WEBVTT
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00:00:09.759Good morning, good afternoon, everybody.
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00:00:11.039My name is Nate Hare.
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00:00:17.679This is Daniel Tercy, and this is the directed IRA webinar and a very special open forum.
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00:00:29.280So these are fun to do for us and hopefully educational for you guys, where it gives you an opportunity to just ask any question related to self-directed IRAs that's on your mind.
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00:00:31.679We don't have a specific topic to cover.
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00:00:48.560This is just to address all any concerns you have, misconceptions, and just really dive into a little bit of this product we call a self-directed IRA, just to give you guys a better understanding of what it is and how it works and how you can use it to build generational tax-free wealth for you and your family.
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00:00:53.759Before that, we're going to go over some housekeeping issues, but, or housekeeping announcements.
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00:00:59.600But as we go through the open forum, we've got two ways that you can communicate with us.
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00:01:04.319There's one, if you want to ask questions, we've got a QA box.
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00:01:07.680We're going to be actively monitoring the QA box.
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00:01:10.719Post your questions in the QA box.
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00:01:13.760For the chat, we want you to use that as a community forum.
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00:01:14.959Network with each other.
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00:01:20.319If you've got deals that you're looking for, maybe some private money financing on private money capital.
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00:01:22.799Network in the chat box.
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00:01:30.799Save questions for the QA box, and we'll try to get to all your pressing questions when it comes to self-directed IRAs.
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00:01:32.079It's a pretty proud moment for me.
00:01:32.159 -->
00:01:38.879I've worked here three years and I finally made it to the top where I get to answer questions on open forums.
00:01:39.040 -->
00:01:39.840I've never done this.
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00:01:40.480It's crazy.
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00:01:43.040We do these all the time, and I've never actually had the opportunity.
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00:01:48.400I finally let Nate come onto my QA forum that I do with you all.
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00:01:53.920So I'm sorry in advance, but I have to I have to train him a little bit.
00:01:54.239 -->
00:01:55.760I've been doing all of his training lately.
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00:01:58.079Don't don't let his gray hairs fool you.
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00:01:58.799I have to train him.
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00:02:02.159Yes, Daniel paved the way for me to answer the open forum.
00:02:02.239 -->
00:02:06.159So I know you guys have seen me on the other programs talking about private lending and all those things.
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00:02:09.039So uh I love the opportunity to just answer questions.
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00:02:13.039These are the types of questions we get all the time when we have phone calls, when we're at events.
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00:02:15.039So uh we'll we'll jump right into that.
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00:02:18.479And if if you guys remember, yeah, uh we had Lindsay on.
00:02:18.639 -->
00:02:20.159Nate is basically going to be a Lindsay.
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00:02:24.879They're both very extra experienced, so having them on is always actually really great for you guys.
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00:02:28.479I know I I think I'm pretty good, but these two are definitely much better than me.
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00:02:33.120The only difference is I'm much, much younger than Lindsay because she's much, much older than everybody here.
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00:02:35.280So but very experienced.
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00:02:37.439Uh I just I like to razz her.
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00:02:38.400Very experienced.
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00:02:41.039We've got 13 years of experience uh right here.
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00:02:43.599Daniel's been in the industry with multiple companies.
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00:02:45.120We've both been with multiple companies.
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00:02:48.400So uh you've got the the best of both worlds here.
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00:02:50.800So quick announcements first.
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00:02:57.439Uh, if you guys have been following directed IRA for at least a year, you know that we put on two phenomenal events.
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00:03:01.280Uh, one of them is coming up in just a few weeks now.
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00:03:04.639Uh, this is our self-directed IRA summit.
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00:03:08.400I believe we're on our 13th annual self-directed IRA summit.
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00:03:10.400So we've been doing this for quite some time.
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00:03:11.120Yep.
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00:03:18.080Uh, and this is a one-day crash course, everything about self-directed IRAs.
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00:03:20.319We're gonna take you from A to Z.
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00:03:27.599Uh, this is an event that was started by our CEO and founder, Matt Sorensen, who wrote the best-selling book, the self-directed IRA Handbook.
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00:03:36.800Uh, and this is our one opportunity to get people in a room on a platform and just learn everything that we like to teach about self-directed IRAs.
00:03:36.960 -->
00:03:47.039Uh, we're gonna cover account types, we're gonna cover uh investment strategies, we're gonna cover fun things like the difference between an HSA and a Roth IRA.
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00:03:53.919Uh, how do we make in certain investments like into mineral rights or cryptocurrency or real estate or debt funds?
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00:03:58.240Um, this is a great event and it only comes once a year.
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00:04:00.879We normally do this event live.
00:04:00.960 -->
00:04:05.919Uh, live's great because we love the live audience, but live requires travel for people.
00:04:06.080 -->
00:04:08.400So it just doesn't cast a wide enough net.
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00:04:18.240And we decided that we're gonna go to virtual this year and cast the biggest net possible so anybody can attend and participate from the comfort of their living room.
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00:04:22.720We have a special discount for you guys for being on the webinar today.
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00:04:34.319So if you go to S D I R A Summit, that's S D I R A, as in self-directed IRA, sdirasummit.com, you can find tickets.
00:04:34.480 -->
00:04:36.639Tickets are there is a price to tickets.
00:04:36.800 -->
00:04:43.600However, if you use the code SD2026, you get them for free.
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00:04:47.279Yes, you get free access to the virtual event.
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00:04:50.399And this is gonna be April 17th.
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00:04:52.879Uh, I we're just had a meeting this morning.
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00:04:54.399We went over the agenda.
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00:04:57.839Trust me, you guys don't want to miss this event.
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00:05:02.800So you can either scan that QR code or go to SDIRA Summit.com.
00:05:02.879 -->
00:05:09.680And when you punch in the uh code SD2026 at checkout, you will get the ticket for free.
00:05:09.839 -->
00:05:12.800So make sure that you guys go jump on, register.
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00:05:13.839It's gonna be a great time.
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00:05:15.199April 17th.
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00:05:24.399Uh, the next thing I want to mention, and we'll we'll circle back to this, is we are doing a special discount for you guys for being on the webinar today.
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00:05:30.560If you are not a client, or maybe you learned something about another account type that you weren't really familiar with.
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00:05:35.519We've got six different tax-exempt accounts that you can use to invest in alternatives.
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00:05:39.680Uh, and quite frankly, most people only have one, maybe two accounts.
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00:05:53.439I see investors really take this concept of tax-free wealth building to the next level and open several accounts, either for themselves, for their kids, for their family members to cover their health expenses, education expenses.
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00:05:54.959We're gonna dive into that.
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00:05:59.120But we do have a special promo for everybody that is on here live.
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00:06:05.199Uh, and we'll circle back to this, but we're gonna give$200 off every single account you decide to open.
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00:06:10.560And all it requires for you to do is just book a call with one of our IRA account executives.
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00:06:15.120It doesn't obligate you to doing anything, but I want to see people take action.
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00:06:19.360And if you've been kind of sitting on the fence, kind of thinking, like, maybe is this right for me?
00:06:19.519 -->
00:06:20.879Is this not right for me?
00:06:21.040 -->
00:06:22.079You know, how does this work?
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00:06:25.439Uh, this is the opportunity to just get off the fence and actually take some action.
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00:06:33.519So you save$200 off every account you set up if you put on the code put on the application forum 200.
00:06:33.680 -->
00:06:38.399Just want to throw that out there before we start because we're gonna start talking about account types and things like that.
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00:06:41.120And we'll circle back to this in a minute.
00:06:41.360 -->
00:06:43.439So that's it for announcements.
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00:06:45.759Let's get in to the questions.
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00:06:46.879All right, everybody.
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00:06:48.800So uh just a few more things.
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00:06:50.560Just remember, Michelle's also in the chat.
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00:06:51.920She'll be answering questions.
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00:06:55.199Um, and then you guys will see me looking away from the camera every now and then.
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00:06:58.720It's because I'm also feeling the questions as well, right here from the desk.
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00:07:09.839And I think because Nate touched on the promo code, the discount, we'll just start with the very first question, which is what are the all-in annual costs, uh, the custodian feeds, transaction fees, and things like that.
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00:07:10.959So that's a great question.
00:07:11.120 -->
00:07:12.319It's a question we get all the time.
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00:07:14.560You know, what how much does it cost to self-direct?
00:07:14.720 -->
00:07:16.959Uh, first, let's talk about what people are familiar with.
00:07:17.120 -->
00:07:23.680There, if you have an IRA with Fidelity or Charles Schwab, you typically don't see fees, but you really are feed.
00:07:23.839 -->
00:07:30.000Um, you're feeding the broker fees, the transaction fees, the commissions that the advisor gets.
00:07:30.160 -->
00:07:38.079Um, so on on those types of accounts, I would say the average retirement count actually pays about 10% in fees.
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00:07:40.319Our accounts work a little different.
00:07:40.480 -->
00:07:47.199Because we're not selling investments or providing investment opportunities, our clients are telling us what they want to invest in.
00:07:47.360 -->
00:07:49.360We're just a transactional-based company.
00:07:49.439 -->
00:07:54.639We just have a fee for having to do something on behalf of our client or on behalf of their retirement account.
00:07:54.879 -->
00:07:59.519So, three main fees: one account establishment fee, 50 bucks.
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00:08:00.959That's just a one-time fee.
00:08:01.120 -->
00:08:02.720When you open an account, you pay 50 bucks.
