslefreeCashflowInvesting.com Questions / Counseling David@HasslefreeCashflowInvesting.comwww.HasslefreeCashflowInvesting.com KHall@uDirectIRA.comwww.uDirectIRA.com