The document discusses using self-directed retirement accounts like IRAs to invest in real estate. It provides examples of clients who have used strategies like SD IRAs, special purchase LLCs, and Solo(k)s to purchase real estate investments and leverage their retirement funds. The key takeaways are that self-directed retirement accounts provide more investment options and flexibility than traditional retirement accounts, and allow using retirement funds to invest in real estate and other alternative assets.

1. the power of
REAL ESTATE
inside your
RETIREMENT ACCOUNT

2. Proprietary & Confidential, Property of Freedom Growth
who we are
Self Directed IRA Real Estate
Consultants Investment Advisors

3. Proprietary & Confidential, Property of Freedom Growth
what we do
Self Directed IRA

4. Proprietary & Confidential, Property of Freedom Growth
agenda
Intro to self-directed retirement accounts
Actual Client Case Studies
Final Exam

5. Section 1
Introduction to Self-Directed
Retirement Accounts
Text “Freedom” to 24587

6. Proprietary & Confidential, Property of Freedom Growth
investment restrictions
Prohibited Assets
Collectibles
Life Insurance
Art
S Corps

7. Proprietary & Confidential, Property of Freedom Growth
disqualified persons
Certain family members cannot do business with your IRA
• YOU!
• Your Spouse
• Your Parents
• Your Grandparents
• Your Children
• Your Grandchildren
• Spouses of Lineal
IRA Descendants
• IRA Fiduciary

8. Proprietary & Confidential, Property of Freedom Growth
what can go into an ira
Cash Stocks
Real Estate Mutual Funds
Precious Metals
Superbowl Tix IRA =Special Safe
Private Biz Bonds Foreign Currency

9. takeaway #1
Self-Directed
=
Unrestricted

10. Proprietary & Confidential, Property of Freedom Growth
types of retirement accounts
Traditional IRA..................................................... YES
Roth IRA............................................................... YES
SEP or SIMPLE IRA............................................... YES
401(k).................................................................. MAYBE
Pension Plan......................................................... MAYBE
Individual 401(k) or Solo(k).............................. YES
529 College Plan................................................. NO
Educational Savings Account or ESA.............. YES
Flexible Spending Account or FSA................. NO
Health Savings Account or HSA...................... YES

11. Proprietary & Confidential, Property of Freedom Growth
3 step process
1. Open Account
2. Fund IRA
3. Invest

12. takeaway #2
#1 Set up SD IRA
#2 Find an Investment

13. Proprietary & Confidential, Property of Freedom Growth
the players
CUSTODIANS PROFESSIONALS INVESTMENTS

14. Section 2
Case Studies
Jim - SD IRA
Barbara and William - SP LLC
Gabby and Michael - Solo(k)
Text “Freedom” to 24587

15. Proprietary & Confidential, Property of Freedom Growth
case study #1
Jim - Medical Professional
Age 47
$85K in previous 401(k) plan
Looking for cash flow and growth
Wants to be moderately passive
Willing to leverage

16. takeaway #3
Start by Saving
YOU CAN’T INVEST
MONEY YOU DON’T HAVE

17. Proprietary & Confidential, Property of Freedom Growth
how it works
Rental House
$36,000
Self Directed
IRA Custodian
Traditional IRA
Trust Deed
$200,000 $85,000
-$85,000 -$80,000 $11,000
$115,000 $5,000
Note
$33,000

18. Proprietary & Confidential, Property of Freedom Growth
taking title in an ira
Self Directed
IRA Custodian
Owner Investment
Another Party in Escrow
IRA takes title
“IRA Custodian Name FBO Client Name #XXXXXX”
IRA “owns” property
Client can manage the investment

19. Proprietary & Confidential, Property of Freedom Growth
taxes on iras
Unrelated Business Income Tax - UBIT
Tax on non-taxable entities that make profit unrelated to their
“purpose”
Applies to fix-and-flippers using retirement accounts
Needs to be a hobby, not a business
Unrelated Debt Financed Income - UDFI
Tax on leveraged profits for a non-taxable entity
Profit taxed based on % leveraged
•A 40% loan will require that 40% of profits are taxed