00:08:02.879 -->
00:08:04.879Wham, you got a self-directed IRA.
00:08:05.040 -->
00:08:09.439Uh, the next fee that you typically see is just gonna be the annual account fee.
00:08:09.600 -->
00:08:18.399Now, this is the only recurring fee that you have, and this is just the custodial fee for us to do the tax reporting, manage the account, do all the things that we need to do.
00:08:18.720 -->
00:08:22.639Typically, that's$4.95 a year, and that's per account.
00:08:22.800 -->
00:08:29.040Now, one thing I want to point out is I've worked for several other companies, and not all companies charge per account.
00:08:29.279 -->
00:08:35.279Some companies in our space charge per investment, some charge based on the value of your account.
00:08:35.679 -->
00:08:39.919Either way you slice that Apple, the more active you are, the more fees you pay.
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00:08:42.240We've never been uh on that bandwagon.
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00:08:45.519We're more grow your account and we won't fee you to death.
00:08:45.679 -->
00:08:48.480So we just charge an annual account fee of$495.
00:08:48.639 -->
00:08:54.159That's per account that will include up to three investments before there's any fee change.
00:08:54.399 -->
00:08:59.919So you got the$50 account establishment fee, the$495 annual administration fee.
00:09:00.080 -->
00:09:10.639And then anytime you need us to deploy funds for an investment, there's just a$50 processing fee to deploy the funds, either buy the investment and then sell the investment.
00:09:10.879 -->
00:09:12.159So that's really it.
00:09:12.240 -->
00:09:19.120I mean, there's some other small fees here or there, um, you know, overnight packages, you know, wire fees, things like that.
00:09:19.200 -->
00:09:24.559But the things that you're gonna see on the account establishment investment is just those three fees there.
00:09:24.799 -->
00:09:26.399I also want to make this point.
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00:09:33.600If you guys are considering opening an account, there's two options on how you can pay those fees.
00:09:33.840 -->
00:09:39.120You can either have them deducted from your account or you can put the fees on a credit card.
00:09:39.279 -->
00:09:42.080So let's just assume you got$400 a year in fees.
00:09:42.799 -->
00:09:46.559Do I want to take$400 out of my Roth IRA to pay a fee?
00:09:46.720 -->
00:09:51.519Well, I all I did was just take$400 of tax-free money that can't grow tax-free anymore.
00:09:51.840 -->
00:09:57.600I always think it's best to pay the custodial fees for your self-directed IRA on a credit card.
00:09:57.759 -->
00:09:59.600Get some points, get some miles.
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00:10:01.840It doesn't reduce the value of your IRA.
00:10:01.919 -->
00:10:04.559Um, but that in a nutshell is how the fees work.
00:10:04.720 -->
00:10:06.559We're simply transactional based.
00:10:06.720 -->
00:10:09.440When we need to do something, we do it on behalf of you.
00:10:09.519 -->
00:10:11.519So you can buy alternative investments.
00:10:11.840 -->
00:10:12.480All right.
00:10:12.720 -->
00:10:16.480Let's go to sorry, forgetting, moving away from the microphone.
00:10:16.639 -->
00:10:21.519What's the difference between a checkbook IRA and a self-directed IRA?
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00:10:22.720Okay, I love that.
00:10:22.879 -->
00:10:24.720Okay, so let's dive into that.
00:10:25.039 -->
00:10:30.799So self-directed, let's just beat down the misconception on what self-directed really means.
00:10:31.039 -->
00:10:34.080An IRA is an IRA, is an IRA.
00:10:34.159 -->
00:10:38.240And when we talk about IRAs, it's it's an individual retirement account.
00:10:38.639 -->
00:10:42.000An individual retirement account is governed by the same set of rules.
00:10:42.159 -->
00:10:46.320Doesn't matter if you have an IRA at Fidelity or an IRA at directed IRA.
00:10:46.480 -->
00:10:48.159The IRA itself is the same.
00:10:48.320 -->
00:10:48.639Okay.
00:10:48.799 -->
00:10:54.720It's a tax exempt trust that you manage, that you invest so that you can retire.
00:10:54.960 -->
00:10:55.200Okay.
00:10:55.360 -->
00:10:58.159So IRAs are no the same no matter where you go.
00:10:58.320 -->
00:11:03.840The only reason we call it self-directed is because you have to tell us what the investment's going to be.
00:11:04.159 -->
00:11:06.480You have to quote self-direct it.
00:11:07.039 -->
00:11:09.200Self-directed is just a marketing term.
00:11:09.279 -->
00:11:11.919It's not a legal meaning, it's not a type of IRA at all.
00:11:12.080 -->
00:11:14.879It just means that you have to tell us what the investment's going to be.
00:11:15.440 -->
00:11:30.799Now, when you talk when you mentioned checkbook IRA LLC, which is the last piece of that, this is just a structure that you can set up, which is optional, that may help you self-direct your IRA.
00:11:31.039 -->
00:11:35.120So it's not an IRA, it's really just an LLC, right?
00:11:35.200 -->
00:11:41.120A limited liability corporation that your IRA owns that you can manage.
00:11:41.360 -->
00:11:45.919Now, why would you set up an IRA LLC instead of just use an IRA?
00:11:46.559 -->
00:11:51.200Oftentimes we see clients, let's say that you've got an investment that's got a lot of moving parts.
00:11:51.679 -->
00:11:56.720Let's say that you want to, with your self-directed Roth IRA, you want to buy an investment property.
00:11:56.960 -->
00:12:02.799But the investment property owned in your IRA, it's got a heavy rehab, right?
00:12:02.960 -->
00:12:08.240We got to pay for contractor labor, we got to pay for materials, uh, we got to send wires here and there.
00:12:08.320 -->
00:12:11.440We got to we gotta pay contractors or subcontractors.
00:12:11.679 -->
00:12:23.279If the investment has a lot of moving parts and we're doing that investment solely in our IRA, the custodian has to cut those feet, cut those checks, send those wires on your behalf.
00:12:23.759 -->
00:12:37.360If you want to make it easier, what we've done, and this is through our sister company law firm, KKOS Lawyers, what they'll do is they will set up an LLC that's owned by your IRA, okay, that you act as manager of.
00:12:37.679 -->
00:12:43.200The investments on our books inside your IRA, it shows it owns an LLC.
00:12:43.279 -->
00:12:47.440Now, this can be a single member LLC or a multi-member LLC.
00:12:47.840 -->
00:12:53.360Single member, if my Roth is the only owner of the of the LLC, that's a single member LLC.
00:12:53.600 -->
00:12:58.080I actually have an LLC that I'm setting up right now that's going to be owned by my Roth and my HSA.
00:12:58.639 -->
00:13:00.480That's a multi-member LLC.
00:13:01.039 -->
00:13:06.320So the reason why you might want to have this is because that LLC comes with a business checking account.
00:13:06.879 -->
00:13:09.360You have access to the business checking account.
00:13:09.840 -->
00:13:14.559And when we do that structure first, now it's the LLC that's cutting the checks.
00:13:14.720 -->
00:13:20.799Now it's the LLC that's that's depositing the income or where the income is being deposited from that investment.
00:13:20.960 -->
00:13:27.279And you can deploy money quicker, oftentimes, and easier without having to contact us.
00:13:27.519 -->
00:13:29.200So is it required?
00:13:29.519 -->
00:13:29.840No.
00:13:30.159 -->
00:13:32.799But does is it helpful for certain investments?
00:13:33.039 -->
00:13:33.600Yes.
00:13:33.840 -->
00:13:43.919Um, I would say talk to one of our IRA account executives, tell them what you're going to invest in, and have them kind of walk you through whether or not you might need that or not.
00:13:44.159 -->
00:13:51.600Oftentimes you don't, but in certain circumstances, it does make the process of deploying money and collecting income a little bit easier.
00:13:51.840 -->
00:13:53.600I I usually do uh three scenarios.
00:13:53.679 -->
00:13:58.480So one is like what Nate mentioned, which is a lot of moving parts for your investments.
00:13:58.639 -->
00:13:59.679That's really good.
00:13:59.840 -->
00:14:04.960Uh ease of access, how fast do you need your money, which goes back to what Nate was talking about.
00:14:05.120 -->
00:14:09.840But the third, which ties them all together, is also how many investments are you doing?
00:14:10.000 -->
00:14:11.679Are you doing lots of different investments?
00:14:11.840 -->
00:14:12.639Are you doing gold?
00:14:12.799 -->
00:14:14.080Are you doing cryptocurrency?
00:14:14.159 -->
00:14:15.039Are you doing real estate?
00:14:15.120 -->
00:14:16.559Are you doing undeveloped land?
00:14:16.720 -->
00:14:22.000If you're doing many different avenues of investing, an IRA LLC is definitely gonna be right for you as well.
00:14:22.240 -->
00:14:24.080And there's certain investments you might even need it.
00:14:24.159 -->
00:14:29.519And this, again, I'm gonna share some circumstances just so you can understand why you might need it and why you might not.
00:14:29.679 -->
00:14:31.440I deal with a lot of real estate investors.
00:14:31.519 -->
00:14:33.039I've been in real estate for a long time.
00:14:33.200 -->
00:14:36.320So most of the clients that I talk to, they're buying real estate.
00:14:36.480 -->
00:14:36.720Okay.
00:14:36.879 -->
00:14:41.440If somebody's just gonna buy a three-bedroom, two-bath house as a rental, no real rehab.
