CREI Partners Webinar: Invest in Apartments using Self-Directed IRA and Solo 401k

All right, well, thank you everybody for joining us for our webinar. First, want to start off with a little bit of background on CREI Partners. So I started this company back in November. I'm still working with CBRE. Over the last 13 years, been working in commercial real estate for CBRE here in Austin. But I wanted to start an investment company that's focused on multifamily real estate investments. So what we do is we provide opportunities for investors to grow and diversify their wealth and purchasing large multifamily apartments. So many people, including myself for a long time didn't realize that you can invest in real estate without having institutional type money. So what we do is we raise money to buy the assets, we'll acquire the value, add real estate. Every property has a property business plan. So we'll execute that property plan and then we'll distribute returns to our investors and then we implement our exit strategy and distribute profits. So this five step process is oversimplifying things, but it's the plan of action that we take to prioritize. One, protecting our investment capital. But two, giving back above normal returns, especially in this environment when there's not a lot of returns to be given. Real estate is an extremely great investment for your money. And we'll talk about the reasons why, both from a standpoint of returns distributions, but also from a tax benefit. So a little bit about me. I grew up in Austin, Texas. My wife Jennifer and I have been married for about 11 years. My son in that picture is hunter. He is eight years old. Lily is going to be turning seven in June and Emma just turned five. We live again in Austin. We were in Washington D.C. for a while, Houston and now back home in Austin. So I told you I'm still with cbre. Really enjoy what I do for my clients here in Austin and supporting property managers on the office and retail side. But on my side gig, it's the CREI Partners. And so what I do is I lead the investment lifecycle and investor relationship. I've got over 12 years, almost 13 years in June in the commercial real estate industry executing over 60 million in assets or capital improvements. We have strong relationships both from living in these markets and knowing the key players to help execute our strategy in Austin, San Antonio and Houston. We're extremely passionate about leading teams and creating welfare our investors and partners. I feel like the more that we can return back to our investors, the more money that they're willing to invest for the long term. A little bit of education background. I have my MBA from The University of North Carolina, Master's of arts in Economics from the University of Oklahoma and then bachelor's in business from National University. So with that, I'm going to introduce Haley. Haley is one, she's grown up in the business having real estate investors and her family. In the last four years she's been working with Quest Trust Company on IRAs. So she is going to be a great person to talk about this investment. And then as you go along, if you can, put your questions in the chat box and then if you're watching on Facebook, go ahead and put questions there and we'll try to answer as we as we go along. So for there, Haley, if you want to take it over.

Hello everyone, my name is Hailey Gantt and I'm an IRA specialist at Quest Trust Company. Wayne, thank you so much for having me on tonight. Wayne reached out to me a couple of weeks ago to see if I could come in and help to provide some education. I know with the world of retirement accounts right now and the volatility of the stock market and just all the craziness in the world, really having a good understanding of all of your investment options for not only your own money but for your retirement account can make a really big difference in your overall wealth building abilities over your lifetime. So today's presentation is called Fundamentals of Wealth Building with self directed IRAs. I know about 2/3 of you in the poll said you had somewhat of a basic understanding of self directed IRAs. So hopefully I'm able to provide you with some good information tonight to really just kind of let you know how to truly maximize your IRA investments or why this is important and all of your different investment options that you have with a self directed ira. So quick little background about me. Like Wayne was saying, I've been with Quest for about four years now. Funny, in June will actually be my four year anniversary of working at Quest. But I come from a family of real estate investors. When I was in kindergarten, my parents quit their corporate jobs, went to Vegas for the weekend and on Monday they dove headfirst in investing into real estate. And that was in 1999, so a little over 20 years ago. So I've grown up around the industry pretty much my entire life. And funny enough, my parents have actually been self directing their IRAs at Quest since 2004. So I've kind of grown up around it. Real estate is, you know, it's all I've known my entire life. So it's a lot of fun now to be able to teach Investors how to use all of these different strategies and their IRA, which gives you really awesome tax advantages and things like that that I will get into in a couple of slides. So if you guys have questions, just drop them in the chat. I'll get a little notification like I am here. Let's see. Can y' all hear now? All right, perfect. Yeah, I think that's an old one. So quick little bit of background to his Quest. We're the largest self directed IRA company in the state of Texas. We are one of the largest in the country. We have a very good reputation among the real estate industry. And that is because our company is founded and owned and run by real estate investors. So you can kind of see in the background of this slide, that's actually Quincy and Nathan, our founder, president and CEO. So Quincy and Nathan are brothers. They founded Quest in 2004 and they basically got into owning a self directed IRA company because they found out about these things, they were interested in it, but they really couldn't find their own custodian. So they kind of just ended up starting their own self directed IRA company. And the company has just grown from there over the last close to 15 years. We manage about $2 billion in assets under management. We have about 20,000 clients nationwide and we've got about 100 employees. About a third of us have the designation of cisp, which is a certified IRA Services Professional. I do hold that designation. And basically in order to get that title, you have to have worked at an IRA company for at least two years and then you take a really tough exam by the American Banking Association. So basically we are nerds and we are experts in all things self directed IRAs. And you know, we're definitely here to help out through the entire process. One of the things that can make you the most successful when you are not only investing, but investing with a self directed IRA is having the right people that can educate you about the ins and outs of the processes. So you want to make sure as you're investing that you align yourself with the right individuals. You know, have the right people in your network, like Wayne, have the right self directed IRA custodian that can help to educate you and kind of guide you through your IRA investments. But one important thing to keep in mind is this disclaimer right here at the bottom. At Quest, we're a custodian. We provide a ton of free self directed IRA education. But what we do not do is we do not give tax, legal or investment advice. So we're not licensed financial advisors. You know, you always want to make sure you consult the right professionals, CPAs, attorneys, people like that, you know, having those other tools in your tool belt, as I like to say. So just keep in mind that this presentation, like any presentation that we give, is strictly for educational purposes