Real Estate

Real Property vs. Market Investments

January 9, 2014

Guest article by David Hoyle:

After spending more than 20 years on Wall Street as a partner in a major investment firm, I now focus on providing a cost effective way for others to invest in the real property market through self-directed investment programs. I believe there is no better way to diversify capital market risks, better-known as stock market risks, than through the introduction of tax-deferred investments in income-producing assets into an individual investor’s portfolio.

I hope that as you and I look into our collective crystal balls of the future, we recognize the following:

Stocks are making new highs, despite an expectation on the part of a majority of investors, but that growth will remain low and fragile in the coming year.
Bonds, which have been made expensive through the Federal Reserve Bank’s “Quantitative Easing” program, will now become a source of increasing volatility and risk as the FED scales back its buying program.

At a time when equity and bond portfolios are becoming more correlated (i.e. they tend to behave the same and are therefore less diversifying and more risky), real estate investments represent a true source of diversification and a source of very attractive returns. While individual stocks may offer double digit returns in the future, seldom do general index linked assets offer multiple consecutive years of double-digit returns.

As uncertainty creeps into the financial assets marketplace, an increasing number of investors will look to real property investments. Problematically, they will see opportunities, but will be confronted with increasing liquidity issues. Banks will not lend.

This is where a great opportunity for self-directed IRAs exists. Direct portfolio investment, joint ventures, equity participation lending, and other transactions within a self-directed investment framework all look likely to be on the upswing for 2014 and beyond.

Together with NuView, we at Old Florida Properties look forward to helping you find profitable opportunities.

David is the founder and managing broker of Old Florida Properties LLC, a licensed real estate brokerage firm located in downtown Orlando. You can contact David by phone at 407-529-4621, or you can visit his website at www.old-fl.com for more information.

Webinar – Intro to Real Estate in IRAs

September 24, 2013

This introductory course will walk you through what a self-directed IRA is, what role NuView IRA serves, and, most importantly, how to hold real estate in your retirement account. While NuView IRA is based in Orlando, Florida, the self-directed IRA specialists help their clients scattered across the nation by serving education as frequently as possible in the form of webinars. Real estate offers clients the ability to diversify in real property. NuView is not a fiduciary and does not give clients investment advice or products. Instead, clients make their own choices to invest in almost anything. Learn more about IRS rules from the webinar, or you can read about it here.

Rebounding Real Estate and IRAs

June 26, 2013

Imagine taking advantage of the continual rebounds the U.S. real estate market is experiencing, all from the comfort of your retirement account.

“We have a continued, gradual recovery,” said Brian Jones, a senior U.S. economist for New York’s Societe Generale in a recent Bloomberg story. The article went on to detail specific data on property values, but stated home prices overall rose by the most in seven years as the recovery in residential real estate continues to gain momentum.

Shortly after that news, Yahoo! Homes quoted a RealtyTrac report that listed the top 25 U.S. markets for flipping homes — including some that offer more than 50% gross returns. Luckily for our local Floridians, Orlando and its neighbor Tampa made it to the top of the heap.

What exactly does this mean for you and your self-directed IRA? It means it’s time to earn some returns.

For years now people have been waiting to dive back into the realm of real estate investing out of fear of another housing bubble burst. In reality, we are far from it. According to Daren Blomquist of RealtyTrac, Orlando had one of the worst foreclosure rates in America throughout the past five years, but its average home price rebounded at a 12% annual rate during the beginning of this year. Now seems a better time than any to invest your self-directed IRA funds into something malleable like the recuperating housing market.

“There is a 2.68 month supply as of May left. That is if no new houses list and none expire or are withdrawn, we will sell through our inventory in 2.68 months,” said Andy Tolbert, a short sale specialist and the director of programing and membership for the Investors Resource Center chapter in Central Florida. Tolbert went on to explain that the numbers are proof of a strengthening market.