00:14:41.600 -->
00:14:50.320Do I need an LLC if all we're doing is deploying money out of the IRA to buy the property, and then our renter is just gonna pay rent back into the IRA?
00:14:50.480 -->
00:14:53.600I might not need an LLC if it's just that simple.
00:14:53.840 -->
00:14:56.240We talked about the the rehab example, right?
00:14:56.480 -->
00:15:02.799Soon as you add more components to the investment, more moving parts, more people involved, the LLC might be beneficial.
00:15:02.960 -->
00:15:07.279But there's some investments that might require you to have an IRA LLC.
00:15:07.440 -->
00:15:11.200Two circumstances I can think right off the top of my head commercial property.
00:15:11.679 -->
00:15:17.519I had a client that uh was buying an ice rink of all things in his self-directed IRA.
00:15:17.759 -->
00:15:24.639And because that was considered commercial property, there were some other uh tenants and things like that, but essentially it was a commercial property.
00:15:24.799 -->
00:15:30.559His attorney advised because of the nature of the investment, we need to have it in an LLC that's owned by the IRA.
00:15:30.720 -->
00:15:36.879We don't want to have your IRA own this directly and have that account information on public record.
00:15:36.960 -->
00:15:39.679And it's just it's just safer to have it in the LLC.
00:15:40.000 -->
00:15:45.679Another reason I've seen people have to use an IRA LLC, buying property at auction.
00:15:45.840 -->
00:15:47.360That's not one we talk about very often.
00:15:47.600 -->
00:15:48.080That's a good point.
00:15:48.240 -->
00:15:55.600But if you're buying property at auction, which oftentimes a lot of real estate investors do, they go down to the auction, they bid on properties.
00:15:55.840 -->
00:16:04.399A lot of times, depending on where you're buying, there's a trustee that's managing those sales and they want cash on the spot.
00:16:04.720 -->
00:16:09.200How do you have IRA money on the spot without taking a distribution?
00:16:09.519 -->
00:16:09.840Right?
00:16:10.480 -->
00:16:23.039You set up an IRA LLC, have your IRAs own the LLC, you're the manager, you walk down with the business checking account and the checkbook for the LLC, you write a check, you endorse a check over to the trustee.
00:16:23.279 -->
00:16:27.120Wham, now your IRA LLC now owns a property you bought at auction.
00:16:27.279 -->
00:16:30.399So other reasons why you might not, I just do lending.
00:16:30.559 -->
00:16:32.720I just loan to real estate flippers.
00:16:32.799 -->
00:16:41.360So if I'm just gonna send money to a title company out of my Roth IRA to help a flipper buy a property, and they're just gonna pay interest payments to my Roth IRA.
00:16:41.519 -->
00:16:42.799Do I need an LLC to do that?
00:16:42.879 -->
00:16:46.399Or can I just have directed IRA deploy those funds and collect them?
00:16:46.559 -->
00:16:51.679So again, it's not not a requirement, but it it is a good question to ask of the IRA account executive.
00:16:51.919 -->
00:16:57.200And we we have someone in here, uh Plasham, uh, you asked, do I need this for tax liens and deeds?
00:16:57.360 -->
00:16:58.720So first another good one.
00:16:58.799 -->
00:16:59.679Yeah, another good one.
00:16:59.759 -->
00:17:00.000Yep.
00:17:00.159 -->
00:17:03.919Tax liens and deeds, another good one, especially if you're buying them in bulk.
00:17:04.079 -->
00:17:08.640Um, and if you don't if you're not familiar with them, you buy a bunch of tax deeds, tax liens.
00:17:08.799 -->
00:17:12.799Um, in some cases, I've seen people buy them where some of them are redeemed and some aren't.
00:17:12.960 -->
00:17:18.799So uh if you're buying something like that, easier to have the IRA LLC and the checkbook handy.
00:17:19.039 -->
00:17:21.519And and again, I think we're gonna lean into this as well.
00:17:21.759 -->
00:17:24.880How do I invest in gold, oil market, and minerals?
00:17:25.039 -->
00:17:26.799IRA LLC will help you with that.
00:17:26.960 -->
00:17:30.720But we also do offer self-directed IRAs that can do that for you as well.
00:17:30.960 -->
00:17:31.599Yeah, yeah.
00:17:31.680 -->
00:17:39.599Again, these are and these are great topics because these are topics on our list of things that we're gonna discuss at the self-directed IRA summit.
00:17:39.759 -->
00:17:43.599So as a reminder, that's a that's a good lead in the self-directed IRA summit.
00:17:43.759 -->
00:17:48.160We're gonna have special um sessions on oil and gas and mineral rights.
00:17:48.319 -->
00:17:50.640We're gonna have a special session on cryptocurrency.
00:17:50.720 -->
00:17:55.039We're gonna have a special session on oil and gas and and precious metals.
00:17:55.200 -->
00:17:58.240Are we gonna are we gonna maybe talk about livestock as well, possibly?
00:17:58.559 -->
00:17:58.960Maybe.
00:17:59.519 -->
00:18:00.720Maybe we'll talk about that.
00:18:00.880 -->
00:18:06.400Um, now one of the interesting things, I I want to stick to that question just for a brief second.
00:18:07.200 -->
00:18:11.440One of those investments is a little unique compared to the other ones.
00:18:11.680 -->
00:18:13.200That's precious metals.
00:18:13.359 -->
00:18:13.680Okay.
00:18:14.079 -->
00:18:16.079So precious metals is a unique one.
00:18:16.240 -->
00:18:24.559When we buy precious metals in an IRA, there's one thing that has to be added on to the investment, which is a storage uh facility.
00:18:25.119 -->
00:18:34.640When you're buying gold or buying silver from your IR with your IRA, we have to have somewhere that the metals are stored.
00:18:34.960 -->
00:18:42.559Now, based on IRA tax law, you're not allowed to possess the assets that are owned by your retirement plan.
00:18:42.799 -->
00:18:45.359Soon as you possess them, it's called a distribution.
00:18:45.759 -->
00:18:54.880So when you're buying something that that's physical gold or physical silver, they could be great investments, but you can't store it at your house.
00:18:55.119 -->
00:18:57.119We can't store it at the office.
00:18:57.359 -->
00:19:00.640So you use a third-party storage facility.
00:19:00.720 -->
00:19:03.920Well, we use uh first uh Delaware depository.
00:19:04.079 -->
00:19:04.960Delaware depository.
00:19:05.039 -->
00:19:06.000Sorry, just slipped my mind.
00:19:06.240 -->
00:19:09.759Delaware depository, they've been in business for decades and decades.
00:19:10.079 -->
00:19:11.519They're not just located in Delaware.
00:19:11.759 -->
00:19:13.440They're not just located in Delaware, right?
00:19:13.599 -->
00:19:19.920So oftentimes when a client tells us they want to buy gold or silver, um, that company is going to store it for you.
00:19:20.079 -->
00:19:28.240Uh, and oftentimes, sometimes you're even buying it from the depository too, because they have the the precious metals that you're actually buying and they just change the account number.
00:19:28.400 -->
00:19:31.440So that's just one unique thing with precious metals.
00:19:31.519 -->
00:19:34.960It has you have to have a third-party storage facility that's regulated.
00:19:35.279 -->
00:19:43.440And for those of you that are maybe getting uncomfortable sleeping on your gold and wanting to move it into your IRA, you cannot do that.
00:19:43.599 -->
00:19:43.839Okay.
00:19:44.240 -->
00:19:51.200It has to, it has to remain outside of your IRA, but you can purchase new gold and silver and platinum and palladium, I think.
00:19:51.279 -->
00:19:51.519Yes.
00:19:51.680 -->
00:19:53.680Uh, inside of your IRA for the future.
00:19:53.759 -->
00:19:55.359Uh, ones that you don't have to sleep on.
00:19:55.519 -->
00:19:55.759Yes.
00:19:55.920 -->
00:19:58.480All the other ones you don't need this the storage facility.
00:19:58.640 -->
00:20:05.519Cryptocurrency, there's usually platforms that actually will hold it, or or you've got like storage or a wallet.
00:20:05.599 -->
00:20:07.359Um, those are done oftentimes.
00:20:07.519 -->
00:20:11.279Crypto IRAs are one of our leading products that people like to have.
00:20:11.599 -->
00:20:15.519Um, and oil and gas and mineral rights, another great investment.
00:20:15.599 -->
00:20:18.720We have a lot of clients buying into mineral rights right now.
00:20:18.880 -->
00:20:22.960Um, and that's that's really a real estate investment when you look at it.
00:20:23.200 -->
00:20:34.160Oftentimes, depending on how that investment's structured, if my Roth IRA or my self-directed HSA is gonna invest in a mineral right package, I actually might have a piece of a deed on that investment.
00:20:34.240 -->
00:20:37.519So we don't need any extra special storage for that.
00:20:37.759 -->
00:20:52.799Typically, what we're doing as the custodian is when we deploy the money from your IRA to purchase that investment, we're gonna retain the rights of ownership, which is usually just held on a deed or a purchase contract.
00:20:53.039 -->
00:20:58.559So those types of investments are very easy to process as well, very popular in the space right now.
00:20:58.799 -->
00:21:00.319I uh also just got some news.
00:21:00.400 -->
00:21:06.000I haven't told you yet, that a certain competitor is not holding uh middle rights in their IRAs.
00:21:06.079 -->
00:21:09.440So we yeah, I have a client that we had to work extensively with.
00:21:09.680 -->
00:21:12.559I brought in our asset team to help us out.
