Whenever I tell someone that we are a Qualified Intermediary for 1031 Exchanges, I almost always get the response “1031?! Are people still doing those? I didn’t think those were still being done in this economy.”
Many people have no idea that their retirement account (IRA, 401-k, etc) can invest in many different types of assets, many of which are not allowed by their current custodian. For instance, if you asked your typical custodian to buy real-estate, I’d bet that 99% of them would tell you no. The problem isn’t that the IRS prohibits real-estate. The problem is 99% of the custodians do not want to deal with property tax bills, deeds, and paperwork involved in a real-estate closing. They prefer transactions to be much more automated; transactions where they a button is pressed and you suddenly own stock. Investing in assets other than securities has been allowed since the Employee Retirement Act of 1974 (ERISA) was passed. You don’t need a special type of retirement plan. You need a special administrator. Read the rest of this entry »
Does it seem like everytime you read recent financial headlines that governments are implementing stimulus packages or slashing interest rates? Central banks are working to reduce the value of their countries’ currencies everytime they print money. Investors have been recently seeking safe havens such as oil, gold, and other hard assets to protect them from fears of governments continuing to print money. Gold has reached record values in recent months due to weak jobs reports, slashing interest rates, and general currency fears. Read the rest of this entry »
With the current volatility of the equities market nationally and internationally, investors are constantly seeking new investments and investment strategies to save for their retirement. Many of our clients are turning to non-traditional IRA investments to save for the future. Recently I was reading a book regarding this very topic and one of the focuses was on investing in water. Read the rest of this entry »
Savvy Sanibel and Captiva real estate investors are always looking for deals, and now may be the best time. The Golden Rule of real estate investing has not changed – the profit is made by purchasing at the right price and not over paying. The rule on Sanibel and Captiva has never been truer. For buyers getting property at the right price, the tax laws have never been more favorable. Read the rest of this entry »
Investors often think they cannot make deals happen because they don’t have the experience or complete capital to drive an investment. However, through the past couple of weeks I have seen more and more individuals coming together to form partnerships for sound investment opportunities.
For example, I have had discussions with many investors interested in real estate investing, however are involved in a different profession. This may discourage them from traveling down a path in which they are unfamiliar. This is a valid concern. Read the rest of this entry »
A client recently asked me what the return on a CD would yield her. After speaking with a local bank, I was informed that this rate was currently in the range to 0.5% to 1.5%, depending on the duration and size of the CD. With interest rates so low, many of our clients are searching for secure investments that yield higher returns. Some clients have found the solution in notes. Notes are an extension of credit from our client (the lender) to a borrower. The purpose of the note is to provide written evidence of the amount of the loan and the terms under which the loan must be repaid. Notes provide a stated rate of return which is generated from the interest a borrower must pay on the loan. Interest rates on notes can be explicitly stated to be as high as 18% in accordance with Florida’s Usury Laws. If the borrower is using the loan for a business venture, a client may also elect to be compensated by receiving a percentage of the profits associated from the venture in addition to an explicit interest rate being charged on the loan. This arrangement can legally yield a return on investment that is far above the 18% cap enforced by Florida Usury Laws. Read the rest of this entry »
The one investment type that has remained constant among our clients over the years is LLC investments. An LLC is a legal organization that provides the tax advantages of a partnership while limiting the legal liability of the individual partners in the same way a corporation does. LLCs are considered securities in some states and may be required to meet the standards of securities offerings.
The majority of our clients do not form a company (i.e. LLC) when they invest their IRA funds. 90% of the transactions that Entrust Freedom handles are straight purchases directly from the IRA. That is to say that the IRA account purchases the asset in the name of the administrator (Entrust Freedom, LLC FBO Client Name, Client Acct #).
Sometimes, however, an LLC can be a great choice for control of the IRA, especially when there are multiple business partners. We will discuss the advantages and disadvantages below. Read the rest of this entry »
CCIM Florida Chapter 1Q2010 Newsletter Article – Gary King
As no surprise to most of us, lending guidelines have tightened significantly throughout this difficult recession and many banks are simply not making loans. In fact, some widely-recognized bank names are actually scrambling to meet regulatory requirements by selling off loans while aggressively seeking deposits. Other lenders have disappeared altogether or have suspended virtually all lending activities. Your client’s bank “turn down” may have little, or nothing, to do with the borrower’s credit worthiness or the strength of the subject property and everything to do with the lender’s financial health. However, there are lenders and solutions out there…you just need to know where to look. Read the rest of this entry »
Recently I sat down with a potential new client who was very interested in opening up a Self Directed IRA. The reason he became very interested in opening up a Self-Directed IRA was because he did not understand the current investments in his IRA. His current IRA was invested in the stock market through various mutual funds, bonds, and stocks. Like many individuals he had no real idea as to what those stocks and bonds were or why they were going up and/or down. He wanted the opportunity to invest in something that he understood, something that was familiar to him. He didn’t want to keep losing or gaining money in his IRA without knowing why. For this individual the investment that was familiar to him was Real Estate. He and his wife are both clients now and have several properties in their IRA’s and couldn’t be happier. Read the rest of this entry »
