Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

VIP Services

393 views

Published on

  • Be the first to comment

  • Be the first to like this

VIP Services

  1. 1. Disclaimer Quest IRA, Inc. does not provide tax, legal or investment advice or endorse any products, services or investments of any type 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.
  2. 2. Being a real estate investor means understand the use of money
  3. 3. Money means different things to different people in different stages of life.
  4. 4. In order to understand money we have to understand peoples needs, and match the needs with the proper tools.
  5. 5. Eats is the main bucket. The one we all know. This is the most expensive use of money.
  6. 6. Other uses of money
  7. 7. You need to match the need of money to the proper tool that allows maximum use of the money.
  8. 8. What is a “Self-Directed” IRA? An IRA in which the IRA owner directs all investments in the account. There is no legal distinction between a “selfdirected IRA” and any other IRA except with a truly selfdirected IRA the account agreement allows the broadest possible spectrum of investments.
  9. 9. What are the benefits of self-direction? Diversification
  10. 10. What are the benefits of self-direction? IRA Investor IRS
  11. 11. What are the benefits of self-direction? Social investing!
  12. 12. What are the benefits of self-direction? Take control of your retirement and invest in what you know best!
  13. 13. Types of Plans • Traditional IRA – (including rollovers) • Roth IRA
  14. 14. Types of Plans Employer plans: • SEP IRA • SIMPLE IRA • Individual 401(k) • Roth 401(k)
  15. 15. Types of Plans Special plans: • Coverdell Education Savings Account (ESA) • Health Savings Accounts (HSA)
  16. 16. What types of plans can be self-directed? ALL of the above accounts can be self-directed!
  17. 17. Restrictions on IRAs People Restrictions Transaction Restrictions Investment Restrictions
  18. 18. People Restrictions on IRAs Disqualified Persons = Those persons who cannot benefit from or enter into transactions with your IRA or other plan.
  19. 19. People Restrictions on IRAs You Mr. Ira Think of your IRA as Mr. Ira
  20. 20. People Restrictions on IRAs NO You NO Mr. Ira Disqualified persons may not enter into transactions with Mr. Ira
  21. 21. People Restrictions on IRAs Mr. Ira Fiduciary Disqualified Persons
  22. 22. IRA Fiduciary “F” (includes IRA Owner) Member of F’s Family Corporation “C” if F owns (directly or indirectly) 50% or more of vote or value of stock F’s Spouse Officer or Director of C F’s Ancestor F’s Lineal Descendant “LD” 10% or more partner or joint venturer with C LD’s Spouse Highly Compensated Employee of C (10% or more of wages) 10% or more shareholder of C Partnership “P” if F owns (directly or indirectly) 50% or more of capital or profits interest in P 10% or more partner or joint venturer with P Person with management or administrative functions of P Highly Compensated Employee of P (10% or more of wages) 10% or more partner of P Trust or Estate “T” if F owns (directly or indirectly) 50% or more of Beneficial interest in T 10% or more partner or joint venturer with T Trustee of T Highly Compensated Employee of T (10% or more of wages) 10% or more beneficial interest owner of T
  23. 23. Prohibited Transaction Restrictions Any direct or indirect Sale, exchange, or lease
  24. 24. Prohibited Transaction Restrictions Any direct or indirect Lending Money
  25. 25. Prohibited Transaction Restrictions Any direct or indirect Goods, Services, or Facilities
  26. 26. Investment Restrictions Life Insurance Contracts
  27. 27. Investment Restrictions Collectibles
  28. 28. Investment Restrictions Collectibles are defined as: • Any work of art; • Any rug or antique; • Any metal or gem; • Any stamp or coin; • Any alcoholic beverage. An exception exists for certain U.S. minted gold, silver and platinum coins, coins issued by U.S. states, and gold, silver, platinum or palladium bullion.
  29. 29. What can I invest in with my IRA?
  30. 30. What investments are you knowledgeable about? You can buy that in your IRA!
  31. 31. Investment Choices • • • • • • • • • • Single family and multi-unit homes Apartments Condominiums Commercial property Unimproved land Foreclosures Limited liability companies Limited partnerships Unsecured/secured loans Joint ventures
  32. 32. Investment Choices • • • • • Foreign property investments Deeds of trust and mortgages Tax liens Options Debt Financed Property • Must be a non-recourse loan • Will generate taxes payable on the profit from the IRA to the extent that the property is debt leveraged.
