EP 354 – Staying Out Of Trouble with Nathan Long

This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We close notes, Scott Carson.

Good morning, good afternoon, good evening. Welcome to this episode of the Nut Closure show. As always, excited to be here. I am in sunny San Diego, as I like to call it, Sun Diego. Sun Diego. And actually out at a different event, asset protection event here with Aaron Young at Laughlin Associates. But we're excited as always to hang out with the man, the Myth, the legend CEO of Quest, Ira, Mr. Nathan Long.

Hey, Scott, thanks for having me.

No, anytime. Glad to have it. Look, we already got fan clubs out there. Funny is there's somebody watching this that's actually in the other room rather than watch that.

But anyway, we must be better than the show.

We must be better than the show. Maybe so with who's speaking right now. But anyway, Nate Harris there. Get back to work, Nate. Rudy Willis from California. Our topic today is all about staying out of trouble.

Staying out of trouble. I think being out here, I'm talking about structure and all that. I wanted to talk a little bit about it, you know, like basically what I want to talk about, Scott, is how do we take title to discounted notes inside an IRA and do it safely while not spending too much money on quest fees.

There you go.

So I like it when you spend too much money on quest fees. I'm going to point that out.

Yeah. So does Quincy.

Not my favorite subject, you know, but I want, I think that it's important one because I think a lot of people get confused and I guess what I'm alluding to is the area of what we call in our business checkbook control ira.

Yep.

I think a lot of stuff has been out there for years over the Internet about how the best way to, to buy any assets under a self directed IRA is to form an llc. Make yourself the managing member of llc. Then you can buy and sell whatever assets that you need. Usually the people are setting these up are charging a lot of money for the llc. Don't have a very good understanding of some of the dangers that could occur when that happens.

They're like giving a gun but not providing a gun education course to go along.

That's right.

That's the way I look at it.

Yeah. Good way I say it. So. So one of the things is whenever I try to talk about this, there's some areas always ask is what is it that you really are trying to accomplish? Because if anyone says this is the way to do it, they're. They're probably confused. And a lot of people get confused. They actually think that I'm against LLC and the ira and that's not really what I'm against. All right, so if I could explain the problem and then we can get into the solution.

I think it's great for listening to this on itunes, Stitcher, Spotify, all the podcasting channels. You can always reach out to Quest IRA@questira.com as well too for some more intense questions. And all your staff is absolutely amazing out there as well. But you're welcome. So let's get started with the problem I guess and work from there.

So why is it that we can't form an llc? The problem becomes with who is the managing member of the llc. There are people that are disqualified to the ira and those people include yourself, your spouse, your children and your parents, their spouses and companies. Those people own, control, manage or highly compensated by by definition being the managing member of an llc, you are creating a disqualified person to the ira. But what could be the dangers of that? People have been doing this for a while and I, I know Bob and he didn't get in any trouble with it. Well, the dangers is, is it could be viewed as prohibited transaction, blow up your entire ira, have lots of fines and all of this and pay the.

IRS a lot of fees. Yeah, that's it. We don't want to lose that aspect.

And I always get asked, well Nathan, do you see that happen very often? No, honestly, in the past it hasn't happened that often. But let's look at some current state of the union type of things. Government's looking for money. Did you know that they're looking to collect money?

Yeah, I know that. Yep. They need that. They've hired a lot of hitman. Let's. Let's just say that are guns IRS gunslingers to go out and track you down.

Right, right. And in this particular subject it's a good point for them because the amount they stand to collect can be very large. And so then tuning up for this as I like to say so something different 2018 that's never occurred in the past. In the past a self directed companies we would always report what the value is on a form called a 5498 to the IRS. And we just have to report the value of the account.

Build plenty of those out for our investors.

