Unlock the POWER of your IRA Investing in Real Estate · 2020-04-17 · 2015 Contribution Limits Combined Traditional and Roth IRAs SEP (Simplified Employee Pension) IRA $5,500 or

1

Unlock the POWER of your IRA

Investing in Real EstateSM

© Preferred Trust Company 2015

Preferred Trust Company

Introducing Preferred Trust

We are a

Trust Companyand a

Custodianthat specializes in

Self-Directed IRA’s

© 2015

Preferred Trust Company© 2015

Director of Business Development• PhD and MS in Business Administration• 30 Years as an executive in the Fortune 500• 30+ Years as an investor and owner of real estate

BILL BRAY



Disclosure

• This presentation is for general information and does not represent tax, legal and/or investment advice

• Account usage, selection of investments and the performance of those investments are the sole responsibility of the investor and not Preferred Trust Company

• Preferred Trust Company does not perform due diligence on any investment selected by an investor held in their SD-IRA

• Therefore Preferred Trust Company strongly recommends that the investor seek professional advice from appropriate legal, accounting and/or tax advisors of their own choosing prior to making investments


IRAs – 1974

Employee Retirement

Income Security Act

Self directing your IRA

does require selecting a

custodian that holds

alternative investments

ERISA:

© 2015

When did all this start?

Custodial Difference

Single Family Homes Multifamily Homes Vacant Lots or Raw Land Commercial Real Estate

A traditional custodian holds publically traded stock…

The difference – we hold real property as an asset in your account© Preferred Trust Company 2015

Self-Directed IRA means

and NOT your financial advisor decide the type of

asset you are investing in.

YOU are in charge of your investment portfolio

YOU



Financial Advisors

will not tell them

about this option

because many

companies do not

allow them to!

Where can the funds come from?

Former Employer 401k Plans

Possible Employer 401k Plans

IRAs

TSP

Inherited IRA

SEP IRA

Pension Plans



Transfer your

current retirement

plan to a

Self-Directed

IRA

© 2015


Truth: Opening an account or a direct custodial

transfer is NOT a taxable event.

© 2015

Direct Custodial Transfer vs. Distribution

Common Myth:Opening an account will cause me to be

taxed?

Investing in real estate is NOT a distribution –

you do not come in contact with the funds.


What if your current

employers’ fund does

not qualify for a Self-

directed IRA?

© 2015

Invest in yourself

Open a new

account

If your future employment

changes, roll over funds to

control your returns


Contribution LimitsIRA allows all taxpayers under 70 ½

years to contribute to an IRA.

Earned IncomeThe amount of money your IRA

can potentially make based on

your ROI

© 2015

2015 Contribution Limits

Combined Traditional and Roth IRAs

SEP (Simplified Employee Pension) IRA

$5,500 or $6,500 if you are 50 years of age or older before the end of 2015

Contributions can not exceed the lesser of 25% of compensation or $52,000 for 2015


Deadlines: April 15, 2016 for 2015 contributions and April 15, 2017 for 2016 contributions

15

Objectives

Self-Directed IRASM


-2%

0%

4%

Return On Investment (ROI)

National

Average 2.3%


Is this enough for you?

50%Calculated how much they need for retirement

30% Do not participate in a defined contribution plan (such as a 401k plan)

17 Spent in retirement

We live in a nation that is grossly unprepared to support itself during our retirement years

Less than

years

7% Retirement pension from employer


Statistics from the US Department of Labor

82Average Life Expectancy

17Years of Retirement

$129,000Saving $200/month

starting at age 30

ROI 2.3%

$632Monthly Income

Pre-tax not including

social security

Current Statistics


2014

82

17

$129,000

$632

Average Life Expectancy

Years of Retirement

Saving $200/month

starting at age 30

ROI 2.3%

Monthly Income


social security

Current Statistics

x 4% $180,000

$882


2014

82

17

$129,000

$632

Average Life Expectancy

Years of Retirement

Saving $200/month

starting at age 30

ROI 2.3%

Monthly Income


social security

2014

Current Statistics

x 10% $685,000

$3,358© Preferred Trust Company 2015

21

Cash Flow

Self-Directed IRASM


How much will you need for retirement?

Your Situation Your Goals Your Projections

Current Age45

Desired Retirement Age65

Life Expectancy83

Current Annual Income$95,000

Desired Retirement Income100%

Expected Annual Pension$12,000

Expected Social Security$12,000

Your Results

You will need a total of $1.9 million ($1 million in today’s dollars) to retire at 65 years old.


