1. the power of
REAL ESTATE
inside your
RETIREMENT ACCOUNT

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

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

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

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

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

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

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

9. takeaway #1
Self-Directed
=
Unrestricted

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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