only. But that's a little bit about us. Now we're going to kind of get into, you know, why is this important? What is a self directed IRA? So the IRAs that we hold at Quest legally are exactly the same as any IRA that you have at any other custodian. The only difference is the types of investments that we allow you to invest in. So most of your traditional custodians, like Fidelity, E. Trade, Charles Schwab, places like that, they are only set up to allow you to hold publicly traded assets. So at Fidelity, you typically have a financial advisor where they sell some sort of stock or CD or mutual fund for your IRA to be invested in. At Quest, it's pretty much the complete opposite where we allow our clients to use their IRAs to invest into privately held assets. These types of assets include real estate, promissory notes, private placement investments, which is what a lot of the multifamily investments fall under, private entity investments. So I'll talk a little bit more about those a little bit later in the presentation. But there are a lot of benefits to having a self directed ira. Just keep in mind that self directed is really just a marketing term. The IRAs that we hold at Quest legally are exactly the same as any other IRA that you have. Self directed just really means that we allow you to choose your own investments, your retirement account. Some of the various benefits of this is, you know, obviously the first really big one is diversification. So like I was just mentioning, at Quest, you have the ability to have your IRA invested into a completely different class of assets. And not only that, but having the ability to hold private assets in your ira. These assets are actually tangible. They are physical assets. They are not a piece of paper with a value. Maybe like a stock might be where, you know, something happens on Wall street, those stocks go up and down. You don't really have a tangible physical asset behind that backing it up. Whereas if you have your IRA invested into a piece of real estate, or maybe a promissory note secured by a piece of real estate, there's an actual physical, tangible asset there that isn't just going to up and lose its value one day. You know, it might fluctuate a little bit up and down, but real estate is always going to be there and you can't build more of it, you know, can't build more land. So, so you want to make sure that you really have your IRA investments truly diversified by holding different types of assets. Another really big benefit of having a self directed IRA is the tax savings. So tax savings with IRAs go across the board no matter where you have your ira. Your IRA is technically a tax exempt trust that is treated differently by the IRS every year than you are as an individual. So, so as an individual, you, unfortunately we are all taxpayers. So depending on your income, you pay a large chunk of your income back to Uncle Sam each year. Your IRA as it grows from investing over the course of your lifetime, does not pay any taxes. It grows completely tax sheltered either until you go to take out your distributions later at retirement. Typically that's when the money will be taxable. Or if you do some of your investments and maybe a Roth IRA or maybe a health savings account, those accounts grow completely tax free. So no matter how large you grow that account, you could eventually avoid all income taxes and capital gains taxes on the growth within your ira. Another big benefit is social investing. And this typically isn't, you know, a big one that a lot of people think about, but it really is something to consider when you're able to actually use your IRA funds to invest into the community around you. And you can actually see the positive impact that your investment is having on the areas around you. You know, if you have all of your IRA funds invested into stocks, large companies, large like index funds, at the end of the day you don't actually know where your money is invested. Those companies might not be aligned with your ethical or political standings. You know, our actually president of our company, Nathan, he is former military and he actually, before he came into quest, kind of dwelled into his IRA one day and figured finally after going back and forth with his financial advisor several times, figured out that the largest holding in his IRA was Bin Laden Construction and Nathan's former military. This was not long after 9 11. And so this really hit an emotional chord with him and is really one of the reasons why they kind of eventually got into self directing their IRAs. So it's really something to think about, you know, where is your money invested? What impact is that having on the world around you? And is it doing one thing that might not be that beneficial to you or is your money actually working in the community around you where you can see the positive impact that that is having? So not something that a lot of people think of firsthand, but it is Something that does have a pretty big impact at the end of the day. And last but not least, one of the most important benefits here is investing in the things that you know best. So if you're on this webinar, if you're re watching the recording of this, you know you're here because you in some form are either a real estate investor or you're wanting to be a real estate investor. You know, people in real estate are looking to build long term true financial freedom by investing into the things that they are knowledgeable about. So why not use this money that you have sitting in an old 401k, probably not doing much, or sitting in an IRA? Why not use this money that gets these awesome tax advantages to invest into these completely different types of assets that then allow you to shelter these investments from income taxes, capital gains taxes, and really help to diversify your retirement portfolio so you can build more money in your IRA faster through investments that you have more control over. So kind of all of these things added together, you know, are one of the biggest benefits of why we love educating about self directed IRAs. There's a ton of benefits and ultimately at Quest, we want to help you retire wealthier, retire with more money and be able to retire faster through, you know, investments that you have more control over. So all of those things added together, you know, can really have a huge benefit on your long term retirement savings. And just in case that wasn't enough reason for you, here are the tax brackets for 2020. So if you are making decent money, you are paying anywhere from 20 to 25% of your income up to close to 40% of your income back to Uncle Sam each year. Us as individuals will always be taxpayers. You know, you know, there's write offs, there's deductions, but if you're using write offs, you probably already have a large income. So if you think about the opportunity cost of your IRA not paying 20 to 40% of its income back to Uncle Sam each year, then you really have a large opportunity to grow your IRA through these different types of investments and the compounding growth over the course of your lifetime, the next five, 10, 20 years, however long you have until retirement, can really make a huge difference. And you know, we hear a lot of people say, well, I don't have enough money to invest into real estate, I don't have enough in my ira. And you know, one thing that we've really been trained as, you know, just people, is in order to build wealth, you need to earn money, you need to Save money and then you need to invest money. That's ultimately how you build wealth. You know, to put it really simply, lot of people put a lot of emphasis on earning and saving, earning and saving, earning and saving your whole life, and then hopefully by the time you hit 59 and a half, you have enough to retire on. But the reality is, is that doesn't really work for everyone. And you know, not everyone is probably saving what they should be. So at Quest, we like to think about it a little bit differently where