00:21:12.720 -->
00:21:20.079It took about a month to get this um other person to work with us and help us get their asset over to us.
00:21:20.240 -->
00:21:22.000So we really put in a lot of legwork to get it.
00:21:22.559 -->
00:21:23.359We have we have some.
00:21:23.440 -->
00:21:28.160If you guys are interested to learn more about that, you can go to our directed IRA uh YouTube page.
00:21:28.240 -->
00:21:28.400Yep.
00:21:28.559 -->
00:21:37.920We have a lot of recorded webinars that dive deeper into those specific asset classes um with some knowledgeable experts in the space.
00:21:38.079 -->
00:21:44.000So I'm sure if you want to learn more about it, just type in directed IRA mineral rights and those videos will pop up.
00:21:44.319 -->
00:21:50.480Yeah, pretty much if you ask any question into Google, it's gonna be uh us or the IRS that's gonna pop up for your answers.
00:21:51.759 -->
00:21:52.240Great question.
00:21:52.880 -->
00:21:53.119Yeah.
00:21:53.279 -->
00:21:54.160So let's look at.
00:21:54.640 -->
00:21:56.400I'm not a huge fan of this question.
00:21:56.480 -->
00:21:59.759Uh, I would like to hear your answer of it because I get it every now and then.
00:22:00.079 -->
00:22:01.920And maybe it's just because I don't know how to answer it very well.
00:22:02.000 -->
00:22:04.799But can a self-directed IRA invest in foreign currency?
00:22:04.880 -->
00:22:08.160And I think that goes back to IRA LLC stuff as well.
00:22:08.400 -->
00:22:10.000Yeah, I mean, it can, it can.
00:22:10.160 -->
00:22:17.519I mean, the the IRS only deems two investments restricted in your IRA: life insurance contracts and collectibles.
00:22:17.839 -->
00:22:23.039So with foreign currency, it's one of those ones is how are we how are we trading on a platform?
00:22:23.119 -->
00:22:24.240How are we setting it up?
00:22:24.319 -->
00:22:29.440How are we building the structure to get your IRA to trade?
00:22:29.599 -->
00:22:29.839Right.
00:22:30.000 -->
00:22:34.240Sometimes we have to add an entity or have some sort of platform in between.
00:22:34.480 -->
00:22:38.960So on those specific investments, yes, you can invest in foreign currency.
00:22:39.119 -->
00:22:41.759You could buy property on the moon if you wanted to.
00:22:42.319 -->
00:22:44.240But just talk to an IRA specialist.
00:22:44.319 -->
00:22:51.680These are the questions that when you when you call, when you call or book a call with our IRA account executives, tell them what you're looking to do specifically.
00:22:51.920 -->
00:22:54.480And they've got, they have these phone calls all the time.
00:22:54.720 -->
00:23:05.519They'll give you, without recommending or advising, they'll give you at least what clients are doing to invest in that type of investment, or give you a couple options so that you can decide which structure is going to be best for you.
00:23:05.759 -->
00:23:07.359Let me preface this though.
00:23:08.000 -->
00:23:15.039On most investments, we are not having to set up special structures to do these sorts of investments.
00:23:15.279 -->
00:23:23.119If your IRA just wants to invest into a multifamily syndication, there's absolutely no special structure that we need for that.
00:23:23.359 -->
00:23:29.920The IRA just invests into whatever investment sponsor you decide, we sign an operating agreement and we're done.
00:23:30.000 -->
00:23:30.319Okay.
00:23:30.640 -->
00:23:33.680Your IRA wants to buy just a rental property, right?
00:23:33.759 -->
00:23:34.960With not a lot of moving parts.
00:23:35.039 -->
00:23:35.279Okay.
00:23:35.440 -->
00:23:36.960Don't need a special structure for that.
00:23:37.599 -->
00:23:39.440You want to be a private lender like I do.
00:23:39.519 -->
00:23:43.599You want to just make private money loans secured by real estate out of your IRA.
00:23:43.759 -->
00:23:46.160No special structure necessarily needed for that.
00:23:46.400 -->
00:23:51.279So I would say 90% of our investments do not need a special structure.
00:23:51.440 -->
00:23:55.680But if you do have an investment that again, it's a little bit, you know, off the beaten path.
00:23:55.839 -->
00:24:00.559Yeah, you can do it, but talk to us and let us figure out how we can best structure it for you.
00:24:00.880 -->
00:24:01.359All right.
00:24:01.599 -->
00:24:05.599What is a minimum amount in an IRA?
00:24:06.319 -->
00:24:07.759Suggest to make an investment.
00:24:08.000 -->
00:24:12.160And do I have to move my whole IRA over or can I just do some of it?
00:24:12.400 -->
00:24:12.559Okay.
00:24:12.720 -->
00:24:14.079Very good, very good question.
00:24:14.319 -->
00:24:20.720So, one, you do not need to move your IRA at Fidelity, IRA, IRA at Charles Schwab.
00:24:20.880 -->
00:24:26.240You do not have to close down that entire account in order to self-direct here at directed IRA.
00:24:26.400 -->
00:24:32.079In fact, I would say it probably suits at most people best to have at least two IRAs.
00:24:32.319 -->
00:24:37.680Have an IRA at Fidelity or Charles Schwab that you can buy your stocks, bonds, and mutual funds in.
00:24:37.839 -->
00:24:42.000And then have an IRA here at directed IRA that you can buy your alternative investments in.
00:24:42.160 -->
00:24:44.720There's no limit on how many IRAs you're allowed to have.
00:24:44.799 -->
00:24:47.519I have a client that has 35 IRAs.
00:24:47.680 -->
00:24:48.000Okay.
00:24:48.319 -->
00:24:52.319I don't, I'm not suggesting you need 35, but you might need at least two.
00:24:53.119 -->
00:25:03.759Having two IRAs at custodians that let you invest in different things, public assets over at Fidelity, private assets with directed IRA, that really gives you true diversification, right?
00:25:04.000 -->
00:25:07.279So I you don't have to break down your entire IRA.
00:25:07.440 -->
00:25:11.680All we have to do is you open an account here at directed IRA.
00:25:11.839 -->
00:25:18.319You decide how much you want moved from your Fidelity or Charles Schwab account over to your directed IRA account.
00:25:18.640 -->
00:25:29.839One key point is you want to make sure that whatever investments you have in the Fidelity account or in the brokerage account, you sell so that there's cash that we can transfer.
00:25:30.160 -->
00:25:34.079They can be five grand, 10 grand, 50 grand, 500 grand.
00:25:34.319 -->
00:25:35.680That's for you to decide.
00:25:35.920 -->
00:25:43.680What I usually tell people is just move enough over to directed IRA to purchase the alternative investment that you want to buy.
00:25:43.839 -->
00:25:49.839You don't need a bunch of money over here sitting with us that's uninvested because it's it's just making 0%.
00:25:50.400 -->
00:25:56.160So just move enough money over to purchase the alternative investment you need us to buy.
00:25:56.400 -->
00:25:58.160Now, how much do you need?
00:25:58.319 -->
00:25:59.599What's the minimum?
00:26:00.079 -->
00:26:05.119I I I've seen some really creative investments with very, very small dollar amounts.
00:26:05.279 -->
00:26:08.240It really just goes to how what is your investment?
00:26:08.480 -->
00:26:10.079What are you trying to do?
00:26:10.240 -->
00:26:10.559Right.
00:26:10.640 -->
00:26:23.200If you're just trying to buy a rental property, you might need a couple hundred thousand dollars unless you use one of these non-recourse lenders that has a low I low, sorry, loans for IRAs.
00:26:23.440 -->
00:26:29.680In that case, I can buy a property owned by my IRA where my IRA only has to come in with the down payment.
00:26:29.839 -->
00:26:33.759Okay, so the down payment could be could be negotiable.
00:26:33.839 -->
00:26:37.440It's probably up to the bank on how much you need to put down from the IRA.
00:26:37.599 -->
00:26:45.839So typically those banks want to see 30, 30% down from the IRA if you're doing something more creative.
00:26:46.079 -->
00:26:59.200I had a client do a real estate option with a$10,000 uh option fee paid to a struggling homeowner just to lock up the, just to have the first right to buy the property.
00:26:59.440 -->
00:27:02.880So if for you real estate professionals, you know what I'm talking about.
00:27:02.960 -->
00:27:06.079You sometimes we can make money in real estate without owning the real estate.
00:27:06.319 -->
00:27:08.799We can make money by just controlling real estate.
00:27:09.039 -->
00:27:12.319So one way that we can control real estate is through real estate options.
00:27:12.400 -->
00:27:29.440I know it's a little probably over the head for most people, but long story short, this investor knew how to create this option agreement, sent$10,000 to a struggling homeowner, and that that investment ended up in two years turning into a$297,000 tax-free investment.
00:27:29.680 -->
00:27:40.000So I usually say if you're gonna buy real estate, you at least need enough to cover the earnest money deposit, because that's really where all real estate investments start.
00:27:40.160 -->
00:27:48.160If you're gonna go out and be active and find the real estate that you're looking to buy, you need enough to at least cover the earnest money deposit.
00:27:48.400 -->
00:27:53.039I've seen uh clients just wholesale the contract right after they get it under contract.
00:27:53.200 -->
00:27:58.000I've seen clients take 50 bucks and deploy an earnest money deposit with 50 bucks.
00:27:58.079 -->
00:28:02.079But if you're not an experienced real estate investor, what are some other avenues?