Here at NuView, we offer countless educational classes on how easy it is to introduce the booming real estate market to your self-directed IRA. Even if you are familiar with holding alternative assets and you just want to know more, our team is willing and able to help you understand every aspect of your self-directed IRA. Knowledge is power. Knowledge about the real estate market gives you an advantage that could help make investments more profitable. To learn more about your options, give our expert self-directed IRA administrators a call today at 407-367-3472.

Is Obama Capping IRAs?

April 12, 2013

It happens to me almost every presentation. Someone from the audience raises their hand during a seminar on self-directed IRAs and asks, “What is the likelihood that the government is going to take away my IRA?” Or, “will my Roth IRA indeed never be taxed again, or will Congress change their mind later when they are desperate for more revenue?”

Until this past week, I dismissed those conjectures as needless concerns from conspiracy theorists. Until the headline “Obama wants to put $3 Million Cap on IRAs” was found on the front page of the local paper. Maybe there is something going on that we need to pay attention to…

Now, of course, the political approach of making such a drastic move is first to reassure everyone that this will only target the rich, not you or I. And there is a slight inference that no one can gather such a large IRA together without some unfair advantage and extreme good fortune. In the article, recently failed GOP Presidential candidate Mitt Romney’s $100M IRA was trumpeted as the perfect example of how a large IRA is created based on insider knowledge and understanding tax law nuances.

Regardless, the rest of us in much lower tax brackets should be a bit uneasy. IRAs were created to help individuals have a shot at creating a retirement for themselves that industry and government had no stomach or ability to provide. Now over 47 million households have them, with almost $5 Trillion saved for retirement. It’s not unexpected that the government is eyeing those accounts with a great deal of interest, impatient for the tax revenues that will only come upon personal distribution of those largely pre-tax assets.

But wait, this won’t affect me – or anyone I’m likely to know. $3M is a huge IRA and not likely to be amassed by an ordinary person. Not true. For example, a person can, through a SEP IRA, contribute up to $51,000 annually. Through consistent savings and wise investing – many choosing a self-directed IRA, it is not impossible or even improbable of achieving a large balance in your IRA. We certainly have clients that would be taxed under this potential plan.

The concept of charging a tax on an IRA account which was created in the first place to provide a tax shelter to encourage savings is flawed policy. A bad idea is equally as bad regardless of whether or not it affects you or I.

Balancing the budget is something that both sides of the political aisle proclaim to be important for the future of our country. Doing it by taking it directly from retirement plans that were pledged never to be taxed is wrong.

Who knows, are Roth IRAs next?

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando, Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.

The Delicious Dillema – What Alternative Investments to Buy with a NuView IRA

February 25, 2013

One of the most frustrating elements of a self-directed IRA is the fact that you have to find an alternative investment to make it grow. Unlike typical “off the shelf” investments like mutual funds, you may actually have to be patient and wait for the best opportunity to present itself.

However, to the patient can come choices that are hard to match in the world of publicly traded stocks and bonds.

As most of you know, I make my living as the president and CEO of NuView IRA, a self-directed IRA administrator in Florida. However, I make my retirement investments just like each of my clients – through alternative investments via self-direction. As such, I find myself researching opportunities to see what is best for my retirement account. Last week, I let a few friends know that I had some retirement funds recently come available to see what investment opportunities were out there. Among my personal contacts are Realtors, fellow investors, builders, private lenders and real estate developers. I had recently sold a property owned by my retirement account and wanted to get the proceeds back into action. Additionally, my brother had moved some funds out of his company’s 401k into a NuView IRA and he wanted to partner with my retirement and make some alternative investments together.

Now, after networking with friends and family members, I have been able to narrow it down to four opportunities. First, a private developer of luxury apartments that is offering an 8% return with further profit participation, a property wholesaler in the Orlando area who finds great deals in rental properties with cash flows at 7%, private notes for the purchase of semi-tractors, secured by the “pink-slip” at 9%, and a local Realtor who has a great property to fix up and sell, estimating a 10% return within 6 months.

Each opportunity is attractive for various reasons and rather than choose one of the four investments, I am contemplating on spreading my funds partially amongst all four. Through fractional ownership and the ability to partner with my brother’s IRA and others, I may indeed be able to accomplish my goal and achieve true investment diversity.