instead of earning and saving, earning and saving, put a focus on, you know, take your money that you earn, put it in certain tax sheltered accounts, which I'll get to I believe on the next slide. But learn how to put a little bit of money into different types of accounts that have different benefits. Then invest that money into creative, different types of real estate investments. So you're not just shoveling a bunch of money into a savings account or into an ira, but you're taking a little bit of money, putting it in the right vehicle and then using creative strategies to grow your money and help you build more wealth. So kind of like to put these numbers on here just to really kind of drive it home because you know, we pay a lot of money in taxes. And the reality of it is, is taxes are probably going to go up in the future, probably not going to go down. So moving right along, these are the types of plans that can be self directed. So remember, when I say self directed ira, I'm really referring to all of the types of accounts that we hold at Quest. Because self directed again is just a marketing term. It doesn't really specify the actual type of account. And at Quest, we have seven different types of accounts that you can self direct. So you know, really, to really become an expert in these, call me, set up a consultation with one of our IRA specialists. I am just one of 15 IRA specialists that we have on staff. And our job is to help you understand these different types of accounts that you can make contributions to the different types of investments that you can hold, and ultimately how to use multiple types of accounts together to build wealth in your different buckets of money, as we like to call them. So we break the different types of accounts down into three different categories. Personal plans, employer plans, and specialty plans. Now most of America's wealth will be held typically in the personal plans in some sort of tax deferred account, such as a 401k through their employer or, or a traditional IRA. Now whenever you have a 401k through your employer, or any of the other types of plans, like a 403B thrift savings account, any sort of qualified plan through your employer. Once you leave that job, you are eligible to roll over those funds into an IRA. And nine times out of 10, your employer plan is growing tax deferred, so meaning you know it won't be taxed at all until you actually go to take out the money at retirement, or that's when you pay taxes on those distributions. So whenever you leave your job and you roll over your 401k, most times those funds will roll over into a traditional IRA without any tax implications. Now, all of these accounts can be self directed in the exact same way. Really the biggest difference between these types of accounts is they all have different contribution limits and some of them grow tax deferred and some of them grow completely tax free. So a lot of people have their wealth in tax deferred accounts such as 401ks or traditional IRAs. But for you guys as real estate investors, I really want you to focus on a few types of accounts on this screen. Now, a Roth IRA is a really great account because any money that goes into a Roth ira, it's taxed up front. So you don't get any tax deductions whenever you make contributions. But that's what allows that account to grow completely tax free. Since it's your after tax dollars that start out in the Roth ira, anything that you invest and grow from there is also considered to have already been taxed. So as long as you leave the growth in your Roth IRA until you're 59 and a half and you've had a Roth IRA for five tax years, you can avoid all taxes on all of the growth in your Roth ira. It's a really valuable account. You know, not everyone has a Roth ira. My recommendation to you guys would be if you don't have a Roth ira, get one started. You know, whether it's at Quest or Fidelity, more traditional or self directed, you want to make sure that you're taking advantage of that true tax free growth in a Roth IRA in some shape or form. Now, if you have your funds in a traditional ira, you can actually do what's called a Roth conversion and convert your funds to a Roth ira. Now if you talk to a lot of financial advisors, they might actually advise against this, but because you know, if your retirement account is invested into mutual funds or CDs that are growing very slowly each year, then it might take a long time to actually make that Roth conversion be worth the taxes that you pay. Because whenever you convert your money from a traditional IRA into a Roth ira, you pay taxes on whatever amount you move into the Roth. But anything else that grows from there, now that it's in the Roth ira, grows completely tax free for the rest of your life. And when you pass that account onto your heirs, they inherit a completely tax free Roth IRA as well. Now basically how that money is taxed is whatever amount you convert is added to your taxable income for the year and then you just pay ordinary income taxes on it. But it's definitely something to consider. If you either have like a small IRA that you're looking to grow, or if you have some investments coming up that you think are going to pay off really well, it might make sense to go ahead and convert some of your funds to a Roth ira. That way you can really again take advantage of that true tax free growth. Now most people, their money is in some sort of tax deferred account. But if you're interested in learning more about that Roth conversion, just give me a call or send me an email. I'll have my contact information here at the end and I can kind of tell you some of the things that our clients might consider if they're thinking of doing a Roth conversion. Now those are the personal plans. Here in the middle we have the employer plans. So these plans are also really important for real estate investors because a lot of you guys as real estate investors have self employment income. If you have self employment income, these three plans in the middle allow for much higher contribution limits. The two that I'm going to kind of focus on here is the SEP IRA and the Solo 401K. To be honest, the Simple IRA is not simple at all. It's pretty complicated. And in my four years at Quest, I have only ever set up one simple ira. So they're not quite as common to be self directed. But the set IRA is a really great account for because, you know, like tax wise, it's basically just like a traditional IRA where when you put money in, it's tax deductible, it grows tax deferred. And then whenever you go to take out your distributions later at retirement, that's when the money is taxable from a SEP ira. But what's really cool about the SEP IRA is the contribution limits are very high. With the SEP IRA you can contribute 25% of your earned income that you pay yourself up to $57,000 for this year. So if you're self employed and you're looking for a way to dump a lot of money into an IRA this year. Or if you're looking for a way to minimize your tax liability, a SEP IRA contribution could be a really great way to do that. Now the Solo 401k is another pretty complicated plan, but it comes with a lot of benefits if you are self employed with no W2 employees and then you're eligible to open up a solo 401k and make contributions into this account. Now, as far as how much self employment income you have, doesn't really matter if you have self employment income. You know, I'd recommend talking to a tax advisor or maybe even a tax attorney because the Solo 401K is a much more complicated account. Again, it comes with a lot of added benefits, but it also comes with a lot of added responsibility. Basically, with the Solo 401K, we sell you the plan documents and you actually act as your own trustee of that account. So Quest does not actually act as the custodian over your solo 401k. You are your own trustee and administrator. So you know, it does take the right due diligence, the right research, the right record keeping to make sure that you do