00:28:02.319 -->
00:28:11.039Um, there's multifamily syndications, there's commercial syndications, there's a lot of these investment sponsors that are buyer buying bigger projects.
00:28:11.119 -->
00:28:13.359Uh, they might have an investment minimum.
00:28:13.440 -->
00:28:18.880And sometimes those investment minimums could be 50,000, 25,000, or 100,000.
00:28:19.039 -->
00:28:20.799So it's really kind of all over the board.
00:28:20.880 -->
00:28:24.160It it really just goes back to what are you trying to invest in?
00:28:24.400 -->
00:28:25.759We don't have an investment minimum.
00:28:25.920 -->
00:28:29.039You can invest 10 bucks if you if you have an investment that costs 10 bucks.
00:28:29.279 -->
00:28:38.079So and I know people who went into notes and they bought a distressed note and now they have a$75,000 piece of land in their IRA.
00:28:38.240 -->
00:28:38.400Yeah.
00:28:38.559 -->
00:28:40.480I did a note investment once for$500.
00:28:40.960 -->
00:28:42.079I I've talked about that.
00:28:42.240 -->
00:28:45.759I I had$500 in my Roth IRA just sitting there doing nothing.
00:28:45.920 -->
00:28:55.200Uh I had a uh real estate flipper approach me and and they he only needed$55,000 for this hoarder house that he was buying in Houston.
00:28:55.440 -->
00:29:01.039Now, I already had my money deployed in other notes, but I I liked the deal.
00:29:01.119 -->
00:29:07.920And I and to me, I'm I was just nerding out going, I think I can structure this as a fractionalized note and make this fun.
00:29:08.160 -->
00:29:14.559So, long story short, what did I do with my$500 and his$50,000 loan that he needed?
00:29:14.799 -->
00:29:23.519I went and knocked on the door of four of my friends and I said, Hey, anybody got any loose change in their IRAs that want to partner on this deal?
00:29:23.680 -->
00:29:24.720I've got a great deal.
00:29:24.799 -->
00:29:27.039This this investor in Houston found this property.
00:29:27.119 -->
00:29:28.480It's got a ton of equity in it.
00:29:28.640 -->
00:29:30.000He only needs 55 grand.
00:29:30.319 -->
00:29:32.400That was to buy and rehab it, by the way.
00:29:32.559 -->
00:29:35.35955 grand and um it's a great deal.
00:29:35.599 -->
00:29:41.119So, does anybody want to partner their IRAs with my Roth IRA?
00:29:41.279 -->
00:29:44.240And we can all make 12% on this note.
00:29:44.720 -->
00:29:48.400So we brought in a total of eight IRAs.
00:29:48.559 -->
00:29:56.160One was mine, seven were from three other people, and we listed every IRA on the promissory note as the lender.
00:29:56.480 -->
00:29:58.480It's just called a fractionalized note.
00:29:58.640 -->
00:30:04.319It was still one loan to the investor, it was just coming from seven different IRAs.
00:30:04.480 -->
00:30:08.960This is powerful stuff because you could you can see it you can partner different accounts together.
00:30:09.039 -->
00:30:12.240So it doesn't really mat matter how much your IRA has.
00:30:12.480 -->
00:30:18.079Do you have some other people that you know that have more money in their IRAs and bring them all together?
00:30:18.319 -->
00:30:21.359So uh again, you can get as creative as you want.
00:30:21.839 -->
00:30:24.880Um, I like those kind of deals, but that was my$500 deal.
00:30:25.279 -->
00:30:31.920So am I able to combine a 401k with my IRA to make one IRA?
00:30:33.519 -->
00:30:34.640Not technically.
00:30:34.880 -->
00:30:41.119So um now if you've got a 401k, now did he say solo 401k or I think it was just 401k, yeah.
00:30:41.279 -->
00:30:41.599Okay, okay.
00:30:41.680 -->
00:30:43.359So that's a little bit different of an answer.
00:30:43.519 -->
00:30:49.759Um, so most people who have a 401k, they have it at their employer or former employer.
00:30:50.000 -->
00:30:52.720Um, these plans work a little different than IRAs.
00:30:52.880 -->
00:31:08.400First, if you are still working at a company that has a 401k and you're an active participant in the 401k, and you want to move that money out to self-direct, chances are the company won't let you move the money out while you're still an employee of the company.
00:31:08.720 -->
00:31:15.680So oftentimes you've got to call the company and ask if you can do what's called an in-service rollover option.
00:31:15.839 -->
00:31:20.559Um, rollover just means we're gonna take it out of the 401k and dump it into an IRA.
00:31:20.880 -->
00:31:31.519Now, if you've ever left a job, right, you know that you have to roll it into an IRA at some point because you have separation of service from that company that set up your 401k.
00:31:31.759 -->
00:31:38.799So when you're leaving that company, that 401k typically rolls into an IRA.
00:31:39.119 -->
00:31:41.839So what sorry, what was the question again?
00:31:42.000 -->
00:31:42.720Can you combine them?
00:31:42.799 -->
00:31:44.480Is it can you combine them basically?
00:31:44.799 -->
00:31:47.599Yeah, I mean, you can't combine them because they're two different things.
00:31:47.839 -->
00:31:50.400IRA and 401k are two different accounts.
00:31:50.559 -->
00:31:52.480Uh, can you roll one into another?
00:31:52.720 -->
00:31:52.960Yes.
00:31:53.119 -->
00:31:55.519Can you roll an IRA into a 401k?
00:31:55.680 -->
00:31:56.319Sometimes.
00:31:56.400 -->
00:31:59.759Uh you can roll traditional IRAs into 401ks.
00:32:00.000 -->
00:32:00.559It's weird.
00:32:00.640 -->
00:32:03.440You can't roll Roth IRAs into 401ks, though.
00:32:03.519 -->
00:32:04.799So just keep that in mind.
00:32:04.960 -->
00:32:13.039Uh, but can you move money back and forth from those accounts oftentimes, but you can't combine them as just one account as being the same thing.
00:32:13.359 -->
00:32:14.160Perfect.
00:32:14.319 -->
00:32:20.319Um, what types of investments within a self-directed IRA eliminate capital gains taxes?
00:32:20.640 -->
00:32:21.519All of them.
00:32:22.160 -->
00:32:27.440So that's the beautiful part about buying real estate in an IRA, is an IRA doesn't pay tax.
00:32:28.160 -->
00:32:32.319The definition, the the what an IRA is, it's a tax exempt trust.
00:32:32.480 -->
00:32:34.000So is a 401k.
00:32:34.240 -->
00:32:36.240Tax exempt is the key word there.
00:32:36.400 -->
00:32:38.640It's a trust that doesn't pay taxes.
00:32:38.880 -->
00:32:51.519So if my Roth IRA buys a stock, or say buys Walmart stock for$100 and it sells it for$200, okay, that$100 gain is not taxed because the IRA doesn't have to pay a tax.
00:32:51.680 -->
00:32:53.039There's no tax return.
00:32:53.359 -->
00:32:56.240It's not income to me, it's income to my IRA.
00:32:56.640 -->
00:32:59.680Replace the word stock and put real estate.
00:32:59.839 -->
00:33:01.759I can buy a$100,000 house.
00:33:01.920 -->
00:33:05.519My IRA can buy a$100,000 house and sell it for$200,000.
00:33:05.759 -->
00:33:10.559And the$100,000 gain is not taxed because it's the IRA's gain.
00:33:10.640 -->
00:33:12.000It's not my gain.
00:33:12.240 -->
00:33:15.200So there's no capital gains tax in an IRA.
00:33:15.359 -->
00:33:17.440There's no tax on the rental income.
00:33:17.599 -->
00:33:24.079This is the beautiful part about buying real estate in an IRA, is to eliminate that tax completely.
00:33:24.319 -->
00:33:26.079Um, and then I always love the question.
00:33:26.160 -->
00:33:27.039Uh, you always get this.
00:33:27.119 -->
00:33:29.359Yeah, I'm sure you've got this because you're speaking a lot now.
00:33:29.680 -->
00:33:36.559You ever get the guy in the yellow shirt in the room that says, Why would you ever buy real estate in an IRA when you don't get depreciation?
00:33:36.960 -->
00:33:37.680You ever get that guy?
00:33:37.839 -->
00:33:38.960Yeah, that's one of my favorites.
00:33:39.119 -->
00:33:39.519I love that.
00:33:39.599 -->
00:33:40.480I love that one.
00:33:40.640 -->
00:33:43.279First of all, what is depreciation?
00:33:43.599 -->
00:33:46.640Depreciation is an offset to tax.
00:33:47.440 -->
00:33:50.400So depreciation is great outside of an IRA, right?
00:33:50.480 -->
00:34:01.519If I'm an active real estate investor and I've got some passive income or some self-employment income, I'm looking for every opportunity to minimize the taxes I pay as an individual because I'm a taxpayer.
00:34:02.079 -->
00:34:05.599If I'm buying real estate in an IRA, some people say, why would you ever do that?
00:34:05.680 -->
00:34:06.880You don't get depreciation.
00:34:07.119 -->
00:34:09.920Well, what am I depreciating against if there's no tax?
00:34:10.079 -->
00:34:12.480It's not that I can't use it, there's no need for it.
00:34:12.639 -->
00:34:16.400There's no tax in an IRA, so there's nothing to depreciate against.
