May 2008

Broker Builds Business Using Self-Directed IRA Accounts

By Catherine Wynne

Catherine Wynne

"There are twice as many buyers out there" exclaimed Realtor® Ole Dunn in Grand Junction Colorado. Mr. Dunn, after hearing about how he could invest his own IRA in real estate, got to work putting together deals for his and his wife's IRA. "If I am to help my clients I will need to do this myself first" is Ole's belief. After sponsoring a class for his investors, he feels that the idea is gaining momentum on Colorado's Western Slope where there is currently a housing shortage for the incoming oil and gas exploration and drilling industry. He has a lot of clients who are interested in the "real estate IRA" concept and, because of his knowledge and experience in the process, will come to him when it's time to make that IRA real estate investment.

It is a smart real estate broker who realizes, like Ole, that for every client that buys or lists a house there is likely a rollover 401k that can be self-directed in to real estate and other non-traditional retirement investments. Opportunities also exist in real estate offices for bridge loans and second deeds of trust for both the brokers and their clients to expedite real estate deals.

Many individuals are tired of their money taking a ride on the stock market roller-coaster and most of them would be interested in self-direction and the world of investment choices available through brokers like Ole and other knowledgeable professionals. Traditionally most financial advisors have been rooted in securities either through restrictions with the companies they work for or through lack of knowledge about non-security investments.

The IRS states on the FAQ section of their website that "invest in real estate is not prohibited". There are rules, of course, that the real estate be for investment purposes only and that there be no personal use of the property. For experienced real estate investors, this and other rules should not present a problem. The key to investing an IRA in real estate or other non-traditional investments is working with a knowledgeable IRA administrator who provides assistance and education for that first self-directed investment.

We think Ole is on to something. Dissatisfaction with stock market and the desire to own a tangible asset like real estate will create more clients for a real estate broker like Ole as well as satisfied IRA investors, whether it be on Colorado's western slope or anywhere in the country.

Be Your Own Venture Capitalist

You can now invest in a company you believe in, before it goes public. Retirement investors who want to invest responsibly are no longer limited to specialized mutual funds. Anyone can now invest in a private company which shares their passion, whatever that may be.

David Williard, like all retirement investors, wants diversity in his retirement fund and long term growth on his investments. He would prefer to minimize the impact on the environment, while making money. In Williard's case, he has diversified his self-directed IRA by investing in a commodity that is about as green as they come - trees.

Catherine Wynne, president of Entrust New Direction, IRA, explains that with the self-directed IRA, "Our clients who want the freedom to invest in private companies and real estate can transfer old 401(k)s and standard IRAs into a self-directed IRA with us."

Williard used his self-directed IRA to buy shares in a private company - The Bauers Family Tree Farm. The company bought a 260 acre cattle ranch in Costa Rica. The land, which had been clear-cut 50 years ago for cattle ranching, now has 45,000 teak trees on 140 acres. "120 acres is forest that will never be cut down," said Joe Bauers, one of the owners of the Bauers Family Tree Farm.

"We see monkeys, ocelots, armadillos - it's really a jungle."

Bauers and his investors are not planting teak trees as a charitable contribution - they expect a healthy return. In five year increments, some of the trees will be cut down and sold, and the empty areas will be replanted with more teak trees. Williard believes the tree farm is "poised for long term growth."

Williard is part of a recent trend of investors who want to do good while doing well. A growing number of these people are using a self-directed IRA to invest in private companies of their choice.

Entrust New Direction has seen many clients grow their retirement fund while investing where their heart is. Wynne said, "Our clients have used their IRAs to loan money to their church building fund, they've invested in companies who make energy efficient windows, and they can still invest in a green mutual fund, all within their self-directed IRA."

She also noted, "Entrust New Direction never provides investment advice of any kind."

Entrust New Direction's Client Networking Event

Entrust New Direction's Client Networking Event on the evening of March 27th was a smashing success. More than thirty people shared appetizers and enlightening conversation about investment experiences. Bill Humphrey and special guest volunteers demonstrated a typical IRA transaction. Many clients told personal stories about their investing history. One lucky winner went home with a crisp new $100 bill, but everyone went home with more knowledge about self-directed investments. Attendees heard about everything from short sale real estate to Costa Rican tree farms to Costa Rican real estate and much more.

We'd love for you to join our next Client Networking Event. For more information, please join our mailing list by sending an email to events@ndira.com or by visiting our website.

Email Policy

Entrust New Direction values your privacy. We hate spam as much as you. We will NEVER sell, rent or share your email address and you can always stop emails by sending an email to events@ndira.com.

If you want to receive updates on events such as the Client Networking Event, or you'd like to know when we'll be presenting in your area, send an email to events@ndira.com and we'll add you to the list.

Employee Spotlight - Angela Burrows

Angela started life with Entrust New Direction as an office assistant, but it didn't take long for the company to take better advantage of her considerable natural abilities. Now in Accounting, Angela frequently assists clients with everything from opening new accounts to helping Uncle IRA pay the rent. It's no surprise then, that her favorite part of working for Entrust New Direction is that she "always gets to learn something new."

Outside of work, learning is one of Angela's favorite hobbies, along with hiking, babysitting, reading and traveling. She has traveled to almost every continent, spending time across the world in countries from Guyana to Thailand to Germany. Angela has studied six languages, which helps to explain why she picked up the language of accounting so quickly and easily. She hopes to visit Egypt, among other places, where she can experience the cultural artifacts she studied in college.

Book and CDs

Entrust New Direction has completed production on a book and CD set for self-directed beginners and experts alike. The book, called The Do-It-Yourself Retirement Plan: Using What You Already Know to Retire Rich, provides self-directed investors with information on buying and selling IRA-owned real estate, UBIT, how to stay on the good side of the IRS, and even the history of IRAs. The book also provides numerous case studies for nearly every kind of investment transaction.

Also available are a beginner, intermediate and advanced level CD filled with valuable and specific information for investors. The beginner disk introduces self-direction, but also discusses tenants in common, lending and how to invest in real estate with even a small IRA. The intermediate examines concepts like UBIT, entity investment and asset protection. The advanced CD discusses HSAs, self-employment retirement fund options and inheritance.

Please contact us for more information on the CDs or book, available now.

Entrust Upgrades to a Better Banking Partner

Many of you are aware that Entrust New Direction has been in a relationship with Greater Bay Bank for many years. Greater Bay Bank was bought by Wells Fargo 2 months ago, and while we had high hopes for the partnership, we have noticed deterioration in service. Thankfully, The Entrust Group has now developed a custodial bank partnership with United Commercial Bank, which has a better understanding of our requirements and strategies. United Commercial Bank is a 12 billion dollar bank with 60 offices located nationally and internationally. UCB is truly a global banking institution, roughly double the size of Greater Bay Bank in assets and offices and has a national presence.

We will not officially move to UCB until June 2nd. Please contact us with any questions.

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