I do practice what I preach and like many of you, face the struggles of finding, analyzing and executing on alternative investments for my self-directed IRA. I have learned that with good networking, surrounding myself with investment professionals and understanding the opportunities self-direction affords, I too can achieve my dream of an achievable retirement.

All the best in your investments.

Glen

Retired College Professor Makes 8% a Year with His Real Estate IRA

February 19, 2013

Gordon Berger, a 70 year old retired college professor living in California, decided to self-direct his IRA to buy distressed homes and apartment buildings, which he then fixes up and rents out. In an article published in the Wall Street Journal earlier this month, Mr. Berger explained how the rental income he receives, which accounts to roughly 8% a year after expenses, helps keep his retirement fund replenished even though he is now making withdrawals from his IRA for living expenses.

“I decided I didn’t want to leave myself vulnerable by having all my retirement in stocks and bonds,” Mr. Berger said regarding his decision to self-direct his IRA to purchase real estate. Stocks and bonds are often seen as too volatile and not worth the returns. Capitalizing on the housing market through a real estate IRA can yield potential returns much higher than many other traditional investments.

With a self-directed real estate IRA, investors like Mr. Berger can take advantage of the fact that housing prices are at record lows and rental rates are relatively high. According to research published by Reis, a respected resource for real estate trends, the average nation-wide monthly rent for an apartment was $1,048 in the fourth quarter of 2012, up 0.6% from the third quarter and up 3.8% from a year earlier. This is the largest year-over-year increase since 2007!

This Friday, February 22nd, NuView IRA is holding a 3 hour CE course of how to buy and sell real estate using an IRA. At this class, attendees will learn tools and tactics for buying and selling real estate in your IRA, IRS rules and regulations to keep it all legal, the advantages of tax-deferred investing, and much more. Admission is free, but you must register to attend. Call 407-367-3472 or register online here to take the first step towards taking control of your retirement!

Keeping Your Financial New Year’s Resolutions

January 30, 2013

According to a study by Fidelity Investments, 62 percent of consumers said they stuck with their financial New Year’s resolutions in the past year, compared with only 40 percent who kept other resolutions. When you think about it, a financial resolution may be easier to keep than others regarding eating better or giving back to the community because for many people, taking control of their finances seems like a more pressing, dire need in their life.

Research shows that when people have a measurable goal, they are more likely to succeed with their resolution. Therefore, if your New Year’s Resolution is to take control of your finances, create a measurable goal for your financial health. If you don’t know where to start, consider these three main areas of financial health: zero consumer debt, adequate emergency reserve funds, and maximization of IRA contributions.

According to The Investment Company Institute (ICI), only 39% of US families even have an IRA. In addition, many people who have IRAs are only contributing up to the level at which their employer matches, which is often 6 percent. However, for most people, 6 percent will not be sufficient in the long term. Chances are, you will probably need to put away 15 percent (or more) of your salary to hit your financial goals.

A self-directed IRA is a great way to unlock your IRA and take control of your retirement plan. Self-direction significantly expands your investment options to a wide variety of investments including real estate, tax liens, stocks, bonds, mortgages, notes, precious metals, and other investments. There is a myth that you have to have a lot of money to get started with self-direction, but we debunked this myth in our blog entitled “How to Take Advantage of a Self-Directed IRA with Just $5,000”.

Consider these ideas as you work to improve your financial health in 2013. As always, NuView IRA is here to provide you with the professional service you deserve. Call our company of experienced self-directed IRA administrators in Florida at 407-367-3472 to discuss your investment choices within a self-directed IRA and to start building momentum toward your financial goals for this year.

To Whom Much Is Given, Shall Much Be Required

January 24, 2013

“Whatsoever your hand findeth to do, do it with thy might” (for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest)” Ecclesiastes 9:10. Since your IRA is primarily to benefit you prior to the grave, it would make sense that your hand (or efforts) be trained on making your investments grow.

Why should we not be as diligent with our investments as we are with our labor? After all, the Bible also says that for everyone to whom much is given, of him shall much be required. If we have the talent to make and save money, shouldn’t there be an additional requirement to invest it wisely?