00:34:16.639 -->
00:34:22.800So um, but I think that it's great to buy real estate inside and outside of an IRA, but don't get stuck in the box.
00:34:23.360 -->
00:34:29.039So I see a lot of CPAs get stuck in the box because they only think of real estate as a reason to get depreciation.
00:34:29.199 -->
00:34:31.599No, real estate's a great wealth-building vehicle.
00:34:31.760 -->
00:34:34.400Real estate has appreciation and cash flow.
00:34:34.639 -->
00:34:43.440If you can acquire assets that have multiple streams of income and own them in an account that doesn't pay tax, that is a life-changing opportunity for you.
00:34:43.679 -->
00:34:46.480So don't get caught in the box of you know that stuff.
00:34:46.559 -->
00:34:50.239But no, there's no capital gains tax in IRA because an IRA is not a taxpayer.
00:34:50.480 -->
00:34:53.679And to go off of that, which is going to lead me into my next question too.
00:34:53.840 -->
00:34:56.320Um, depreciation's great.
00:34:56.559 -->
00:35:01.760And whenever I get that question, I always ask him, how many deals did you turn down last year?
00:35:02.079 -->
00:35:05.920And usually when they're being smart asses, they they usually say none.
00:35:06.079 -->
00:35:06.320Yeah.
00:35:06.480 -->
00:35:08.079But you know, it's usually like one or two.
00:35:08.239 -->
00:35:10.719P real estate investors are turning down deals every now and then.
00:35:10.800 -->
00:35:13.280And I go, okay, if you're so worried about depreciation, great.
00:35:13.440 -->
00:35:18.079Do all the deals that you can do with your own money outside of your IRA to get that depreciation.
00:35:18.239 -->
00:35:20.960When you run out of money, don't turn down the deal.
00:35:21.119 -->
00:35:22.239Use an IRA.
00:35:22.320 -->
00:35:22.639Yeah.
00:35:22.800 -->
00:35:24.960You don't always need to use your own money.
00:35:25.039 -->
00:35:26.320You can use your IRA's money.
00:35:26.400 -->
00:35:28.400Stop turning down deals, pick them all up.
00:35:28.960 -->
00:35:37.519I would say this there are circumstances where an IRA can use depreciation if we turn the IRA into a taxpayer.
00:35:37.599 -->
00:35:40.079Now, what the heck, what the heck is Nate talking about now?
00:35:41.199 -->
00:35:45.440There's certain circumstances where an IRA can incur a tax.
00:35:45.679 -->
00:35:50.239Now, if my IRA buys a rental property, all cash, there's no tax, right?
00:35:50.320 -->
00:35:52.480I pay no capital gains tax on any gains.
00:35:52.639 -->
00:35:58.400I pay no taxes on no taxes on the uh rental income, or my IRA pays no taxes on the rental income.
00:35:58.719 -->
00:36:05.360But if I want to leverage some other bucket of money, and we kind of mentioned this real briefly, that there's banks that have loans for IRAs.
00:36:05.599 -->
00:36:08.320I was in the mortgage business, I never even knew this existed.
00:36:08.480 -->
00:36:10.239But there are banks that have loans.
00:36:10.320 -->
00:36:17.519They'll actually give a loan to your IRA to help it buy property so that the IRA only has to bring in a down payment.
00:36:17.760 -->
00:36:30.960So, in this circumstance, let's say my IRA puts$30,000 down on a$100,000 property, and my IRA has to borrow$70,000 from a bank, or I just choose to borrow$70,000 from a bank.
00:36:31.360 -->
00:36:35.840The$70,000 my IRA borrows is subject to tax.
00:36:36.000 -->
00:36:40.400Now, don't let this scare you because this is actually sometimes a good thing.
00:36:40.639 -->
00:36:51.599Because this tax now that the IRA is incurring, not you, the individual, it's the IRA, can be offset with depreciation and expenses.
00:36:52.079 -->
00:36:58.079It's only when we bring in the tax that we can start using the normal things that we use to offset the tax.
00:36:58.239 -->
00:37:02.480So it's not necessarily a bad thing that my IRA incurs a tax.
00:37:02.559 -->
00:37:07.360It just means that now I get to use some depreciation expenses to whittle it down.
00:37:07.599 -->
00:37:10.800So it's, it's to me, it's a cost of doing business.
00:37:11.039 -->
00:37:20.239If my IRA, if I've got money in my IRA, will I make more money buying one house all cash, or will I make more money buying three houses with debt?
00:37:20.400 -->
00:37:20.719Okay.
00:37:20.960 -->
00:37:24.880That's a that's a a calculation that you have to make on each deal.
00:37:25.039 -->
00:37:30.079I've seen more people make money on three houses with debt than one house all cash.
00:37:30.719 -->
00:37:40.719One way to avoid that is if you if you're self-employed and you use one of our products called a solo 401k, there's no tax on debt.
00:37:40.960 -->
00:37:48.880So this is some of the fun stuff that we learn here at directed IRA is how how we can strategize or how we can be creative with our investing.
00:37:49.039 -->
00:37:52.559How can we buy larger investments with smaller amounts of capital?
00:37:52.719 -->
00:37:53.039Right.
00:37:53.199 -->
00:37:56.000And how do we minimize or eliminate the tax if we do that?
00:37:56.159 -->
00:38:04.000How can we maximize our profit even when we're using money from banks to help our IRAs acquire more property?
00:38:04.320 -->
00:38:11.039And that goes into the next question, which is this person has two specific accounts, but let's talk about all the accounts we offer.
00:38:11.199 -->
00:38:11.440Yeah.
00:38:11.599 -->
00:38:15.280So that's gonna be Roth, traditional, so your personal accounts.
00:38:15.440 -->
00:38:19.920We're gonna have solo 401ks and SEPS, SEPs.
00:38:20.239 -->
00:38:23.679And we're also gonna have HSAs and ESAs.
00:38:23.760 -->
00:38:24.079Okay.
00:38:24.159 -->
00:38:27.360So those are for accounts that you can use on expenses for today.
00:38:27.519 -->
00:38:27.840Okay.
00:38:28.239 -->
00:38:30.800So we offer all of those accounts.
00:38:31.039 -->
00:38:33.119We're, I always like to explain it to people.
00:38:33.199 -->
00:38:34.880We're no different than a Fidelity or Schwab.
00:38:35.039 -->
00:38:36.480We're a custodian just like they are.
00:38:36.719 -->
00:38:41.440We just follow the IRS rules and we say you can invest in whatever they say you can invest in.
00:38:41.599 -->
00:38:43.599So we're gonna offer all the same accounts.
00:38:43.679 -->
00:38:45.599So I know David asked that one a while ago.
00:38:45.679 -->
00:38:46.719I wanted to get to that one.
00:38:46.880 -->
00:38:47.199Yeah.
00:38:47.360 -->
00:38:52.480Now I will challenge anybody on watching this to prove to me you only need one account.
00:38:52.639 -->
00:38:57.119I have not found anybody on this planet that only needs one of those accounts.
00:38:57.280 -->
00:39:02.559Because if you think about the different accounts we have, we've got accounts for individuals, which are your traditional and your Roth.
00:39:02.880 -->
00:39:07.519We've got accounts for self-employed individuals, which are your SEP and your solo 401k.
00:39:07.760 -->
00:39:17.920If you're self-employed, you should have an item on both menus because you get to stash more money in through the contributions and essentially escape any tax on your investments.
00:39:18.079 -->
00:39:26.880So you should be leveraging the personal plans, the IRAs, and you should be leveraging the employer plans, the solo 401k specifically, is one that I love.
00:39:27.119 -->
00:39:41.599But then we've got the other two accounts that Daniel mentioned that are not retirement accounts, but they're accounts that grow tax-free that you can use the income to pay for health expenses for you and your family and education expenses with tax-free dollars.
00:39:41.679 -->
00:39:44.239And that's the self-directed health savings account.
00:39:44.400 -->
00:39:45.840A lot of you might have an HSA.
00:39:46.159 -->
00:39:50.639If you have an HSA right now, a lot of times employers will set it up for you.
00:39:50.800 -->
00:39:52.719That is not just a savings account.
00:39:52.800 -->
00:39:55.840A lot of people just think it's an account you put money in, you get a tax deduction.
00:39:56.000 -->
00:39:58.639Yeah, that's one of the three tax benefits you get.
00:39:59.039 -->
00:40:01.519But you can also invest HSAs.
00:40:01.920 -->
00:40:10.559HSAs can buy stock, HSAs can buy real estate and other alternative investments, HSAs can buy cryptocurrency, HSAs can buy precious metals.
00:40:10.800 -->
00:40:20.639But the difference between an HSA buying that investment versus my Roth is my Roth becomes tax-free and penalty free once I hit 59 and a half.
00:40:20.880 -->
00:40:27.280My self-directed HSA is tax-free whenever I want to take the money out to cover a medical expense.
00:40:27.519 -->
00:40:36.159Things like prescriptions, acupuncture, holistic medicine, co-pays, dental work, vision, your eyeglasses, braces for the kids.
00:40:36.400 -->
00:40:38.079I had a colleague buy a juicer.
00:40:38.320 -->
00:40:38.880Yeah.
00:40:39.039 -->
00:40:47.920I I've had clients buy pools because they're with tax-free uh income from their HSA because their doctor said for their bad back they needed a pool.
00:40:48.159 -->
00:40:58.880So I mean, it it's wild how many things that you can actually pay, expenses you can pay for that you're paying for, I bet right now with the money in your back pocket.