And that's why do that market value that we deal with. Well, now they're not only having us report the value, but the value and whether it's a single manager llc, it gets a special code. I want to know what the assets are inside of there. There's a reason the government's gathering this information. Yep. So there's the problem. I think that having a LLC in there where you're the managing member, could create a lot of problems for you. So we go back to why is it that we want to do this? And there's several good reasons to have an LLC and ira. One of them is it could be easier to use. It's more accessible to what we call the checkbook. Right. In other words, you've got the checkbook. I need to write, buy an asset. I want to buy a note. I just have to send that wire off or do something like that. You know, I. I'm in control and all of those type of things. So one would be checkbook control, and the other is it could be cheaper on the custodian fee. If I'm. If I have an llc, the custodian charges just to buy the LLC and hold that one asset in there versus buying and selling a bunch of assets.

There it is.

There's a little reason why you'd want one, and there's the reason why I think that they could be a problem, you know. So let's talk about it for a minute. For some people just saying, oh, I want a checkbook LLC because someone told them to is often the answer. Whereas what they're investing in is one note or two notes a year. Right. In that case, maybe direct ownership in the IRA is the better, better way to go. But your more advanced students that are buying a lot of notes and stuff, I think that an entity in there makes sense. And I'm not against the entity. What I'm against is who's the managing member. Just take the time to change the managing member. Make it your brother, a friend, a financial partner, an employee, anybody other than you, your spouse, your children or parents, lineal ascend the descendants or their spouse.

It's like the whole airplane thing. It's going up and down. No, no. And then your, your kids. No. It's like almost like the IRA Macarena, I like to call it.

Right. So one of the ways that we can solve it is to simply put someone else into that managing member, and you can have the checkbook control that you've been desired Right, so that's one way. Another way a lot of your students use is rather than going through the expense of a trust, they use an llc, they use a trust.

Right, right, right, exactly. So trusts are great for notes.

Yeah, trusts are really good. Why? Because they're free. Basically you go fill it out, you file for an ein, right. For banking purposes only, and then that trust can hold those assets and things. Now what the problem with trust is you can't do additional fundings like put money in, but you can just dissolve them and build another trust.

That's the beauty about them coming in and out really quickly. You're not having to pay.

AUDIENCE if you want to see for education purposes only, a trust with some special iron language though, it's a fill in the blank form. Send me personally an email@nathanuestira.com I'm out here in California so it might take me a minute to get to you. And I'll send you a copy of a trust document that's often used for IRAs and that should be a personal property trust. So it should work well for a lot of you. So one of the solutions is just go ahead and have the LLC have the trust fund it the same way, just you not be the managing member or you not be the trustee of the trust. That's one solution. I got another solution. One of them is one way is some of our clients can qualify for something called a solo 401k.

Right? Not everyone.

You have to have self employment income and you have to be able to legitimize that account. In other words, show on your tax return that you have income and make it, cut your contribution to it. If we could do that, we could roll in our SEP IRAs, our traditional IRAs, or 401ks, our 403bs, all of those tax deferred accounts can be rolled in to a 401k which now with that particular account you can hold just direct access. You get the checkbook and it's okay because you're the Trustee of a 401k. You get to break rules that you can't have with the IRAs. You have an LLC in there and be the managing member. Or you could just do direct ownership because you have the chance book of the 401k. The problem is that some people want the 401k because they think it's cool but haven't taken the time to legitimize it.

And we had Rebecca Miller on last Monday, or not last Monday, but two weeks ago for money Mondays and actually, she did a great job the whole episode going through those type of plans. She really did a great job breaking it down. Phenomenal episode. She's good. And every day, it's funny is every time I've been to an office or she was in, we were having a meeting or something like that, she's always on the phone with somebody going through those steps, like six for six, right? She's like, I just got the phone. And it's not a short conversation of 30 seconds.

It's like, yeah, 30 minutes to an hour conversation. Yeah, but those don't cost anything. You call. Have a free consultation with Rebecca. Even if you have a plan with another provider that you maybe haven't got enough information about the education that the Quest IRA specialist have for you is free for you at Note School, whether you're our client or not.