the right things each year to keep your solo 401k in compliance with the IRS. But the solo 401k allows for much higher contribution limits, same limits as the SEP IRA. You do actually get the checkbook with with the Solo 401K. So that's a big benefit there because again, you're acting as your own trustee over that account. But what's really cool about the Solo 401k is the only account that gets this is, you know, I won't get too into the weeds on this because I don't have that much time tonight, but there are certain instances where if you invest your IRA into debt leveraged property, or an entity that is owning debt leveraged property, that could actually trigger a tax within your IRA called UBIT or unrelated business income tax. The Solo 401k gets an exemption on UBIT does not have to pay UBIT when the 401k is invested into debt leverage property. So if you're savvy, if you have self employment income and if you're using these accounts to invest passively into multifamily deals, give me a call. We can talk a little bit more about the Solo 401k and we actually have about an hour long webinar on our website exclusively over the solo 401k. The pros and cons, benefits, things like that. But that Account is really valuable. It just kind of takes the right person to kind of take on that responsibility. So got the employer plans knocked out of the way. And last but not least, these two over here on the right, the specialty plans. These plans are very underutilized, but I personally think that they are some of the best plans that we offer. Because the Health Savings Account and the Coverdell Education Savings Account can be self directed just like all of our other IRAs. But you can access the distributions completely tax free before you're 59 and a half without any penalty. How do you do this? The Health Savings Account grows completely tax free and you can use those distributions to pay for your qualified health expenses. So if I go to the doctor, if I have glasses, if I go to the dentist, I can pay for all of those expenses completely tax free from my Health Savings account. Or say if I have kids or grandchildren, nieces, nephews. I don't, I have dogs. So not yet. But if you have kids out there, you can self direct a Coverdell Education Savings Account just like all of these other IRAs. And those distributions can be used to pay for your children's qualified educational expenses completely tax free. So these two accounts are really valuable. They're kind of underutilized because the contribution limits are fairly low. But if you guys are creative, you know how to use these accounts, you know the things you can and can't do with them. These accounts are really valuable because they can be self directed just like all of our others. But you can access those distributions without any penalties, completely tax free. Before you're 59 and a half. When I kind of talk about having your different buckets of money that you're putting money into and growing multiple buckets of money, completely tax deferred or tax free. This is exactly what I'm referring to. You know, you're not really limited to the number of accounts you have. You are limited in your contribution limits for each year. But you know, you can have a Roth ira, traditional ira, a SEP ira, a Health Savings Account. You can have all of these different types of accounts that you have different buckets of money growing in each one. And what's really valuable is you can partner all of these accounts together and kind of like aggregate your money. The actual accounts will stay separate, but you can use the funds together to self direct. And then the profits from those deals will just kind of go back, you know, pro rata to each IRA based on how much it owns in that deal. But you can use all of these different types of accounts Together to grow money completely tax deferred or tax free. And that's kind of keeping it very brief with the types of accounts. Normally in a lot of our presentations, we could literally spend 30 minutes on that one slide alone. Because really knowing how to best utilize a self directed IRA or all of the different types of accounts that we have, really comes down to knowing the types of accounts that you can put money into, the ones that you can use, and using multiple types of accounts together for both you and your immediate family. So I am not going to go into the contribution limits for each specific account if you're interested. I mean, take a picture of this slide. But I left this in here because this slide has both the 2019 and 2020 contribution limits. In any other year. Today is May 14th. So in any other year, if we were past the tax filing deadline, which is normally April 15, you would no longer be eligible to make your 2019 contributions. However, this year with since all of this craziness, since they have extended the tax filing deadline to July 15, you can actually still make 2019 contributions to all of these accounts. So if you haven't made your contributions, or if you're looking to open up some of these types of accounts and put as much money as you can in there, get your 2019 contributions in before July 15, and you could potentially double up all of your contributions right now. So just kind of wanted to leave that in there, you know, those are the contribution limits. If you have more questions, just let me know after the presentation. But again, what types of accounts can be self directed? All seven types of accounts. So now that we know the types of accounts that can be self directed, how do you know the best type of account for yourself? Now, whenever you set up a consultation with Quest, and our consultations are always free, it's always free to call us and pick our brains and you know, get all of this information answered for you. But these are some of the questions that we're going to go through with you to kind of figure out what types of accounts you might be looking at, what you qualify for. And this includes, you know, how are you funding your self directed IRA? Are you making contributions? If you are 100%, everyone should have a Roth IRA. You know, if you're rolling over funds from a 401k, those roll into a traditional Iraq. But then if you wanted to, you could do that Roth conversion that I was mentioning and move the funds into a Roth IRA to take advantage of that true tax free growth. So how are you funding your account do you have self employment income? Have you done some research about the Solo 401K? Do you qualify for a health savings account? I didn't mention this on the previous slide because I can literally talk about these types of accounts all day long and I pretty much do. But with the health savings account there are certain qualifications that need to be met in order to make contributions to an hsa. These are the main one is you have to have a high deductible health plan through your health insurance. So you know a lot of people that might determine whether or not they're eligible to make contributions to an hsa, but a lot of people might have an HSA through their employer and have no idea that they can self direct it. So you have to have a high deductible health plan, you can't be on medicare and you can't be claimed as a dependent on someone else's taxes. So again the main one is having that high deductible health plan. But just kind of an important tidbit there that I did leave out previously. Do you have kids or grandchildren with educational expenses? You know you can open up a Coverdell for your children, your grandchildren, nieces, nephews, anyone under the age of 18 can have contributions made to their Coverdell education savings account. So these are just some of the questions that you know, you might want to ask yourself that we're going to take you through just to really see which types of accounts you may be interested in. Self directing. And these three things right here, these are the three methods that we typically see people, how they fund their accounts. So one of the big ways we see accounts