00:40:59.039 -->
00:41:00.480That's your taxable money.
00:41:00.719 -->
00:41:09.920If you think about it, in theory, it pays, it makes less sense to pay those expenses with the money in my back pocket because I got to make money as a taxpayer first.
00:41:10.079 -->
00:41:16.639So if I've got$20,000 of medical expenses for me, my spouse, and any of my dependents.
00:41:16.800 -->
00:41:20.079So this is not just about who's on your insurance, this is about who's in your household.
00:41:20.239 -->
00:41:28.559So if I've got$20,000 of, let's say, those related medical expenses and I'm paying it all, you know, these are the things insurance doesn't cover.
00:41:28.719 -->
00:41:41.199If I'm paying it out of my back pocket as a taxpayer, that means I have to go make$32,000,$35,000 of income, pay my taxes, and then be left with$20,000 after I pay taxes to pay those expenses.
00:41:41.519 -->
00:41:54.800If I switch my mindset as an investor and I just use my self-directed HSA to make investments, I can make$32,000, say$35,000 in my HSA and none of it's taxed.
00:41:54.880 -->
00:41:59.599So I get to use$35,000, all of it, to pay for those expenses.
00:41:59.840 -->
00:42:04.800I essentially consume more goods with the same amount of money because Uncle Sam is out of the equation.
00:42:04.960 -->
00:42:13.760And the same thing goes with our self-directed Coverdale education savings account, which Daniel mentioned, which is for kids and their education expenses.
00:42:13.920 -->
00:42:27.119So this is the one account that you can have that can buy alternative investments, that you can take the income out of the ESA to pay for that child's education expenses from pre-K through college.
00:42:27.280 -->
00:42:38.079So if you're paying for things like tuition, books, computers, iPads, tutoring, your home internet bill is a qualified education expense in the tax law.
00:42:38.239 -->
00:42:47.280Again, these are expenses most parents are paying with their back pocket hip national money and having to make more money just to pay more taxes, just to pay more expenses.
00:42:47.519 -->
00:42:59.519Again, switch your mindset and start using these tax exempt accounts to invest and use the investment income, tax-free investment income, to pay for the same expenses so that you don't have to pay it with your money.
00:43:00.000 -->
00:43:06.639I have a client in Arkansas that has a$400,000 ESA for his child just by buying and flipping small parcels of land.
00:43:06.719 -->
00:43:14.239Um, but that's a$400,000 tax-free bucket that he can use to pay for any of his son's education expenses for the rest of his life.
00:43:14.719 -->
00:43:15.599All right, perfect.
00:43:15.760 -->
00:43:16.639So I have one.
00:43:16.719 -->
00:43:23.039Uh, if you move funds from a traditional IRA to a self-directed Roth, will that cause a tax event?
00:43:23.360 -->
00:43:28.880And then uh this one, I you know, I've been getting a lot of people asking for investment advice.
00:43:29.039 -->
00:43:32.159We're not here to give investment advice, guys, just to be clear.
00:43:32.320 -->
00:43:36.079Um, can I buy a truck to ride off on my taxes?
00:43:36.400 -->
00:43:40.159Okay, so let's first address the I think it was Roth conversion question.
00:43:40.400 -->
00:43:40.559Okay.
00:43:41.039 -->
00:43:44.639So what he mentioned was it's it's considered a Roth conversion.
00:43:44.960 -->
00:43:51.360So Roth conversions are always a hot topic in in our in our space and other even Fidelity Charles Schwab.
00:43:51.679 -->
00:43:58.880But it's when you have a traditional pre tax account, okay, an IRA or an old 401k, that you haven't paid taxes on that money yet.
00:43:58.960 -->
00:44:03.599It grows tax to Meaning you're going to pay taxes when you start taking distributions.
00:44:03.920 -->
00:44:08.719However, some people like the Roth IRA because the Roth IRA is an after-tax account.
00:44:08.960 -->
00:44:12.400It grows and you don't have to pay taxes on the distributions.
00:44:12.639 -->
00:44:21.679So in theory, if you're going to take a small amount of retirement dollars and make it larger, do you want to pay taxes when it's small, or would you rather wait and pay taxes when it's big?
00:44:22.000 -->
00:44:30.559Most of us don't get this education, but it probably makes more sense to pay taxes when it's small, regardless of what tax bracket you're in when you retire.
00:44:30.800 -->
00:44:42.159So there's this opportunity that anybody has nowadays to pay taxes on some or all of their pre-tax IRA or old 401k and convert it to a Roth.
00:44:42.480 -->
00:44:50.800Now, if you want to take it from after tax, sorry, pre-tax, if you want to take it from a pre-tax account and move it to an after-tax account, you just have to pay the tax.
00:44:51.119 -->
00:44:52.559You don't have to pay a penalty.
00:44:52.639 -->
00:44:58.639It's not a distribution to you, but you're saying to the IRS, I'm going to pay taxes now versus pay it later.
00:44:58.719 -->
00:45:01.280And this is called a Roth conversion.
00:45:01.519 -->
00:45:10.000So how Roth conversions work is let's say you've got$100,000 in your old rollover IRA and you want to convert the whole thing to a Roth IRA.
00:45:10.079 -->
00:45:10.400Okay.
00:45:11.119 -->
00:45:13.920All you have to do is fill out a Roth conversion form.
00:45:14.079 -->
00:45:14.400Okay.
00:45:14.880 -->
00:45:19.360Most of the time, you're just going to see that$100,000 be in your traditional IRA one day.
00:45:19.440 -->
00:45:22.800And then the next day, once we convert it, now there's$100,000 in your Roth.
00:45:22.960 -->
00:45:24.159Well, where do the taxes go?
00:45:24.320 -->
00:45:26.639We don't take the taxes out of the conversion.
00:45:26.880 -->
00:45:30.960That$100,000 is just reported on a 1099 to you.
00:45:31.119 -->
00:45:33.599So it's treated as normal income to you.
00:45:33.760 -->
00:45:36.639Now I know some of you might be a little squeamish right now.
00:45:36.719 -->
00:45:39.599Well, I don't want to pay taxes on$100,000 more.
00:45:39.760 -->
00:45:44.480If you're going to grow it to a million, trust me, you're getting a better deal paying taxes on$100,000.
00:45:44.559 -->
00:45:48.559But here's the key you don't get the$1099 the day you do the conversion.
00:45:48.719 -->
00:45:51.360You get a 1099 after we conclude the year.
00:45:51.599 -->
00:45:55.840So let's say you're deciding do it, you're you want to consider doing a conversion today.
00:45:56.079 -->
00:46:04.639If you did a conversion of 100 grand today, you don't pay taxes on a conversion done in 2026 until April 2027 when taxes are due.
00:46:04.960 -->
00:46:12.000So one, you've got a lot of time to prepare for those taxes because typically it's best to pay the taxes out of your back pocket.
00:46:12.159 -->
00:46:18.000It just comes to you on a 1099, you add it to your adjusted gross income, you pay normal income tax on it.
00:46:18.159 -->
00:46:19.840So there's some strategy there.
00:46:20.000 -->
00:46:24.320Obviously, low income years are better years to do conversions.
00:46:24.559 -->
00:46:26.239Most advisors would tell you.
00:46:26.400 -->
00:46:40.800Uh, if you're self-employed and you're running a loss, I was just having a couple conversations this weekend at a dental event that we were at, and a couple of the new investors were actually just starting their practice and they were showing losses on paper.
00:46:41.039 -->
00:46:42.960So their advisor was a good advisor.
00:46:43.039 -->
00:46:51.199So if you're showing a$50,000 loss on paper and you do a conversion of$50,000, what's negative$50,000 plus$50,000?
00:46:51.360 -->
00:46:52.639You're still at zero.
00:46:52.880 -->
00:47:00.719So there's some better years, obviously, to do conversions because sometimes you can convert at a discount or convert for free.
00:47:01.039 -->
00:47:09.039But I think the biggest thing that should make you decide whether or not you're going to do a conversion is what's the investment going to be?
00:47:09.280 -->
00:47:13.519Does it make sense to pay the taxes before you do the investment?
00:47:13.840 -->
00:47:18.800The investment should be the key indicator as to whether or not you want it owned in a Roth or owned into traditional.
00:47:18.960 -->
00:47:28.239Um, I had a client in Austin, Texas convert a$300,000 traditional IRA and in one year, and his CPA told him he was insane.
00:47:28.400 -->
00:47:30.880He goes, You're in your largest income year.
00:47:30.960 -->
00:47:33.039Why are you doing this conversion this year?
00:47:33.119 -->
00:47:33.920It makes no sense.
00:47:34.079 -->
00:47:38.559You're gonna have to pay taxes on an extra 300 grand this year, and this is your best year ever.
00:47:39.119 -->
00:47:40.960He said, That's not why I'm doing it.
00:47:41.119 -->
00:47:50.480I'm doing it because I found a property with a motivated seller that I can make way more than what the taxes I have to pay up to do the conversion.
00:47:50.719 -->
00:47:59.760So, long story short, he had to pay about 37% in taxes on 300 grand, but he converted everything to a Roth IRA.
00:47:59.920 -->
00:48:05.679His Roth IRA bought a property in Austin, Texas that was a rehab, fixed it up, flipped it.
00:48:05.920 -->
00:48:12.719The property made 72% gain, cash on cash return, 72% in six months.
00:48:12.960 -->
00:48:15.039Who was the smarter person in that decision?