Or do you mean we close notes?

We close notes.

That's all right. It's not the first time you've done it. It's not gonna be the last time, which is okay, Eddie. Eddie and I are good terms. We had a great episode with Bob Repass from Note School. Call it the hell freezes over episode, which is awesome. But anyway, yes, go ahead. So, yes, free consultations for all of our students. And Note Nation out there. You'll be lunchtime.

I'm telling that it won't be the last time, but it's true. I mean, just. Just call up if you have any questions. It doesn't matter if you're with us.

Or with someone else.

It's okay. We want you to make sure that you're getting the education right, to know how to do these things or to use those things.

So we talked about having a trust or having a solo 401k. Is there another option for them? Those are the two major options for them.

Yeah. I think that most of the time, if you're really doing enough notes, you probably want to look at some type of entity in there. You still have the issue with the fair market value. We're going to have to show what's inside it once a year so we can value it quest and those type of things. But it will just ease up your expenses that you'll have a quest. Just make it a little bit easier because, you know, you got to be quick and work the quickest we can the business. But no matter what, it still takes time to tell us to do something.

And go through the steps. Check the paperwork, dot the eyes, cross the T's versus send it all out. Yeah, but you guys, your technology, the website's just so absolutely amazing.

It's getting better all the time.

Better all the time. Steph and I broke it the other day so we spent some time with it figuring out something on. It was a long name on an ira. We fixed it which is great. Phenomenal staff there. Very easy to make ACH payments you can fund relatively quickly.

Go faster too where they'll fund faster.

Right before we dive in the next thing. Is there any questions about staying out of trouble in your IRA with your llc?

Any.

Any questions out there? Rudy Will says I should order the steak, which I probably will be nice except I'm not eating that much steak and I'm not. We're not definitely going to steakhouse. You're. You're a vegetarian. So we're not going to go to a steakhouse and do that in front of us. Just. That's just too, just too rude.

But anyway, you sit there and look at my salad.

You can look at your salad. Yes. And my steak will move and look over at your salad. Want to eat the salad. But anyway, side point anyway is you guys have a huge announcement at the Austin grand opening and we got you got a major announcement. Some big stuff happening here just a few weeks.

We're excited.

Yeah, we should be.

We're switching over. We will be full pledged Trust company come November 1st. We're regulated through the Texas Banking Commission and we change our names from Quest IRA to Trust Trust Company. So that's a big, big boy step for us. We're really happy about it changing from a third party administrator to a trust company. It really doesn't mean too much to most of our clients. Tell you the truth. Other than at the same time we're introducing a lot of new systems and speeding our systems up. Like I said, the ACHs are going to be faster. You'll be able to view your account better and easier coming up. So some of those types of things.

People don't know if you got current investments you don't have to change anything. So make people can make their payments out to Quest ira.

That's correct.

For the benefit of don't do rep to retitle anything still to be able to do that. But it just gives you guys a lot great other options to do some other stuff out there. Yeah.

And we have phone apps coming out that will help too that we're improving and stuff. So if you tried the ACH and you found it to be slow in the past. Try it again coming up. Because they found ways to Speed it up. Tremendously easier.

And it's more advanced every month. Trust me. We make enough payments out through it to our investors. But we love it. Absolutely love it. So that's what's so great. What else is. What other. You got Fright Night coming up here.

Fright Night coming up. I saw someone ask what the email address. My email is Nathan Quest. IRA.com. that's it.

N A T H A N dot com. Everybody out there but you got Fright Night, which is Aug. Sorry. October 25th, I believe.

Yeah. Are you going to come to that?

I am.

You got a story?

I'll have a story. Yeah. I've got plenty of stories. I definitely. I might be surprised. Everybody come as the Green Giant or Shrek or who. Who knows? Whatever. But I've got a secret, secret thing we'll be doing so well.