funded is rolling over funds from a 401k or employer plan. Now most times in order to be eligible for this, you do have to typically have left that job. So if you're still employed where you have your 401k, more than likely you do have to leave it there until you no longer work at that company. But what you could ask your plan provider is if they allow for an in service rollover. Basically it's a fancy way of saying I still work here. Am I eligible to move these funds out to an ira? You know, most times you can't, but sometimes you're eligible to just kind of depends on how they have that plan set up. You could transfer funds from another ira. If you have an IRA like Fidelity or E Trade, any of those other custodians out there, you can transfer the cash back and forth between your IRA accounts pretty much at any time. Now since we hold different types of investments than most traditional custodians. The actual investments themselves won't be able to transfer back and forth between Quest and Fidelity or vice versa. But basically, depending on where you're wanting to use your funds at the time, you can just transfer cash from one IRA to another. Say if you have a self directed investment coming up at Quest, just transfer some more of your funds over to Quest. You don't have to move every everything, but you know, you really want to stay diversified, so you want to just make sure you have your money working for you wherever it is. And last but not least, making contributions from your own personal funds. Whether you don't have an IRA or you have a small IRA or you're looking to start one of these types of accounts, there's a lot of ways you can make contributions. And again, it's not about how much you can shovel into an ira, it's about knowing the types of accounts that you can self direct and utilize and doing creative investments with those funds to help your money compound and just grow on itself over the course of your lifetime. Roth Conversion considerations these are just some of the things you might want to keep in mind. Not going to go too far into this, but you know, do you think tax rates are going to go up or down in the future? I'm not. I don't have a crystal ball, but I probably don't see them going down in the future. Do you expect to be in a lower or higher tax bracket whenever you retire? So traditionally speaking, when IRAs were created, the reason that they grow tax deferred is because later when you're in retirement and you're no longer working, typically you'll be in a lower tax bracket. So that's when you can pay the taxes on that money. However, I know myself as a real estate investor. I personally don't plan on being in a lower tax bracket when I'm older. You know, I want to have true wealth and financial freedom, which unfortunately probably does not involve being in a low tax bracket. So maybe something to consider if you're in a low tax bracket this year or a lot of people's IRAs have taken a hit with the stock market going up and down a couple of weeks ago. So just some things to consider there. If it might be a good year to do a conversion for you. Will it increase your tax bracket, Social Security, things like that. And last but not least, whenever you pass on your Roth ira, you pass on that account completely tax free. Any of these other IRAs can be inherited, but they your heirs will have to pay taxes on those. So just kind of some things to consider. Give me a call if you have more questions about that. Oh, and most importantly, what are your projected gains on your investments? You know, if you start out with say like 20 or $50,000 in an IRA and by the time you hit retirement you're planning on growing that money to like a million dollars, it might make sense to go ahead and do that conversion while the funds are at a lower value versus essentially creating a large tax liability for yourself down the road where you could have paid the taxes on the acorn versus the money tree as kind of we like to say little metaphor there, but give us a call. I'm one of 15 IRA specialists. That's my email there, but I'll have it again at the end of the presentation. Restrictions, the fun stuff. So now that we know the types of accounts that we can self direct, I hope y' all's brains are turning right now. Kind of thinking of all these cool ways that you can use your IRA that you weren't really previously aware of. But you know, unfortunately there are some restrictions that are definitely important to be aware of. We break these down into three different categories. I'm not going to spend too much time on these tonight. I do have several slides, but I'm kind of going to breeze through them a little bit. But I'll give you the overall kind of conceptual understanding of what these restrictions are Basically, since our IRAs get these really awesome tax advantages to help us save for retirement and to give us incentives to save for retirement. The IRS does not want you using your IRA to do an investment that personally benefits you right now. So, you know, some of the things you can't do. You can't use your IRA to loan money to yourself. You can't use your IRA to invest into your own business or if you currently own an investment in like your own name or your llc. You can't use your IRA funds to fund into your own investments that you already hold title to. Investments between yourself and your IRA definitely need to stay at arm's length, as we like to call it. You cannot commingle your IRA funds in your own personal funds. Your IRA investments are to benefit your retirement account, to help grow that IRA to help you save for retirement. And your investments are what pay you and feed you today. So the main restrictions to be aware of are really just the people restrictions. The transaction restrictions are just the things that certain people cannot do back and forth with the IRA and Investment restrictions. Funny enough, there's only two things that the IRS says you cannot invest in with an ira, and that is life insurance contracts and collectibles. So, you know, since the 70s, since IRAs were created, you've actually had the ability to hold all of these different types of assets in your ira, except for the two things they say you cannot hold. Life insurance contracts and collectibles. Really, just a lot of people aren't aware that you have this ability to hold privately held assets in your IRA because they haven't had access to the right education. You know, quest is one of the things that really sets us apart is the amount of education that we do. You know, until COVID 19, we attend and host about 600 events a year. Those, of course, have all moved to online now. But, you know, our clients need to be educated properly in order to really be successful in their IRA investments. So we go to great lengths to educate about all of these different types of things, including the things that you can and cannot do. So, you know, a lot of people just really haven't had the access to this right education. But as far as the people restriction goes, there are certain people that are considered disqualified people to your IRA that cannot benefit from your IRA investments. The main person who is disqualified to your IRA is yourself. I can't use my IRA to invest into my own business. I can't loan myself money. I can't use my IRA to buy a property and go live in that. That's a clear personal benefit. That's no longer just benefiting my ira. And if I'm personally benefiting from my IRA investment, that would be considered a prohibited transaction. And if you get caught, it could blow up your entire ira. So very important to be aware of these rules. But there's really just a few people that are disqualified to the ira, and that is yourself and a few other family members. And they are all on this chart. But ignore the chart. Doesn't matter. A lot of people are like, let me take a picture of this. But, you know, the people that are disqualified to your IRA are yourself and your spouse, lineal ascendants and descendants. So your parents