00:48:15.280 -->
00:48:15.599Exactly.
00:48:15.840 -->
00:48:22.079The investor that knew that what he could make on the investment, or is CPA trying to talk him out of doing that conversion?
00:48:22.239 -->
00:48:33.440He essentially has a$1.5 million Roth IRA now and he started with$300,000, but that$1.5 million is tax-free and he only had to pay tax on that$300,000 back in 2014.
00:48:33.840 -->
00:48:34.719All right, perfect.
00:48:34.880 -->
00:48:40.719So what if my IRA buys a property and I want to keep that property personally later down the road?
00:48:40.880 -->
00:48:42.079Is that doable?
00:48:42.880 -->
00:48:43.519Sorta.
00:48:44.000 -->
00:48:53.199Let me let me so any investment in your IRA, when it's owned in your IRA, it can can never be used for personal use while it's owned in the IRA.
00:48:53.280 -->
00:48:54.559So that's one of the restrictions.
00:48:54.719 -->
00:49:00.880The IRS doesn't want us to use the investments inside of our retirement counts for personal use.
00:49:01.039 -->
00:49:04.400So you can't buy the property that you live in and have it owned by your IRA.
00:49:04.480 -->
00:49:06.239You can only buy investment property.
00:49:06.480 -->
00:49:10.079You can't buy a second home owned by your IRA and live in it.
00:49:10.239 -->
00:49:13.280You can't buy a vacation rental and then go vacation in it.
00:49:13.360 -->
00:49:22.239You can rent it, you can have other people stay in there and have it as an investment where they pay the IRA to stay there or be tenants there.
00:49:22.480 -->
00:49:28.559But you, as the account owner, are not allowed to use the property for personal use.
00:49:29.119 -->
00:49:39.599If you do, and I've had clients do this, where you decide, you know, I've got these uh uh properties owned in my IRA, and I really like this one.
00:49:39.679 -->
00:49:40.559I like this condo.
00:49:40.639 -->
00:49:42.159I this is a real story, by the way.
00:49:42.400 -->
00:49:46.800Client had a uh real estate portfolio in his Roth IRA.
00:49:47.119 -->
00:49:48.639Um, he was retired.
00:49:49.280 -->
00:49:52.559It owned a pretty nice condo in Florida on the beach.
00:49:52.960 -->
00:49:59.519He decided he wanted to retire in Florida on the beach, but he really liked this property owned in his IRA.
00:49:59.840 -->
00:50:06.800So he can't stay in the property or or be a be a resident in the property while it's owned in the IRA.
00:50:07.280 -->
00:50:11.280He's restricted from selling the property from his IRA to him.
00:50:11.440 -->
00:50:14.480He can't buy, you can't buy assets from your retirement account.
00:50:14.639 -->
00:50:15.760So what did he do?
00:50:16.000 -->
00:50:19.440He just took a distribution, he just took it out of the IRA.
00:50:19.599 -->
00:50:21.440It's no different than taking cash.
00:50:21.519 -->
00:50:26.400The only difference is we just have to get an appraisal on what the what the distribution amount is.
00:50:26.559 -->
00:50:32.880But essentially what he did is he just titled the property out of the name of his IRA and titled it to him.
00:50:33.039 -->
00:50:34.639So this is just a distribution.
00:50:34.719 -->
00:50:37.440We're not distributing cash, we're distributing an asset.
00:50:37.599 -->
00:50:40.079So here's the cool thing about that story.
00:50:40.320 -->
00:50:45.039Because he owned it in a Roth IRA, he paid no taxes on that distribution.
00:50:45.199 -->
00:50:49.920So he made a ton of money on this condo in in Florida and decided, I want to use it.
00:50:50.079 -->
00:50:51.519How do I do it legally?
00:50:51.760 -->
00:50:53.360Just take it out as a distribution.
00:50:53.440 -->
00:50:56.400But while it's in the IRA, you can't use it for personal use.
00:50:56.880 -->
00:50:57.360Perfect.
00:50:57.519 -->
00:51:04.480And then the further conversions, uh, when do these have to be done by uh before April 15th or by the end of the tax year?
00:51:04.800 -->
00:51:08.239By the yeah, or excuse me, April 15th or December.
00:51:08.480 -->
00:51:09.039Great question.
00:51:09.199 -->
00:51:15.280This confuses a lot of people because they they they think of conversion and associate it with tax filing deadline.
00:51:15.599 -->
00:51:20.239If you want to, it depends on when you want to pay the taxes, what year you want to pay the taxes in.
00:51:20.400 -->
00:51:34.800So if I want to pay, if I want to do a conversion and I want the converted amount added to my 2026 income, I have to do the conversion before 2026 ends because it has to be reported as income in this year.
00:51:34.960 -->
00:51:41.280So if I'm looking to do the conversion for 2026, my deadline is December 31st, 2026.
00:51:41.519 -->
00:51:48.239We have a lot of clients, not a lot of clients, but every, every every year it happens the same way where you get clients that are doing their taxes.
00:51:48.320 -->
00:51:55.119And let's say, let's fast forward in time, say it's 2026 or sorry, 2027, and they go, I'm doing my taxes now.
00:51:55.199 -->
00:51:56.400I need to make some contributions.
00:51:56.480 -->
00:51:58.639I also want to do a conversion for last year.
00:51:58.880 -->
00:51:59.920You missed the deadline.
00:52:00.000 -->
00:52:05.119Yeah, you you're you can't do a conversion in 2027 to pay taxes for 2026.
00:52:05.280 -->
00:52:10.719So the conversion deadline is actually the end of the year, December 31st of every year.
00:52:10.960 -->
00:52:11.280All right.
00:52:11.440 -->
00:52:14.000Well, I don't see any more questions in the chat.
00:52:14.079 -->
00:52:15.360I think we knocked them all out.
00:52:15.519 -->
00:52:15.840Okay.
00:52:16.000 -->
00:52:19.280Um, so if you guys have any more, you can you can ask away.
00:52:19.440 -->
00:52:21.039We've got we've got a little bit of time if you want.
00:52:21.119 -->
00:52:23.920But again, these are you keep us here as long as you want us.
00:52:24.000 -->
00:52:26.880So if there are no questions, you know, we get into short.
00:52:27.039 -->
00:52:31.039But um we definitely want to make sure you guys know about the self-directed IRA summit we have coming.
00:52:31.280 -->
00:52:32.719Yeah, let's pull that, let's pull that back up.
00:52:32.880 -->
00:52:40.559Okay, so just as a reminder, guys, if you want a full day crash course on everything self-directed IRAs, you can you get free tickets.
00:52:40.719 -->
00:52:48.159Okay, just go to SDIRA summit.com or scan that QR code and type in the code SD2026.
00:52:48.320 -->
00:52:49.920That'll get you a free ticket.
00:52:50.159 -->
00:52:50.800Free ticket.
00:52:50.880 -->
00:52:57.199You're saving a butt a couple hundred bucks, but I guarantee you the education is gonna be more, it's gonna more than pay for itself.
00:52:57.360 -->
00:53:02.400So get your free tickets, SD2026, and go to SDIRA summit.com.
00:53:02.559 -->
00:53:16.320And if you guys are interested in setting up a call or booking a call with our IRA account executives, and you decide you want to open an account and start investing into real estate or other alternative investments, use the promo code forum200.
00:53:16.400 -->
00:53:21.119And remember that 495 fee I said every year, you save 200 bucks right off the top.
00:53:21.280 -->
00:53:23.679So it's only 295 for the first year.
00:53:23.840 -->
00:53:34.800Just make sure you use forum 200 and you can scan that QR code to book a call with one of our IRA count executives or go to directed IRA.com and just right at the top, click schedule a call.
00:53:35.039 -->
00:53:40.400And we got one more question, and we'll probably end with this, which is what is the conversion process?
00:53:40.559 -->
00:53:42.400How do we do an IRA conversion?
00:53:42.719 -->
00:53:43.440Very easy.
00:53:43.599 -->
00:53:45.760Just fill out a Roth conversion form.
00:53:46.239 -->
00:53:47.840That's really all it takes.
00:53:48.000 -->
00:53:49.840Um, you set up an account.
00:53:50.079 -->
00:53:57.199Let's say if you've got it at Fidelity or Charles Schwab, you got a traditional IRA there, they've probably got a Roth conversion form for you.
00:53:57.360 -->
00:54:02.079Oftentimes we're seeing clients move a traditional IRA to us and then they do the conversion.
00:54:02.159 -->
00:54:03.039That's fine too.
00:54:03.199 -->
00:54:10.559So all you got to do is is just fill out a Roth conversion form and open a Roth IRA and we'll do the conversion.
00:54:10.639 -->
00:54:12.960It usually takes about 24 hours to process that.
00:54:13.199 -->
00:54:13.679All right.
00:54:13.840 -->
00:54:14.719I think that's it.
00:54:14.880 -->
00:54:15.199Okay.
00:54:15.360 -->
00:54:16.079Yeah, awesome.
00:54:16.239 -->
00:54:16.880Well, thanks, guys.
00:54:16.960 -->
00:54:19.119We'll see you on the next directed IRA webinar.
00:54:19.199 -->
00:54:25.599You can get on directed IRA.com and look for our next webinars we've got scheduled and get those registered early.
00:54:25.679 -->
00:54:26.320So thanks, guys.
00:54:26.480 -->
00:54:27.360Have a good rest of your week.
00:54:27.519 -->
00:54:28.559Bye, everybody.
