By J.P. Dahdah | Founder & CEO of VantageIRAs

When someone first learns about Self-Directed IRAs, there is a period of time in which the individual investor saving for retirement undergoes what I call the “validation process.” The validation process is the amount of time that the newly informed individual needs to go through to verify that the information being shared with them is in fact accurate and credible. It is natural to be curious and have a lot of questions when you are given information about something that contradicts the validity of the knowledge you felt you had about a topic, in this case, Individual Retirement Accounts (IRAs). Most of us have been led to believe by financial professionals and the financial institutions they represent that our retirement accounts have rules preventing us from investing outside the stock market without incurring tax consequences and penalties. That information is simply not true. So, when we learn that there are accounts called “Self-Directed IRAs” that enable us to have total control over our retirement savings and diversify freely (and without taxation) into real estate and other alternative assets in the private market, we inherently feel the need to “fact check” the information for ourselves. 

Below are the Top 10 Commonly Asked Questions by clients Vantage has guided through their validation process. If you are reading this article and are unfamiliar with Self-Directed IRAs, or perhaps recently heard about them and are currently in your own validation process, we hope the answers to these questions help you gain a new understanding of the fact that your retirement savings CAN be used to invest outside the stock market and into your next real estate deal tax-free! 

  1. What is a Self-Directed IRA? A Self-Directed IRA is the name given to a retirement account that allows you to have total control over your retirement savings compared to traditional Brokerage IRAs (i.e., Charles Schwab, Fidelity, Vanguard, etc.) With a Self-Directed IRA, you can invest in a virtually unlimited array of alternative assets beyond the stock market. The most popular assets held within Self-Directed IRAs are real estate, promissory notes, private funds, and private entities (i.e., LLCs, LPs, etc.). 
  2. Why haven’t I heard about Self-Directed IRAs and the ability to use retirement funds to invest outside the stock market without tax or penalties until now? Individual Retirement Accounts (IRAs) were created by Congress in 1974, and believe it or not, the IRA rules have allowed account holders to invest outside the stock market since its inception. The reality is that almost all IRA custodians and administrators are in the stock market business, so they have no financial incentive to allow their clients to invest in alternative assets that they don’t offer or make money on. A key point to highlight is that there is a big difference between what the Government’s regulations allow IRA holders to invest in and what your IRA custodian’s corporate regulations permit. This is the genesis of where the misinformation began. For nearly the past 50 years, when Americans have asked their Wall Street-based brokerage IRA custodian if they can use their IRA to invest in real estate, the answer has been “No, you can’t” but what they should say is “Not with us, but it is permissible with a Self-Directed IRA provider that specializes in alternative asset custodial services (i.e. Vantage). Unfortunately, this misinformation has been peddled by traditional financial institutions so much and for so long that only 2% of the $35 trillion saved inside retirement accounts in the United States are alternative assets beyond the stock market. 
  3. What investments can I make in a Self-Directed IRA? When the Government created IRAs, they figured it was easier to define what investments are prohibited from purchasing inside a retirement plan versus outlining all the assets you CAN invest in. The reality is that there are only two investment restrictions within IRAs, which are 1) life insurance contracts and 2) collectibles. Other than these two types of investments, an IRA can be used to diversify into any alternative asset strategy you wish. Self-Directed IRAs offer immense flexibility, allowing you to diversify your nest egg into whichever real estate strategies you prefer, without having to pay capital gain taxes while you grow your retirement wealth. 
  4. Are there restrictions on Self-Directed IRA investments? While Self-Directed IRAs offer a broad range of investment options, they do come with rules and restrictions. For example, you cannot use your Self-Directed IRA to engage in transactions that involve disqualified persons, such as certain family members. Any transaction, direct or indirect, between your IRA and any disqualified persons or related parties as defined by the IRS is considered a “prohibited transaction.” The prohibited transaction rules are found under Internal Revenue Code (IRC) Section 4975. Feel free to visit www.IRS.gov to validate this information.
  5. What are the benefits of a Self-Directed IRA? The benefits of a Self-Directed IRA include greater investment diversity, the potential for higher returns, increased control over your retirement portfolio, and the ability to invest in alternative assets that may not be available in traditional IRAs. For those of us who prefer to invest in the private market versus the stock market, the benefit of a Self-Directed IRA is that you can invest in the assets you know, understand, and feel most comfortable with. 
  6. Can I transfer or rollover funds from an existing IRA into a Self-Directed IRA? Yes, you can transfer or rollover funds from an existing traditional IRA or 401(k) into a Self-Directed IRA, as long as you follow IRS rules and procedures for such transfers. You can transfer as much or as little as you choose into your Self-Directed IRA from your existing IRA.
  7. How do I maintain compliance with IRS rules and regulations? To stay compliant, educate yourself on IRS rules, work closely with your custodian or trustee, avoid prohibited transactions, and consider consulting a tax professional or financial advisor with expertise in Self-Directed IRAs. Vantage has been an AZREIA Business Associate for 19 years and we are always available to help members get answers to any questions they may have about Self-Directed IRAs. 
  8. Can I transfer my traditional Brokerage IRA or previous employer 401(k) into a Self-Directed IRA? Yes, you can transfer any amount of money you choose from an existing Brokerage IRA held with a traditional custodian into a Self-Directed IRA by what is known as an IRA-to-IRA transfer. If you have money in an old 401(k) plan with a previous employer, you can transact what is known as 401(k) rollover into a Self-Directed IRA. Again, you can choose to roll over whatever amount of money you want. In addition to these two methods of funding a Self-Directed IRA, you can make an IRA contribution into the account up to the annual contribution limit of the type of IRA you are funding.
  9. Are there any balance minimums to open a Self-Directed IRA? No, you can establish a Self-Directed IRA with zero funds in it. However, we do encourage our clients to consider the impact of the account fees on their IRA balance. You want to make sure that you are making enough money on your investments above the fees you are paying to have an account.
  10. Which types of retirement accounts can be “Self-Directed” and used to invest outside the stock market? All of them. Every single type of IRA and Qualified Retirement Plan (i.e., 401K) can be used to fund private market opportunities. Remember, the key is to establish your Self-Directed IRA account with a company that specializes in alternative asset custodial services, such as Vantage! 

