WelcomeWebinar – How to

Lend with Your IRA

www.theentrustgroup.com

Office in Chicago and Fort Myers

Who We Are…

Dave Owens, CPA, CES

Entrust is the largest Self Directed IRA administrator in the United States – Offices through out the United States.

The Entrust Group, and its franchisees ("Entrust") do not provide investment advice or endorsements based on information included in this workbook.

All information and materials contained are provided for educational purposes only. All parties are encouraged to consult with their attorneys, accountants and financial advisors before entering into any type of investments.

Specialize in 1031 Exchanges and Self-Directed Retirement Plans

Educate customers

Provide clients with the necessary tools and information to enhance their investments

Encourage their desire to control their own investment decisions

Review potential transactions

The Entrust Group

What we do…

1. You may be able to deduct your contributions in whole or in part, depending on the type of IRA and your circumstances.

2. Generally, amounts in your IRA, including earnings and gains, are not taxed until distributed, or, in some cases, are not taxed at all if distributed according to the rules.

Advantages of an IRA

Self Directed Assets

What do our clients invest in?

So… You can invest in

Real Estate (All Types)

(including Tenant in Common Interest)

Notes/Mortgage Receivable

Real Estate Options or Contracts

LLC or closely held stocks

and on and on. . . . .

Think of it as a restaurant, where every known kind food is available.

On our menu is every known, permissible investment that is available.

Individual Retirement Arrangements

Traditional– Tax Deferred

Roth– Tax Deferred and Tax Free

IRAs established by Employers, using traditional IRAs

SEP-IRAs and SIMPLE IRAs

Educational savings plan and Health Savings Accounts

Coverdell Education Savings Accounts

Employer Based Qualified Plans

Individual K Plans

Each has its advantages depending on your personal circumstances

Types of Retirement Plans

PROHIBITED TRANSACTIONS (check IRC 4975)For your tax deferred/tax free, health and well being, there are a few rules that

you MUST observe.

Gems, works of art, antiques, stamps, certain collectible coins, carpets, and wine (other items specified by the Secretary)

In addition your plan can't deal with you personally or members of your family, which are specified as ascendants and descendants and spouses thereof. Also, you cannot deal with Corps., businesses, or trusts that you control, any plan fiduciary, or anyone providing services to the plan.

You cannot purchase property you already own

Ownership is flexible; you can own a percentage interest in an asset with anyone including yourself (i.e. Tenant in Common Ownership)

You cannot use investment for personal use

Self-Direction: What are the Rules?

How to Open a Self Directed Account

3 Easy Steps to becoming truly diversified

Step 1: Open a Self-Directed IRA

Step 2: Fund Your New Account (Contribution/401k Rollover/Transfer)

Step 3: Find the Asset

Private Lending

Typically facts Large down payment (30-50%) Short Terms (0-2 years) Higher Interest Rate (8-14%) Borrower pays all costs

Appraisal, attorney fees, doc stamps

How to Lend Money Using Your IRA

Investment Options

Case Study #1Buddy buys a property in his IRA on 11/26/07

for $13,000

Buddy sells the property for $25,000 w/$3,000 down, balance to be paid to his IRA 8% with monthly payments of $400, balloon in 6 months

Promissory Note

Promissory Note – Issues

Case Study #2

Bill Jones and his buddies have been doing private money lending in Cape Coral for about 10 years outside their IRA

Bill’s neighbor built a house with a construction loan for $300,000. When the house was complete, the bank did not want to do the Permanent loan

Bill steps in with his friends and loans $100,00 to his neighbor with a first mortgage.

All three names are on the mortgage. Bill uses his IRA, neighbors use regular cash.

Terms were 10% for 2 years, interest only

Bill’s attorney draws up all documents but neighbor pays for the costs.

Case Study #2

Case Study #3 Lisa and Bill are friends

Bill would like to purchase real estate in his IRA, but needs nonrecourse financing

Bill gets a contract with IRA, to purchase a house for $50,000

Bill only has $25,000 in his IRA

Lisa’s IRA will loan $35,000 to Bill’s IRA to purchase the house

Extra $10,000 will be used for fix up

Bill submits a buy direction form to us

We facilitate his IRA purchasing the property

Case Study #3

IRA purchases the house

They fix the house up and sell it for $100,000

At sale the loan is paid back – Lisa loan terms were 12% with a $3000 prepayment penalty

Case Study #3

Purchase Price 50,000Fix up 10,000Basis 60,000

Sales Price 100,000

Gain 40,000

Prepayment Penalty to Lisa IRA $3,000

Case Study #3

Stonehenge Lending

Local Mortgage Brokers helps puts deals together

Finds Investors and they all purchase a portion of the note

For Example - $500,000 mortgage on $1,000,000 property

Five Investors each loan $100,000 Five Names on the Mortgage (pmts made to Stonehenge)

Individual K - Lending to Yourself Must be Self Employed

Transfer your IRA to and Indy K

Can borrow up to $50,000 or 50%of the account balance can be borrowed

Pay yourself back over 5 years with interest

Call a local office today

www.theentrustgroup.com

239-333-1031 Florida

312-235-3200 Chicago

How to Learn More