and kids, grandparents, grandkids, their spouses, and any companies that these people own, control, manage, or highly compensated by. So it's a very small list of people that are restricted from doing certain investments with your ira. You, your spouse, parents, kids, their spouses, and any companies that these people own, just as disqualified as the individual. And the things that these people cannot do is they cannot buy properties from the ira, they can't sell properties to the ira. The IRA cannot loan money these funds. So, you know, I can't use my IRA to loan my mom money or loan my kids money. They are disqualified people to my ira. So I'm restricted from doing those types of investments just with those certain family members extending a service. Basically, if you own a property with your ira, you can't go out and, like, physically do the work yourself. Remember, things need to be kept at arm's length. And so, you know, it's just those few family members that are restricted. But at the end of the day, you know, the main thing to consider is you, as a disqualified person, cannot personally benefit from your IRA investments. If you have more questions about that, just give me a call and I can kind of help to walk you through it, especially if you have, like, a particular scenario. You know, we can't give you investment advice, but we can tell you if it's allowed or if it's not allowed. If it's kind of skating a gray area, we'll kind of let you know there as well. So let's see. No questions. I hope you guys are enjoying this so far, but moving right along. So what I always like to tell people is, you know, a lot of people get really bogged down in their restrictions. They think, I know enough to be dangerous. I hear all of these things that you can't do, but it's really just certain family members that can't do certain things back and forth with the ira. But I always like to say, once you know, this small list of things, the smallest of people that cannot do these investments with your ira, there is a whole world of opportunity out there to work with other people, other individuals in your network, other investors, and doing all of these different types of investments that your IRA can hold title to. So definitely don't get bogged down in the restrictions because, you know, just avoid those few family members. And there's so many other ways that you can build a lot of wealth almost completely passive within your Iraq. So the different investment options that you have at Quest, we break it down into three different categories. This would be real estate, which is like the direct ownership of real estate or land or investment properties in your IRA account. Believe it or not, by a small margin, real estate is actually the smallest class of assets that we have at Quest by a pretty small margin. But the reason behind this is because real estate is a lot more active investment. Whenever you need to be arm's length from your ira. And there's a contractors Work that needs to be done, payments that need to be sent out. All of that has to be done by your IRA and by Quest sending those payments in and out. So it can be a little tedious. You know, it can be pretty lucrative because all of the capital gains are potentially completely tax free within that account. But the truth is, a lot of people like to use their IRAs to be completely 100% passive. And that's what falls into the other two investment categories, which is private entity investments and promissory notes. And I am so sorry if you guys hear my dogs barking in the background. Hopefully it's not too bad. But anyway, so moving right along, private entity investments is the second largest class of assets that we hold at Quest. This includes investments into private placements, privately held companies, private bank stock. And a large part of this is passive investments into commercial deals and multifamily investments. So a lot of times the way that these will be structured is that there is a deal syndicator or, you know, someone who is managing the syndication, and that syndicator raises private capital from other people's IRAs. So a lot of people like to use their IRAs just to invest completely passively into these multifamily or commercial deals where someone else is managing that investment and then their IRA is just kind of a passive shareholder in that deal. We see a lot of people like these types of investments. We see a lot of success with these types of investments. But always want to remember, do your own due diligence. You know, just because you can do an investment with your IRA doesn't mean it's going to be a successful investment. You always want to do your due diligence, just like you would if you're using your own personal funds. You know, align yourself with the right people. Watch these, you know, right. Webinars, you know, to make sure that you really set yourself up for success. And the second kind of part of being passive with your IRA is promissory notes. So promissory notes is about 50% of the transactions that we fund at Quest. A lot of our clients like to use their IRAs, again, to be totally passive. Private lenders, you know, loaning money to other real estate investors or even purchasing like existing notes inside of the ira. But, you know, private entities, promissory notes. A lot of people like to be passive. And to be honest, most of our clients are not full time real estate investors. There's just enough people out there that are smart enough to realize that what they're doing with their retirement, their Current saving strategies are not going to get them where they need to be by the time they hit retirement. You know, if you've been doing everything you've been told your whole life, there's a good chance even with doing that, you probably haven't saved enough for retirement. So and that's if you have been doing everything right. If you maybe lost your job at some point, took a distribution, you never started an IRA or you just never made a lot of contributions, self directing your IRA can be a huge game changer for you because it allows you to invest into all of these different types of assets that have a much larger opportunity for growth through secure, tangible investments. So those are the different types of investments that we hold. You know, at Quest, we can't tell you what to invest in. It's totally up to you. But you know, that's the beauty of it. You get to go out, build your network, figure out how the deals are going to be structured, and then basically once you find the deal, you just submit those investment documents to Quest that show your IRA taking title to that investment. And we basically process the paperwork and fund that investment with your ira. And then your IRA holds title to that asset. Whenever you do that, all those profits come back into your ira. You don't receive them personally. So you know, they do go back into your ira, but they go back in without being taxed. So really great way to grow your retirement and shelter certain types of these investments from your own income taxes and capital gains taxes each year. So real estate kind of already covered that, Promissory notes covered that. You know, private entities includes joint ventures, trust investments, llc, limited partnerships, you know, private bank stock, private businesses. We see a lot of these types of investments and you know, again, ultimately it's just up to you as far as what you choose to invest in. Ooh, and I jumped way ahead. So these are the steps to get started, really. You know, if I can give you one piece of advice, having a good relationship with your custodian and having a good relationship with an IRA specialist such as myself, where my job is to literally educate you about this entire process and hold your hand through the process of learning how it works, figuring out what types of accounts you want to self direct. Then ultimately, once you decide that this is the route that you want to go, an IRA specialist such as myself will help you