20. Proprietary & Confidential, Property of Freedom Growth
case study #1

21. Proprietary & Confidential, Property of Freedom Growth
sd ira real estate - pop quiz
Owning real estate inside of your IRA doesn’t make sense
if there are no tax breaks, right?
No
If I buy the property in Mammoth, can I use it for one
week a year?
No
Can I rent it to my son if he pays full market rent?
No

22. Proprietary & Confidential, Property of Freedom Growth
sd ira real estate - pop quiz
Do I have to hire a property manager if I want to hold real
estate in my IRA?
No
Can I get a loan to create leverage?
Yes
Is it possible to avoid or minimize UDFI if I take a loan?
Yes

23. Proprietary & Confidential, Property of Freedom Growth
case study #2
Barbara - Nurse, William - Auto Professional
Age 65 & 67
Recently retired
Barbara from large hospital group
William from auto dealership
Barbara, pension vs. lump sum distribution
Looking for cash flow and capital preservation
Utilizing cash flow for living expenses
Want to be completely passive

24. Proprietary & Confidential, Property of Freedom Growth
setting up a special purchase LLC
Both opened a SD IRA
Attorney created LLC Husband
LLC has separate bank account
Make investments via LLC SP LLC
Check writing capabilities
• Checkbook IRA or Real Estate IRA
IRA owner is Manager
Wife

25. Proprietary & Confidential, Property of Freedom Growth
checkbook ira investing
Note
$42,000
SP LLC
Special Purpose LLC Note Fund
Pension Plan
$25,000
$350,000 $250,000
-$350,000 -$245,000
$0 $3,000 MHP Fund
$50,000
Self-Directed IRA Fund Flip
$75,000
$350,000
-$250,000
$100,000
TD Fund
$50,000

26. Proprietary & Confidential, Property of Freedom Growth
flip renovations

27. takeaway #4
No sweat equity is allowed
The IRS Prohibits
Non-Cash Contributions

28. Proprietary & Confidential, Property of Freedom Growth
case study #2

29. Proprietary & Confidential, Property of Freedom Growth
sd ira real estate deal- pop quiz
If I’m a real estate agent, can I take a commission on the
purchase or sale?
No
It’s OK if I do some of the work, right?
No
My brother is a contractor. Can I hire him to do the work?
Yes

30. Proprietary & Confidential, Property of Freedom Growth
sd ira real estate deal- pop quiz
If I hold it for more than a year, can I avoid capital gains?
YES
How many properties can I safely flip before UBIT kicks in?
~THREE
If I run out of money, can I transfer more money to my IRA?
YES

31. Proprietary & Confidential, Property of Freedom Growth
case study #3
Gabby - Realtor, Michael - Attorney
Age 54 & 56
Gabby long time self-employed
Entering her prime
Michael long time employee at a firm
Recently started his own practice
Want to limit exposure to the stock market
Two kids in college

32. Proprietary & Confidential, Property of Freedom Growth
solo(k)s are awesome
SEP on steroids
Contribute as employer and employee
Who’s eligible
Solo business owners with no full time
employees
Advantages
Higher contributions for moderate earners Individual 401(k)
Faster to $50K per year or
Solo(k)
No income limitations on Roth
Loans- can be used for college!
UDFI exempt
Custodian not necessary!

33. Proprietary & Confidential, Property of Freedom Growth
how it works
Note
$43,000
Self Directed
Solo(k) Note
$41,000
Old 401(k)
$300,000 $190,000
-$190,000 -$184,000 Fund Flip
$110,000 $6,000 $50,000
TD Fund
$50,000

34. Proprietary & Confidential, Property of Freedom Growth
case study #3

35. Proprietary & Confidential, Property of Freedom Growth
final exam - real estate in your IRA
When deciding on an investment, I should always look for
the highest possible return?
No!
Should I wait to find an investment and then open up a
self-directed retirement account?
No
What’s more important, the operator or the investment?
The Operator
What’s the most important thing to learn about being a
real estate investor?
Evaluating Risk

36. takeaway #5
WHO YOU INVEST WITH
MATTERS MORE THAN
WHAT YOU INVEST IN

37. Thanks!
To get a copy of this presentation
Text “Freedom” to 24587
David Coe
david@freedomgrowth.com
www.freedomgrowth.com
https://www.facebook.com/FreedomGrowth