For more information on AdvantaIRA Trust and the services they offer go to www.AdvantaTrust.com

Mr. Romney has a excellent tax planning team that has layered his investments for liability protection and tax sheltering.  The article was correct on many key facts.  The article pointed out the IRAs that own businesses are subject to UBIT tax.  They were not sure if Mr. Romney was paying UBIT becasue of the offshore corporation that was set up for asset protection. I would assume he is not paying UBIT because that is the way the law does not require if if you own an offshore corporation.

Mr. Romney has been very successful and I assume he is a good investor.  He is smart to use a self-directed IRA that gives him the flexibility to invest in alternative assets like Bain Capital.  I am sure there are other private assets in his IRA including private stocks, notes and other LLCs.  What is in your IRA?

Most rich people  don’t get rich because they are lucky, typically they are smart and work hard.  Smart investors use self-directed IRAs, shouldn’t you?  To learn more about self-directed IRAs and their benefits, call me.

Dave Owens is the President of AdvantaIRA Trust, LLC and can be reached at 239-333-1031.

I just wanted to send some great news. Effective tomorrow, we will be transitioning to a new and better business structure. For the last nine years, we have been affiliated with a company out of California where we shared resources, systems and marketing. Because of the economy and other factors, we have mutually agreed that it is in our best interest to operate separately. Effective December 31st, we will be known as AdvanatIRA Trust, LLC. Our goal is to continue as the leader in Self-Directed IRAs.

You will be happy to know the new AdvantaIRA is very strong. Over the last nine years, we have grown to over 3000 active clients and we administer over $290 million in client assets. We are looking forward to our new ventures in the future. We are implementing new computer systems and websites, and all should be complete in January.

In addition to our Gainesville office, we will also be opening a new office in Miami around late January 2012. It is an exciting time for us. We want to assure you of our commitment to excellence in customer service. We have attached a flyer announcing our big changes.

As part of our “Re-Grand Opening” we are having a drawing to give away a Kindle Fire to one of our friends who register as a Facebook Friend or join our Linkedin group. The links are below:

Facebook Link – http://www.facebook.com/#!/AdvantaIRA

LinkedIn – http://www.linkedin.com/groups?about=&gid=4196572

If we can answer any questions for you or your clients regarding Self-Directed IRAs, please feel free to call us at any time.

Happy New Year!

What is investing in notes or private lending?  While no investment is guaranteed, notes give investors the ultimate control.  Let me give you a quick example of private lending with an IRA.  Most investors do not know that you can be
the bank.  Your IRA account can lend money to non-related parties.

Typically, the rates are higher than market interest rates and the lender controls the deal. When I say control, I mean as the investor, the IRA will make all the decisions on the loan and control every aspect.  For example, assume your IRA wants to make a loan to investor Jim.  Jim wants to borrow money to buy a piece of real estate. As the IRA owner, you will control:

• How much to lend
• Interest Rate
• Terms or Length
• Down Payment
• Security Interest
• Appraiser on the collateral
• What attorney to use to close
• What inspector to use

The IRA as the lender holds all the cards and controls the deal.  I wrote a hard money checklist if you would like to download it.  It is not an all-inclusive list, but it will help you get started.  Your IRA can secure a mortgage on the property as collateral, so there is relative safety in this loan.  Typically, IRA investors will demand a substantial down payment (30-50%+).

For your information, an IRA can do an unsecured loan.  Unsecured loans are common, but they are usually smaller loans.  You can also trade notes, which is an entire industry.

If you would like more information on private lending, download our guide to private lending at http://www.entrustfreedom.com/investments/private-lending/ or call us at 239-333-1031.

For further information about the AdvantaIRA contact Amy Blanco, or visit the company website at www.advantaTRUST.com or call (239)-333-1031.

Our data shows that South Florida leads the way in real estate purchases.  SWFL is particularly hot right now.  Extremely low prices have allowed investors to gobble up these great deals.  Also, investor unhappiness in the traditional
markets has made alternative assets a hot commodity.

Before you invest in a real estate IRA, please understand  the prohibited transaction rules and who is a disqualified party to your IRA.  There is no personal use of the real estate in an IRA, even for maintenance purposes.

If you would like more information on Real Estate in your IRA, go to http://www.entrustfreedom.com/investments/real-estate/.  Entrust Freedom, LLC is expanding and effective January 1, 2012 will become a member of the AdvantaIRA Group.  Please call us at 239-333-1031 to get started in Real Estate IRAs today.

Many banks have decided not to hold their troubled debt properties to foreclosure, and have opted to instead sell the note and mortgage as an asset.  These troubled debts are usually sold at a deep discount, offering the investor great opportunities.  Different scenarios for the investor include restructuring the debt with the borrower, or holding the note to complete the foreclosure process.  While this investment strategy is not for the new investor,  it can be a smart move if you get professional due diligence on the asset.

Let me give you a recent example.  An IRA investor contacted a regional bank to purchase some notes they were trying to sell.  The note balance on the purchased note/mortgage property is $700,000 with the property fair market value of
$500,000.  The note purchase price for the IRA investor was $300,000, which is a 50+% discount on the note.  The new IRA owner renegotiated the note with borrower and both parties are happy.