open up your account. You know, we'll hold your hand through the whole process. We'll help you get it opened up, we'll help you get it funded, and again, you can fund your account either by rolling over those funds from your 401k, transferring from another IRA, or just making new contributions so you can start saving more for retirement. So we'll help you get it started, we'll help you get it funded. Then basically, once you get it funded or once you're kind of going through that process, it's time to start figuring out what you want to invest in. Keep in mind, at Quest, we hold privately held assets. It is a self directed ira. So it does involve a little bit more work on your end because you do actually need to find the investments for your ira. But again, it really does give you a lot of freedom to choose where your investments are held, how they're structured, and ultimately how they are secured by a piece of real estate or something like that. So once you find your investment investment, give us a call. We'll walk you through those investment instructions. And our transactions team at that point will be a great main point of contact for you. They'll make sure that we get all of the documents that we need from you. They'll make sure that your IRA has been titled correctly. They'll make sure that you signed in the right place. You know, again, we don't review things for legalities. You want to make sure that you've done that due diligence. But we'll work between you and your investor or like syndicator or the title company, whoever you're investing with, we'll work between you two to make sure that that funding is a smooth and easy. And one thing that really sets Quest apart is our turnaround time. So we fund investments very, very quickly. 24 to 48 hours from the time that we receive your investment documents. We'll have the fund sent out for that investment. So it's a very quick turnaround time. And you know, we are real estate investors ourselves. I think almost all of us that are IRA specialists or hold higher titles are all real estate investors. So we have created our processes because we think like real estate investors. So we make things really easy on you. And again, if you just talk to some other investors that have heard of us, we have a pretty good reputation among the industry. So how can I profit now? OPI and ladies got to make the joke. It's not nail polish, it's even better. It's other people's IRAs. So other people's money, of course, better, at least in my opinion. But you know, there's kind of two different sides to what we do at Quest. This is one of the reasons why Wayne brought me on today because, you know, a lot of people out there are looking for smarter ways to invest their retirement accounts. But there's also a lot of people out there looking for private capital for their deals. So you, when you know how to use other people's IRAs as private funding sources for your deals, once you kind of know how to introduce that conversation of oh, do you have an ira? Did you know that you could use this Iraq to invest passively into real estate investments if someone's interested in that, all you have to do is know how to start the conversation, build the rapport, build the network just like you normally would, and know how to introduce the concepts. And normally once you do that, they're probably going to look at you like you're crazy because a lot of people have never heard that you're able to do this. To be frank, they might not know if they can trust you or not. So at that point, bring in an IRA specialist in on the conversation. Bring in quest. You know, we're a neutral third party. We're here to be a good resource and, and educate and answer all of the questions. And that's really reassuring for a lot of people. So if you're out there looking for private capital, know how to introduce the conversation. You know, I would even recommend, give me a call and I can kind of walk you through the exact process of how it works so you yourself have a better understanding as you're going out and you're trying to raise capital for your deals. There are close to 30 to $40 trillion trillion with a T in American retirement accounts. Only 2% of this money, the entire country is self directed. And it's not because people don't want to do this. It's because they've probably never heard of it before. So, you know, just like you guys are probably looking to diversify your retirement portfolio if you go out there and you start talking to people, there are a lot of people out there that are not happy with their current retirement savings plan. You know, they've probably been burned or slapped in the face by the stock market, especially recently. And you know, we are seeing a lot of people that are looking for other investment options out there. So, you know, you can use your IRA to save money for your retirement, get tax advantages to help you save for your retirement, but you can use other people's IRAs to fund your deals. Today you pay those, you know, principal and interest payments or whatever you guys agreed upon back to their ira and you potentially now have unlimited sources of private financing for your deal. I was reading an article the other day, actually, I know I keep mentioning Fidelity, you know, not affiliated with them at all, but they are one of the largest IRA custodians out there. Fidelity alone has over 30 million IRA accounts or IRA and 401k accounts. That's just one custodian. And so there's a lot of money in IRAs out there that's looking for better places to be invested. It's just kind of up to you guys to start that conversation and then, you know, kind of have a good point of contact at that point that you can refer people over to to kind of help fill in the gaps and the logistics and the intricacies from there. So this is exactly what this is. You know, borrowers, people raising private capital. It creates your own private financing source. Raising money from other people's IRAs is a great source of private capital for your deals. And you know, to sum it up really, this is like one of the best slides in my opinion. Use other people's IRAs to meet your needs for today, use your IRA to meet your needs for tomorrow. Know the different buckets of money that can be used. Know the rules, have a good point of contact that you can call when you're not sure of something. And we can kind of help to walk you through everything. So wrapping it up, key points to remember. It's not about how much money you make, it's about how much money you keep. You want to make sure you have at least some of your money growing completely tax deferred or tax free in these types of accounts. Self directed retirement accounts are a tax exempt vehicle that every real estate investor should have 100% agree with that statement right there. And again, reiterate it one more time. Self directed IRAs are a great source of private capital, you know, especially today, you know, if, you know, a pandemic hits and all the Wall street money dries up, a lot of lenders have stopped lending. You want to know where you're getting your money. You want to know the places that you're able to raise capital from. And doing that from other people's IRAs is a great way to do that and utilize your network. I always like to say, have the tools, the right tools in your tool belts. You know, have me for your IRA custodian. You want to have your attorney, your cpa, your title agency, or your insurance. Know the different tools in your tool belt and the needs that they fit. And more than that, I always like to say you want to hold the right types of investments in the right investment vehicles. So some investments might make really great IRA investments. They're going to have a really nice long term appreciation. Maybe you don't need that return today. Maybe it's going to be more like a five or ten year investment. Great investment for your ira. But some investments, you know, maybe like if you're buying an Airbnb that on the beach that you actually want to