Standard Purchase SDIRA Funds

$20,000 Profit Example:

X5 Years (income per year @ $20k profit)

Gross income: $100,000

Income Tax: $30,000

Net Profit: $70,000

1 Flip per year at $20k Net Profit

$20,000 Profit Example:

X5 Years (income per year @ $20k profit)

Gross income: $100,000

Income Tax: $0

Net Profit: $100,000

1 Flip per year at $20k Net Profit


Holdings as of 6/30/2015 for John Doe IRA

Type of Asset Initial Investment Rate of Return

1234 Indianapolis DriveIndianapolis, IN(Buy & Hold)

$75,000$750/mo. or $9,000/annual (Rental income)

12% Return on Investment (ROI)

5678 Anthony AvenueHenderson, NV(Flip)

$50,000$20,000 (Rehab)

Sale Price - $100,000 (ARV)


Investments R’ Us, LLC(Private Debt- Promissory Note)

$30,000$4,500 per year

15% as an example

ARJ, LLC(Trust Deed Note)

$25,000@ 12% is $3,000 per year


Cash $7,250.00 5% Real Estate Reserve

Investment Class/Category Total IRA Balance/Investment Weighted Rate of Return (ROI)

Real Estate $200,000 23% ($46,500)

Note: These are examples only; Rehab costs may vary.

There is no guarantee your property will produce income.


Account Diligence

Type of Asset Initial Investment Rate of Return

1234 Indianapolis DriveIndianapolis, IN(Buy & Hold)

$75,000$750/mo. or $9,000/annual (Rental income)


5678 Anthony AvenueHenderson, NV(Flip)

$50,000$20,000 (Rehab)

Sale Price - $100,000 (ARV)


Cash $7,250.00 Reserve 5% of asset value in cash

Note: These are examples only; Rehab costs may vary.

There is no guarantee your property will produce income.


Effectively manage assets by maintaining a 5% cash reserve in IRA account to support fees such as Home owners associations, insurance, property management, taxes and mortgages

Setup automatic contributions to grow your retirement possibilities

Real Estate Buying Cycle

Purchase Property w/ IRA

Invest

Invest

Invest

Purchase Property


Avail $

Rent/Income $

Avail $

Avail $

© Preferred Trust Company 2015© Preferred Trust Company 2015

Road Map to Retirement

Holding Real Estate Using an SD-IRA

Current IRA

Custodian

or Financial

Institution

Flip or

Rental is

Purchased

by the IRA

Income is

received

and

returned to

the IRA

Self-

Directed

IRA


Purchasing Options Using SD-IRA

Co-buy with IRA and You

Hard money Lender

Loan IRA Funds

Joint Venture


With a secured Promissory Note

Refinance using Private Lending

IRA’s CAN NOT invest with an S-Corp

Reminder – Your IRA MUST pay for all expenses such as taxes, insurance & rehab costs

LLCs and LPs can be funded


Unrelated

Business Taxable

Income (UBTI)

© 2015

If you qualified for a business loan through an IRA, any gain that comes as a result of the debt financing is taxable.

Consult your CPA

Joint Venture

Other

Investor

Joint

Venture

Real Estate

Investment

IRA

Income

Income


Titling your real estate

with an IRAIt’s all about the vesting!

Preferred Trust Company FBO John Doe IRA


Income in your plan is tax deferred

Required Documents to close a Real Estate Deal

Contractor

Purchase

Agreement

Appraisalor

BPO

Liability

Insurance

Property

Mgmt.

Agreement

Title

Insurance


Required Documents to close a Real Estate Deal

Draftof the

Deed

Settlementor

Closing

Statement

Wiring

InstructionsDirection

Form

Servicing

Agent

Agreement


Required Documents for Earnest Money Deposit

Direction

Form

Contractor

Purchase

Agreement



Proof of Funds

Qualifies you as a

Cash Buyer

© 2015

You must have an open/funded account

before you can receive a Proof of Funds

Open your account TODAY!


Prohibited

Transactions

Collectibles

Metals*

Gems

Coins*

Stamps

Alcoholic Beverages


Disqualified Persons

IRA

Holder

Mom or

Dad

GrandparentsCousin

Aunt or Uncle

Sister or

Brother-in-Law

Niece

Nephew

Brother or

Sister-in-Law

Nephew

Niece

Son or

Daughter-in-LawSpouse

Daughter or

Son-in-Law

Grandson or

Spouse

Granddaughter

or SpouseGrandson or

Spouse

Granddaughter

or Spouse


Prohibited Transactions

Borrowing money

Sell, exchange or lease

Unreasonable Compensation

Use as a security for a loan

Transfer plan income or assets to disqualified person

Lend to disqualified person


Prohibited Transactions

Extend credit to disqualified person

Furnish goods or services to disqualified person

Allow fiduciaries to obtain or use plan’s income or assets



Setting up an

account is

Easy!

Online Application +

photo ID

We do the rest!

© 2015

Just 2 weeks later your account is funded!

Purchasing with an IRA is as easy as 1,2,3…

IRA

Funded

Income

Producing

Properties

into IRA

Real Estate

Investment

Selected



APPLY TODAY!

When you transfer your current retirement accounts

to a Self-Directed IRA

YOUSelect your

Investments,

YOUDetermine

the ROI

YOUChoose your

retirement



Open Your

Account

Today!

This directly

affects your

Rate of Return

© 2015

Your Preferred Trust Team


Supports you with

account details

Customer Service

Assist the funding of

your account

Transfers

Gets your money

working for you

Investments

Accounting team facilitates the transactions in and out of your account

Accounting

Contact us now to get started!

(702) 990-7892 [email protected] preferredtrustcompany.comPHONE EMAIL WEBSITE

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