There is motivation for the bank to sell these notes, especially if the note was acquired because of bank failure.  Typically, the FDIC will guarantee all notes purchased from failing banks up to 80% of the loss on the sale of the note.  The acquiring bank has  limited exposure, and can now move troubled debt off their balance sheet quicker.

Here is another scenario we have seen with an IRA investor.  A client purchases a note with a balance of $1,500,000 for $1,000,000 but the property had a FMV of $1,700,000.  The note was in default, and the bank had filed foreclosure.
The investor continued the foreclosure and ultimately took title to the property.  The investor immediately listed and sold the property for $1,600,000 netting a $600,000 gain for the IRA.

Investments like the ones mentioned above are not for the faint of heart, but for serious investors that have consulted with their tax and legal counsel.  A self-directed IRA administrator does not give financial or tax advice.

There are opportunities for small investors to participate in these bank distressed notes.  Many private equity firms like Silverleaf Advisors specialize in the techniques listed above.  These companies will do all of the collateral and legal due diligence and will handle 100% of the day to day management.  Silverleaf engineers and manages the foreclosure process to and has successfully reduced the foreclosure time to maximize returns.  Doug Hannah of Silverleaf states, “Our company handles the leg work for our investors, so they don’t have to be an experts in purchasing notes.  After purchasing over 125 notes, banks continue to bring us additional product as qualified buyer of these instruments.
Firms like Silverleaf have capitalized on these markets early and netted very positive returns for their investors over the last 3 years.

Self Directed IRAs offer a unique opportunity that allow investors to purchase different types of assets.  With a traditional IRA, you are locked in to certain types of investment like a stocks or bond.  If you have a self directed IRA, you have the
option to purchase sophisticated assets like troubled bank notes.

If you would like more information on Self Directed IRAs, please feel free to contact Dave Owens at 239-333-1031 owens66@entrustfreedom.com.

Today, we had one of the largest drops in stock market history. For retirees and soon to be retired, this is their worst nightmare.  The last five years have been a disaster that continues to have no resolution in sight. Who would have ever believed it would come to this?  I heard CNN blame Europe for much of our economic problems the last week, but our own house is a mess, and there is no leadership in sight from either party.

The drop in the market and the downgrade in US credit have erased years of value from everyone’s accumulated personal wealth. The odds are that money is not coming back anytime soon.   A lot of your wealth is now gone.  People without extra money cannot buy cars, or real estate or other “luxury items”.  We will now have several more years until the economy gets better.  This is now our reality.  Please don’t call me the grim reaper.  I am just being brutally honest.  The point now more than ever is for each one of us to re-evaluate our financial situations.

As I pointed out, we all live in this great society where more is better.  Bigger houses, bigger cars and more stuff than we could ever need, and what is it all worth? That is not going to be the case for many people as we move forward.  If you are retired or retiring soon, now is time to re-evaluate your every need, your nest egg and your goals.  The economy is not going to get better anytime soon. The drop in wealth will affect everyone, including Uncle Sam, which means it will take longer to clean up his mess.

What are your priorities the next few years? There is an old saying called the Dickens Truth- Income $100 expenses $99 equals happiness, income $100 expenses $101 equals misery.  In your golden years, while you don’t have to be rich, hopefully you will be healthy, happy and have a great family around you, which is pretty good. 

The new retirement reality is economically we have now affirmed that things are not going to get better anytime soon.  The key is to educate yourself, plan and most importantly, start today. You can still be happy, but it might be a little different than you had initially planned.

Dave Owens is the managing member of Entrust Freedom, LLC a Self Directed IRAadministrator in Fort Myers, FL.  Dave can be reached at owens11@entrustfreedom.com

Should you decide to do seller financing with your relinquished property, it is important to note that the loan must be paid off prior to closing on the purchase of the replacement property(s).  The Qualified Intermediary would be listed as the Lender.  Any payments made would be made payable directly to the QI and sent to them to deposit into the escrow account that they have established for your exchange.

In order for the full loan amount to be sheltered in the exchange, the entire loan must be paid prior to closing on the replacement property(s).  There are 3 ways in which to accomplish this:

1.  The borrower pays the loan off within the 180 day exchange period AND prior to closing on the replacement property.
2. The Exchanger buys the note/loan from the Qualified Intermediary.  For example, if the loan is for $25K, you would personally give the QI $25,000.00 to buy the note from them.  An assignment would need to be prepared to show that you are now the lender.  From that point on, the borrower would make payments to you directly rather than to the QI. 
3. The Exchanger finds a third party who is willing to purchase the note.  This could be a friend, business, bank, etc.  It would be up to you to find the party that would want to purchase the note.  The party would then give the QI the funds, and an assignment would be prepared showing this party as the new lender.

Let’s say that the borrower makes payments and is able to pay 75% of the loan before you are to close on your replacement property.  In this scenario, only that 75% of the loan is sheltered by the exchange.  The remaining 25% to be paid back is subject to tax.

With a little planning, seller financing can definitely be worked into a 1031 exchnage.  The key is to know the rules and what needs to happen before you embark on this, and always consult your tax advisor before making any decisions.

Theresa Knower, COO, CES® is the Chief Operating Officer of Entrust Freedom, LLC.  Entrust has an arsenal of tax free strategies, feel free to contact Theresa for more information or questions at 239-333-1031 x115 or Theresa@EntrustFreedom.com.