  33. 33. If you are a investor you should have an IRA so you can talk about it
  34. 34. Steps to Purchasing Real Estate Assets in a Retirement Plan 1. Open a self-directed IRA 2. Contribute or move funds into the self-directed IRA 3. Locate an investment 4. Complete the proper documentation to purchase the asset (Buy Direction Letter, Private Placement Instructions, Note, etc…) 5. “Read and Approve” all the documents prior to closing
  35. 35. Steps to Purchasing Real Estate Assets in a Retirement Plan 6. After your approval of all documents, Quest signs the closing documents and funds your transaction 7. Asset is recorded in the name of your IRA, for example: Quest IRA, Inc. FBO John Smith IRA #12345-11 8. All expenses come from your IRA and all income stays in your IRA
  36. 36. Case Study: Rental Property John Wood and his associate Jay Wright want to purchase an office condo for $250,000 within their SEP IRAs. 1. They each transfer $150,000 from their IRA brokerage accounts to their Quest SEP IRAs to purchase the property.
  37. 37. Case Study: Rental Property 2. John and Jay make an offer to purchase the office condo in the name of their SEP IRAs, as follows: Quest IRA, Inc. FBO John Wood SEP IRA account #12345-31 and Quest IRA Inc. FBO Jay Wright SEP IRA account # 23456-31. 3. John and Jay each complete a Buy Direction Letter (Real Estate). They send the Buy Direction Letters and the contract which has been “read and approved” by them to Quest.
  38. 38. Case Study: Rental Property 4. Quest signs the contract and sends it to the title company along with an earnest money deposit of $10,000 ($5,000 from each account). 5. At closing, John & Jay review and approve all closing documents, then the title company sends them to Quest for signature. 6. Quest signs the closing documents and wires the SEP IRA funds to the title company to close (1/2 from each account).
  39. 39. Case Study: Rental Property 7. The title company records the deed and the 2 IRAs are now the owner of record, as follows: Quest IRA, Inc. FBO John Wood SEP IRA account # 12345-31 (as to an undivided 50% interest) and Quest IRA, Inc. FBO Jay Wright SEP IRA account #23456-31 (as to an undivided 50% interest)
  40. 40. Case Study: Rental Property John hires a property management company to oversee the unit. 1. The property management company finds a tenant to lease the unit. 2. Rents and expenses are handled by the property manager. 3. Office condo has a positive monthly cash flow of $850 ($425 for each SEP IRA) which is tax deferred.
  41. 41. Case Study: Rental Property 4. The property management company submits the net rent proceeds to Quest for the benefit of John and Jay’s SEP IRAs. 5. John & Jay track their accounts via their online statements.
  42. 42. Case Study: Rental Property Two years later, tenant offers to purchase the property for $395,000. 1. A sales contract is prepared for $395,000 and submitted to Quest for signature after having been “read and approved” by John and Jay, along with a Sell Direction Letter (Real Estate). 2. On day of closing, John and Jay review and approve all closing documents. Quest then signs the documents and returns them to the title company. Proceeds, after closing costs, are wired back into their SEP IRA accounts.
  43. 43. Case Study: Rental Property Realized Return for each SEP IRA Initial investment $125,000 Cash flow over 26 months ($425 x 26) $ 11,050 Gains from Sale ($187,500* - $125,000) $ 62,500 Proceeds to each SEP IRA after sale $198,550 * Net proceeds after closing costs Tax deferred gain of $73,550 (59%) over 26 months!
  44. 44. Case Study: Rental Property Key Points to Remember • John and Jay’s IRAs pay no taxes on the gains. They can reinvest the full amount of their profits on the next deal, free of taxes. • If the accounts involved were Roth IRAs, Roth 401(k)s, or in some cases a Coverdell ESA or an HSA, the gain is TAX FREE FORVER!
  45. 45. Case Study: Rental Property Key Points to Remember • John and Jay are in total control of the process from beginning to end, but Quest is the actual buyer and seller of the property. • John and Jay did not take money from their IRAs to buy property and put the money back into their IRAs – the IRAs simply bought an asset and later sold it at a profit.