I'll tell you this. This is one of my favorite events that we ever put on all year long. And it started with the idea that I got so tired of all the gurus talking about how they make so much money and they always do this and always do that, where we all know they made some mistakes. Because I know I've made a lot of mistakes.

I've made mistakes too. Yeah. I mean, you don't learn unless you're making mistakes.

That's what I'm saying. Like. Like you didn't get there unless you made some mistakes. So I want to hear the bad stories. I want to hear where you messed it up. Or the frightening stories. So in October, once a year, we come in, we get the guests and the deal is they have to tell us a story where they messed up. And the idea is, because we can learn a lot more from the mistakes.

Amen.

Than you can. The things that have gone right. And I think that it's important. So it's kind of gotten bigger and bigger. We expect about 500 people this year.

And that's not just blowing smoke. Last year you guys had over 400. Had a great event, catered event, open bar. And then you had an amazing dance party afterwards for everybody to hang out till 10, 11 o' clock at night. But Quincy and I were there and then a few other people shared their stories and it was some good stories and some bad stories. But everything was very learnable and there was some great lessons learned from everybody.

Yeah, I think I like it.

Yeah, you like. You're probably into cosplay. I figured that there. Yeah.

I can't help it.

Christina probably is too. You're probably gonna come in.

She's A little bit upset over the costume this year.

Oh, really? Do you want to share what it is or you can leave it a secret.

I like mine. So. So we're going as John Lennon and Yoko. She has no desire to be Yoko.

That's funny. That's pretty good. That'll be funny to. That's good stuff there. Steph is probably gonna give us something Disney or the Wicked Witch or something like that. I don't know. We're actually going to the event and then we're flying to Vegas for the Halloween weekend, actually.

Wonderful. I knew you had that trip afterwards, so I wasn't sure if you're gonna be one of the speakers there. I knew that they had to ask you.

It's circled, so we're excited about that. But seriously, it's a great event. Great networking. It's a costume contest as well out there as well. So October 25th, I think it's a Thursday night. Right. And the best way to get registered for that is going to quest ira.com and under the right on the website.

You do have to register out there because we are having free food and drinks and so we have to know how many people are coming. So you do have to be registered. Can't just show up at the door like you do at some of the Quest events. Should be a lot of fun. That's like I said, one of my favorite events there.

And of course, you can always find out the other events going on in Dallas, Houston, and our new Austin office too. I'm looking at actually doing a couple events out there. I'm actually going to actually go from doing an online event to a local event to a couple times next year. Just because you begged me to. You begged me to.

You got to see the Vault when you get there.

I know. Oh, yes, the Vault's really cool.

So we got a big vault. You can walk in and put all your notes in there.

There you go. Exactly. Ingrid's running that office. Doing a great job out there with the whole. The staff out there is doing a great job too up there. I know everybody in Austin was excited to see that. And it's just. It's a. It's a beautiful office on the kind of the mid north side off of Anderson Lane. And 183 right before it hits 35. So it's right kind of mid location in Austin, Texas. So once again, guys, you have any questions curious about it, pick up the phone. Call one was it 888-855-FUN IRAS 855-FUN.

IRAS or check out you remember better than I do.

That's because I made mistakes long enough. Yes, yes. There we go. We close notes. Exactly. I'll start calling you some other IRA company. No, I'm just joking there. Anyway, but we're here in San Diego. It's always great to hang out with the Quest crew and I know you guys love this area too. It's fun to come out. So stay tuned for the great stuff. We'll probably have a few more spe on here at the Magnifier. Well, some. I'll probably squeeze Aaron Young out here as well here in the next few minutes, so. But once again guys, thanks for listening to the Note Closure show podcast. If you love what you're hearing, feel free to share it. Leave us a five star review on itunes or just drop us an email at. Scott, we close notes if you love it or love to see a topic as well. So thanks Nathan.

Thank you buddy.

Appreciate it, bud.

Take you.

We'll see you guys all at the top, everybody. Bye. It.