Hopefully, the answers to these questions helped you increase your comfort level about the veracity of the IRA rules established by the Government, not the restricting policies established by traditional custodians seeking to keep your money invested in their products and under their management.

For more information about Self-Directed Real Estate IRAs, please visit www.VantageIRAs.com and be sure to ask for your $25 AZREIA member discount when you open your Vantage IRA account!

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Kevin's Story

“The Launch Pad was exactly what I was hoping for. The deep dive into my expectations through your assessments was very valuable. The plan you provided me for my investment future put me at ease and gave me some reassurances that I am heading in the right direction. Launch Pad is definitely something I would recommend to all new investors. Thank you!”

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“My wife Nicole and I wanted to thank you for the 4 hours of dedicated time you set aside for us. The Launch Pad program really helped us find out what our interests were, and you experience and guidance helped us figure out how to go about achieving our goals! We always thought the recommendation you gave us was unachievable, but after our meeting we realize that it is!

The Launch Pad program was extremely insightful, and we thank you for your input and explanations! Also, we look forward to all the subgroups you recommended we attend.

Thanks again! I highly recommend the Launch Pad to any new investor!!! Thanks to this program, we shaved probably 3 years off the learning curve and countless hours of frustration.”

 

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Kevin's Story

“I took AZREIA’s Launch Pad program with Alan Langston. I found it to be very helpful as a “newbie” to REI.

The program, over 4-hours long, walked me through what my initial strategy and tactics should be for me to reach my goals. It even told me if I should even be an REI to begin with. Yes, it was that detailed.

Best of all Alan showed me how only a single SFH rented out at $2k/mth could get me to my retirement goals in 10 years!”

 

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Who We Are!

AZREIA, Arizona Real Estate Investors Association, is a professional association that exists to serve the needs of independent real estate investors. We provide market information and analysis, education, networking opportunities, implementation guidance, and support to assist our members in achieving success in real estate investing. Since our founding in 2002, we have helped thousands of real estate investors.