  46. 46. Case Study: Rental Property Key Points to Remember • IRAs can partner with other IRAs or even non-IRA money. • All expenses and proceeds must be split in accordance with their ownership percentages. • John and Jay could have had the checks deposited directly into their IRAs instead of hiring a property management company.
  47. 47. Ways to profit NOW O.P.I. OTHER PEOPLE’S IRAs
  48. 48. Borrower’s Perspective: Making Money NOW Create your own private financing source
  49. 49. Borrower’s Perspective: Making Money NOW There are TRILLIONS of dollars in retirement accounts!
  50. 50. Borrower’s Perspective: Making Money NOW At every gathering there are MILLIONS of dollars available for investment.
  51. 51. Borrower’s Perspective: Making Money NOW “Let me help you recover your stock market losses with loans secured by real estate.”
  52. 52. Borrower’s Perspective: Making Money NOW Emphasize that as a real estate investor you are helping the economy recover by improving property values and that their investment is a socially responsible one.
  53. 53. Borrower’s Perspective: Making Money NOW Provide the prospective lender with the details of the transaction, including your price and comparable sales to show value.
  54. 54. Borrower’s Perspective: Making Money NOW Have a “success book” available!
  55. 55. Ways to profit NOW Partnering
  56. 56. Ways to profit NOW Sales
  57. 57. Ways to profit NOW Investment Capital
  58. 58. Spread the knowledge, then use their money!
  59. 59. The big problem when starting
  60. 60. Special offer! VIP program 1) Real Estate • Check vesting on sales contract • Makes changes to sales contract – correct vesting and address • Contact title company to introduce our selves • Contact title company to get information on closing make ourselves the point of contact • Help client review the title commitment • Help client review the closing documents. • We make sure the closing documents are correct before we send them to the client. • Fill out the Direction of investment for them • We tell them where to sign read and approve. If they don’t want to write read and approve, we stamp it and create a line for them to sign • We email the FED REF# to the title company as soon as we have it so they can track the wire info • Be in contact with the client’s RE Agent for communication purposes • Execute and overnight the original closing documents prior to closing • Follow up with the Title Co./Attorney’s Office to make sure the recorded Deed is mailed back to Quest
  61. 61. Special offer! VIP program 2) HUD Real Estate • • • • We do all of the above for Real Estate plus Get on the phone with client/ realtor to make sure offer is placed correctly on HUD website We contact HUD immediately after offer is accepted to make sure everything is correct and where we need to send contract and earnest money We spend more time with HUD clients to make sure nothing is dropped because we know how easy it is to lose a deal because of HUD 3) Notes • • • • • • • • Fill out the Direction of investment for them if they need help We review the promissory note to make sure vesting, maturity date and interest rate all match to the direction of investment. We review the deed of trust note to make sure vesting, maturity date, interest rate all match to the direction of investment We make sure the property matches the direction of investment We contact the title company to make sure they have the docs and if they have any questions We help the client review the HUD and make sure our fees are on there We email the FED REF# to the client/title company/ borrower as soon as we have it so they can track the wire We follow up with the Title Co./Attorney’s Office to make sure the original Note and recorded Deed of Trust is mailed back to Quest
  62. 62. Special offer! VIP program 4) Private Entities • Fill out the Direction of Investment for them if they need help • We review the Operating agreement to make sure they are no disqualified individuals to the IRA. • We review the subscription agreement and check for vesting, managing members, address, tax identification number • We try to help out with the questionnaire but of course, we can’t provide tax, legal, investment advice. • We contact the company they are investing in to introduce and see if they have any questions • We email the FED REF# to the company as soon as we have it so they can track the wire • We mail the signed original agreement to the company along with the private placement instruction letter via USPS the same day we fund the investment
  63. 63. How can I get more information? For More Information: www.QuestIRA.com 800-320-5950 Nathan@QuestIRA.com

×