go stay in, maybe buy that one with your own money. If you want to do an investment that you really want that return right now, today, do that investment with your own funds. Maybe borrow other people's IRA money for that deal. Then utilize certain types of investments, maybe the ones that are completely passive in your IRA account and yeah, use your network, things like that. I know that we are recording this, but for those of you guys that are watching live right now, we're doing a promotion this month for the month of May. If you are watching this recording after May20, I am sorry, give me a call. Maybe we have some other promotions going on. But you know, Quest Cares is our promotion this month. We are actually donating money to 10 different charities all around the Texas area. And to date so far for this month we've donated about $10,000 total to these different charities. So you know, kind of on top of that, we want to help people get started. I know it's a crazy time and I don't want people to feel like held back by our $100 account opening fee. So we're waiving all of our account opening fees right now. Plus if you are self employed or you're looking to make contributions to a health savings account, we're giving you an extra hundred dollar credit there. So that's that promotion. But give us a call, visit our website. We have free consultations all day every day during the week with our certified IRA specialists such as myself. And what's actually really cool is if you go to questrust.com during our business hours Monday through Friday, 8:30 to 5:30 Central Time, we actually have a live chat feature through our website that you can chat live with an IRA specialist. And if you log in on Mondays or Thursdays, you can actually chat live with me right there through the website. So great resource there. We also do a ton of education on our Facebook page. Normally in all of our presentations we always like to include case studies at the end just to kind of like really bring it home, apply it to a real life scenario. But I'm already over on time. Right now without any case studies. So I took those out of this presentation. But we do have several other presentations with all sorts of case studies. We've actually been bringing in clients to present their own case studies in our Saturday classes that we're hosting right now. All of those can be found on our website@questtrust.com if you go there, click on events, click on webinars, you can see our full schedule of upcoming webinars. And if you want to rewatch ones that have already happened, visit our Facebook page, Quest Trust company on Facebook and go to our videos. You can watch every single class that we've hosted pretty much for the the last four years. We started live streaming classes very shortly after I started working at Quest and that was about four years ago. So that's my contact information. Haley gantuestrust.com you can give us a call on our main line, but you know, if you want to reach out to me directly. I do a lot of these presentations but I also am on the front lines. I answer the phones every day. If you ask for an IRA specialist, there's a good chance you might get connected with me, but send me an email. I'd love to connect with you guys. Be a good resource and help to just educate you about your retirement, raising money from other people's retirement accounts. You know, if you have family members that have IRAs, there are so many great ways to build wealth from self directed IRAs. Even if it's not something you're ready to do yet. Start preparing yourself with the right education that way. Once you're ready to go, once a deal comes across your plate, you're not starting from square one. You want to make sure that you kind of build the right foundation building blocks. That way once something comes across your plate, you're ready to move, you're confident, you're good to go and you've already got, you know, at least some of the basics information so you can follow us, we're on LinkedIn, Facebook, Instagram, YouTube, all of that fun stuff. If you go to questtrust.com you can find all of that there or you can send me an email and that's all I've got. I really hope you guys enjoyed this. If you guys are watching the after recording of this, feel free to reach out to me. You know, I love doing presentations like this because it's, it's cool information. It's not like I'm out here selling couches to people, just trying to hit a sales quota. You know, the things that we're teaching about actually truly make a difference in our clients long term ability to build wealth and so many great tools, so many great resources. And you know, I love working with other investors in the industry. That way you know you can guys can meet all the right networks and connections. But feel free to reach out to me. That's all I've got. I think Wayne might come on and give a few last final words for you guys. But if you have questions, feel free to reach out to me.

Haley, thank you so much for spending your evening with us talking about alternative investments. I am going to take over and just do a closeout slide. So one thing Haley hit on was you now know how to invest your funds through IRA or Solo 401 and you know the resources but, but with anything it's really important to be educated on the investments that you are wanting to invest in. And if you do that, then when the opportunity comes, you know the questions to ask. You know how to look at the numbers. And so my hope is that I can provide that provide value to help others look at a deal. I'm focusing with CRI Partners on multifamily investments. So if you're interested in learning more about multifamily investments. Not saying you have to invest with me, but I would love to at least have the conversation with you so that way we can get you more knowledge to whether invest with me or someone else. But I would recommend first going to creipartners.com there's a lot of great information there. There's a resources tab that has a lot of the common terminology. There's some really great blogs that's posted there. The other thing we're going to be doing, this was our first investing webinar for passive investors. Every month we're going to be doing a investing webinar. My hope is the second Thursday of every month and next month really talking about how the real estate tax advantages for passive investing. So be on the lookout for these type of webinars. There's meetups in your city that you can attend. I'm also Posting blogs@creipartners.com blog that gives information. In June we're starting a podcast, the Untold stories of Real Estate Investing. And really this is going to be a fun podcast to listen to because it gives the good, bad and ugly of real estate investing. It's not all cookies and butterflies. You know, there's things that you know, you know there's bad and ugly in it. And so it's, it's really just hearing from those investors, learning from them and from a passive side knowing what what things you should ask for your syndicator to feel comfortable investing. I am going to be post putting out a free ebook and that will be putting on social media for people to sign up. But it's the top five must know tips for passively investing in multifamily. So again it's just another resource to build the knowledge. And then lastly let's connect. There's no obligation. I'd love to build a relationship and assist however I can. Bringing on people like Haley to better connects better helps everybody. Especially during this time where investing in traditional stocks and mutual funds, you know when it's good it's good but when it's bad, it's bad. And when you look at other investments like real estate, you know you have more stability and long term and it's a less risk. And I'd love to talk to you more about that. Email me at waynereipartners.com or reach me at 512-710-2500. But all this information is on the creipartners.com so Haley, thank you so much for for being on today and I hope everyone has a great evening and stays well.