  • We believe real estate investing can help anyone achieve their financial goals. Success is a process and real estate investing over the long-term can provide exceptional results. Your results are dependent on your commitment to success and the effort you put forth in addition to market factors both seen and unseen. Not everyone is willing to commit and do what is necessary (legally, ethically and morally) to succeed. We do not believe in “get rich quick”! Please take our FREE Entrepreneurial Self Assessment to better understand your suitability for real estate investing. It takes about 20 minutes.
  • We believe planning is an essential element to reaching your desired outcome. We feel our Launch Pad program for new investors is an exceptional planning process for new real estate investors that will keep you focused, take months off your development cycle and give you a much better opportunity for success. Launch Pad is available to everyone. It is available for AZREIA members at the small price of $30. Non-members may attend on a space available basis but pay a non-refundable $100 fee to attend.
  • We believe strongly in education and offer reasonably priced education both internally and from respected educators outside of AZREIA. We are not mentors or coaches. We do not offer these type of high cost programs.
  • We believe networking is critical to any investor’s success. Networking with a purpose will help you build or improve your team, understand how others are successful, learn different investing techniques, acquire property, find money partner and much more. We believe networking is the second most important aspect to successful investing falling only behind implementing a well thought out plan. In support of this belief, AZREIA offers several networking opportunities every month.
  • We believe an association should bring purchasing power to its members. AZREIA has exceptional benefits that save our members money, increase their profits and simplify their business.
  • We believe and enforce our strong Code of Ethics. (CLICK TO VIEW)

AZREIA is believed to be the largest REIA in the country. We have been the most highly recognized REIA by the National Real Estate Investors Association. No other REIA has earned the REIA of the Year Award as many times as AZREIA. Additionally, National REIA has recognized AZREIA’s education program, community program and Government Affairs program as the best. National REIA has also honored AZREIA as being the Most Innovative. Locally, the Phoenix and Tucson Business Journals have listed AZREIA among the Top 10 Professional Associations.

 

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Will real estate investing solve my problem?

Most people consider investing in real estate as a way to solve an issue or issues in their life. The good news is real estate investing can work for anyone. So, the quick answer to the question is yes, real estate investing is a good way to solve many financial issues.

The bad news is many times a person will not take the necessary steps to ensure success in real estate investing. So, while real estate investing will work for anyone, it will not work for everyone. If you are committed and take the necessary actions (legally, ethically and morally) your probability of success is very high.

We encourage all new investors to complete AZREIA’s FREE Entrepreneurial Self Assessment. This 20 minute exercise will help you determine if real estate investing is right for you. Also, you will understand the type of investing most suited to your personal situation. [CLICK HERE to take the Entrepreneurial Self Assessment] Based on your results, you may determine to complete Launch Pad.

At AZREIA, we have a path for all people considering real estate investing to follow as a way to get started and determine if real estate investing will work for you. We call it Launch Pad!

Launch Pad is a planning process that when completed provides most new investors with the following:

  1. Your Optimal Investing Path
  2. Your Preferred Property Type
  3. Your Property Acquisition Plan
  4. Your Funding Plan
  5. Your Educational Plan
  6. Your Team Building Plan
  7. Your Networking Plan
  8. Your Beginning Timeline

We’re sure you noticed that each one of the above eight items begins with “Your”. That is because every investor is different. Your needs are unique to you, so your plan needs to be specifically designed to meet those needs. Also, your plan should fit in with your current life situation.

Here’s the kicker…. Going through the Launch Pad process will also determine if real estate investing will work for you at this time in your life. If so, great! You have a plan to implement. If not, isn’t it better to know that up front and save you a lot of time, money and anguish? At that point, you can consider other ways to solve the problems you are facing.

Consider registering for our next Launch Pad session. You will need to set aside about four hours to complete the process. If you are an AZREIA member, there is a small $30 fee for Launch Pad. Non-members may attend on a space-available basis but pay a non-refundable $100 fee to attend.