I know that I get particularly uncomfortable when I have funds that are not invested, or those that are under-performing their potential. For example, while many may be comfortable in owning CDs that are paying a rate of 2%, I would be distraught knowing that better yielding choices were available of which I did not take advantage. That is the beauty, and responsibility of a self-directed IRA – it is up to you to seek the best balance of risk and reward, not a money manager or a mutual fund.

Retirement, and the costs of doing it comfortably, let’s face it, can be expensive. Make it a priority to surround yourself with advisors that can help you in your choices. If you are interested in real estate, introduce yourself to local real estate investment clubs, Realtors, property managers, and others who live in that world daily. If you want to invest your IRA in emerging businesses, speak with entrepreneurial organizations, CPAs, and attorneys that may be aware of new opportunities.

Come to NuView IRA client events, and use the ideas and energy of others to help propel your dream of retirement forward. After all, we all age at the same rate, at least chronologically, and sooner or later, we will stop working and depend on our savings. Use self-direction as an important tool to get there – thousands of our clients are doing it “with all their might”.

All the best in your investments…

Glen

US Financial Uncertainty Sparks Investor Interest in Self-Directed IRAs and Real Estate IRAs

January 22, 2013

Many retirement investors are concerned about how the fiscal cliff and swelling federal debt will trigger higher taxes and budget cuts in the coming year. Therefore, in light of the looming financial issues confronting our country, many savvy investors have left Wall Street and are looking to lessen the impact of higher taxes with more tax-efficient investments like self-directed IRAs and real estate IRAs.

With a self-directed IRA, an individual can invest his or her retirement funds in traditional as well as non-traditional investments without paying tax currently on any income or gains, and thus escaping the increased investment tax rates. Instead of paying tax on the self-directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free in the meantime.

The same holds true with a real estate IRA. Instead of buying real estate with personal funds and being subject to higher income and capital gains tax rates, a self-directed real estate IRA will allow an investor to buy real estate without paying tax. Also, all income and gains generated by the real estate IRA investment will flow back to their IRA tax-free. By using a self-directed real estate IRA to make investments, the IRA owner is able to defer taxes on any investment returns until a distribution is taken, thus benefiting from tax-free growth. Better yet, within a Roth IRA, taxes may never be due.

Taxes are heading up, not just for individual earnings, but for capital gains as well. It makes sense to explore new avenues for investments that are more tax efficient in order to shelter the maximum earnings for your retirement. Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your options with a self-directed IRA or a real estate IRA! We are educators and administrators, not brokers or dealers, so call us today.

As We Roll into the New Year, Seize the Opportunity to Take Control of Your Retirement with Self-Direction!

December 27, 2012

As we head into the New Year, many people will likely be looking at their bank accounts and then making it their New Year’s Resolution to save more money. While this resolution is admirable for anyone, why not take it one step further and have your New Year’s Resolution be to take control of your retirement! Mentioned in an article from Fox Business, George Papadopoulos seized the opportunity to take control of him and his wife’s retirement when his wife’s employer made significant changes to her company’s 401(k) plan.

In addition to offering an extensive list of mutual funds that employees could choose to invest their money in, his wife’s company began offering a self-directed 401(k) option for employees. Papadopoulos, being an experienced investor looking to take control of the couple’s retirement, jumped at the opportunity for self-direction. “Self-directed 401(k) options are great for experienced investors like myself,” Papadopoulos said.

Even though a traditional 401(k) plan and a self-directed 401(k) plan offer the same pre-tax benefits and automated payroll deductions, the true difference between them is the investment choices you have with a self-directed 401(k). Self-direction dramatically expands your investment options from a short list provided by your employer to a variety of investments including real estate, tax liens, stocks, bonds, mortgages, notes, precious metals, and other investments.

The percentage of employers offering self-directed retirement savings plans in 2011 was 29% and this number is growing. Who knows – maybe your employer will be next to offer a self-directed 401(k) option to employees? Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your self-directed retirement plan options!