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New to Real Estate Investing: How AZREIA Membership Helps Me

Congratulations! Just knowing that real estate investing will help you means you’re off to a great start to achieving your financial goals. As an AZREIA member and new to real estate investing we take all of the guesswork out. You start by completing Launch Pad and then the rest of the items listed below. There is a Launch Pad session about every 30 – 45 days. This process will take months off your development time and gets you started doing deals as soon as possible.

1. Register for and complete Launch Pad – Proper planning is the major differentiator between those who succeed and those who don’t. We are so committed to you getting off to a great start that Launch Pad is included for AZREIA members for just $30. This four-hour session provides most new investors the following eight critical items:

  1. Your Optimal Investing Path
  2. Your Preferred Property Type
  3. Your Property Acquisition Plan
  4. Your Funding Plan
  5. Your Educational Plan
  6. Your Team Building Plan
  7. Your Networking Plan
  8. Your Beginning Timeline

We’re sure you noticed that each one of the above eight items begins with “Your”. That is because every investor is different. Your needs are unique to you, so your plan needs to be specifically designed to meet those needs. Also, your plan should fit in with your current life situation.


Register for the next available Launch Pad session: VIEW CALENDAR


2. Start implementing your Launch Pad Plan immediately! Your personal Launch Pad plan tells you what to do and when to do it. So, schedule the education you need. Begin building your team. Attend the networking sessions important to your plan. Implement your Acquisition Plan. Time to get going! It’s all in your Launch Pad plan!

3. Review the latest Market Update in the Member Resources tab in the Member’s Area of this website. As an investor it is important that you stay informed on the market. Creative real estate investing means being able to respond to market conditions in your negotiations, marketing, acquisitions, pricing, etc. It will take you a while to become comfortable with market trends. Attending the Market Update and Market News segments of AZREIA’s monthly meetings will help you understand trends and directions important to your investing.

4. Optional: View the Success Factors video series by CLICKING HERE. This free, one-hour, six-part video covers several important topics for new investors:

  1. What Will Be Covered
    1. Goal Setting
    2. Getting You Started Quickly
    3. Taking Months Off Your Ramp Up Time
    4. Getting You Connected
    5. Reducing Mistakes
  2. Jumping Right In!
    1. Getting in the Right Mindset to Succeed
    2. Top 5 Success Factors
    3. Separating Fact from Myth
    4. Understanding Different Investing Strategies
  3. Education: Spending Your Dollars Wisely
    1. Education You Need Versus Unnecessary Education
    2. Mentors: What You Need to Understand Before Spending Your Money
  4. It’s All for Nothing if You Don’t Do a Deal
    1. Finding Deals
    2. Getting Money for Deals
  5. Tools for Success
    1. Building Your Team
    2. Leveraging the Market Update
  6. Time to Get Started!
    1. Look Out!
    2. Your Next Steps

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Experienced Investors

Congratulations! You are somewhere along the path to achieving your objectives. Maybe you have rehabbed a couple of houses or acquired a few rentals. Possibly you have already achieved your objectives and are fully living the life you dreamed. Regardless of where you are on your path, an AZREIA membership will benefit you by helping you get to your goals faster, increasing the margins on your current investments and simplifying your business.

Seven Ways AZREIA Will Help You

1. Market Information – Market knowledge sets you apart from your competition. How you use the knowledge and information will be unique to you and your needs. Valued market information will help you adjust your investing to current market conditions, so you don’t miss opportunities. The knowledge you gain from this valuable tool will help you communicate as an expert. It will help you raise money from investors. You will justify pricing and offers based on market trend analysis. The Market Update is invaluable and free to members.

2. Controlling Your Cost & Saving Money – AZREIA members have access to exclusive benefits from dozens of our Business Associates and major national companies like The Home Depot where members can qualify for 2% rebate and receive exclusive pricing on paint, cabinets and appliances. AZREIA members on average save over $1000 per year each through our expansive relationships. Experienced members save many thousands of dollars each year.

3. Simplify Your Business – Real Estate investing is constantly changing. New processes, new technology, new creative techniques are always coming along. AZREIA will keep you at the forefront of it all.

4. Networking – The most successful investors realize the tremendous value of networking. AZREIA makes it simple to network with a purpose. From the structured networking of the Phoenix Real Estate Club designed for experienced investors to achieve results to great networking opportunities at all our strategy based subgroups, we have made networking effortless.

5. Improving Your Team – We know you already have a team in place. You wouldn’t be a successful investor without one. Through AZREIA’s Business Associate Program it is very possible you will improve your team with experts in virtually all of the services and products you will need. You know the value of having an experience, expert team. If you need to upgrade your team, AZREIA can help.

6. Education – You’re successful, so you are smart as it relates to investing. AZREIA’s most successful investors continuously invest in their advanced education. AZREIA’s reputation allows us the benefit to be very picky on the national educators we bring to our members. We realize it is important for you to understand the latest techniques and how to integrate them into your current investing.

7. Two Things Successful Experienced Investors Need To Do – We have found that time constraints often prevent or delay experienced investors from doing two thing that will protect their long term success – proper insurance coverage and exceptional asset protection. AZREIA will assist you in understanding your insurance coverage and asset protection. We are not an insurance company or attorneys and will not give you advice. We will help you to understand what you need to know and the questions you must have answers to in both of these critical areas. There is no reason to work a lifetime for success and give it away in a day. Don’t be “one of those investors” with a story. Preventing the loss of success is possible and something every investor should do.

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Help for Non-Members

Naturally we can help you more if you are an AZREIA member, but there are several things you can do as a non-member.

1. Take our FREE Entrepreneurial Self Assessment. This first step of our Launch Pad program helps you better understand your suitability for Real Estate Investing. It takes about 20 minutes to complete. [CLICK HERE to take the Entrepreneurial Self Assessment]

2. View the Success Factors videos. This free one-hour, six-part video series (CLICK HERE to view) covers several important topics for new investors:

    • What Will Be Covered – Goal Setting, Getting You Started Quickly, Taking Months Off Your Ramp Up Time, Getting You Connected, Reducing Mistakes
    • Jumping Right In! – Getting in the Right Mindset to Succeed; Top 5 Success Factors; Separating Fact from Myth; Understanding Different Investing Strategies
    • Education: Spending Your Dollars Wisely – Education You Need Versus Unnecessary Education; Mentors: What You Need to Understand Before Spending Your Money
    • It’s All for Nothing if You Don’t Do a Deal – Finding Deals & Getting Money for Deals
    • Tools for Success – Building Your Team & Leveraging the Market Update
    • Time to Get Started! – Look Out!; Your Next Steps

3. Take a Launch Pad session. This is free for members, but it is available to non-members for a fee on a space available basis. Launch Pad is a planning process when completed provides most new investors with the following:

    • Your Optimal Investing Path
    • Your Preferred Property Type
    • Your Property Acquisition Plan
    • Your Funding Plan
    • Your Educational Plan
    • Your Team Building Plan
    • Your Networking Plan
    • Your Beginning Timeline

I’m sure you noticed that each one of the above eight items begins with “Your”. That is because every investor is different. Your needs are unique to you, so your plan needs to be specifically designed to meet those needs. Also, your plan should fit in with your current life situation.


Register for the next available Launch Pad session: VIEW CALENDAR


4. Attend AZREIA meetings as a guest. There is a reasonable guest fee which is discounted if you register online.

    • The Market Update is presented at our Monthly Meetings, so you are able to receive this valuable information. (Only members may download and use the charts and data.)
    • You may meet AZREIA Business Associates in the Tradeshow during our Monthly Meetings. This will give you access to exceptional product and service providers that successful real estate investors use.
    • Networking at our Monthly Meetings is unsurpassed. As a non-member you may take full advantage of this opportunity.

5. Please enjoy our Blog of interesting articles by industry experts. Access our blog by CLICKING HERE.

6. The best way we can help you is to convince you to become a member. Our benefits are extensive. Our average registered member receives several hundred dollars in rebates and exclusive AZREIA discounts from The Home Depot. Discounts on education and services/products from our Business associates ensure you save big. Every AZREIA member should receive many times their annual dues back just through our rebates and discounts.

Please consider our “Build-Your-Own” membership plan as a cost-efficient way to fully participate in AZREIA. At only $60 a year under our current promotion and low meeting costs it is an ideal way to get started.

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