Traditionally, money for real estate investments comes from banks or mortgage companies. Banks borrow the money from customers and lend it out to bank customers at a higher rate. This is how banks make money, on the spread. They use your money, to make money for themselves. How would you like to keep the spread for yourselves?
Did you know that you can use your personal “private” funds to invest directly in real estate? Most traditional financial advisors do not have direct real estate investments available to their customers, so they don’t mention it to you.
We would like to assure you that you have the right to lend or invest your money in real estate.
Please click on a question or topic below to learn more:
What are the benefits to you?
How can you invest your funds?
Does it matter how much I have to invest? How long do you need it?
What kind of returns can you make on your money?
Can I get it back in an emergency?
Can I use IRA money?
What is a self-directed IRA?
What are the benefits of a self-directed IRA?
Why haven't I heard of a self-directed IRA before?
My CPA / Attorney / Financial Advisor hasn't heard of a self directed IRA, what should I do?
Are my self directed IRA investments guaranteed?
Are self directed IRAs for everyone?
Our commitment
Interested in discussing options?
- Have your money earn above average returns secured by real estate.
- Diversify your investment portfolio with quality real estate.
- Share in the tremendous tax benefits to investing in real estate.
- Opportunity to passively invest in real estate.
- No need to be a property manager or landlord
- Make a positive impact on a community.
How can you invest your funds?
Debt / Lending - you lend us money and we will pay you for the use of your money for the time we use it.
- Lender relationship - you are lending money, there is no equity participation
- Typically, payments are made to you at the point of refinance or resale.
Equity Investments - for apartment investments, you can partner with us.
- Investor funds represent ownership or equity in the property
- Investor participates in cash disbursements during hold period
- Investor participates in profits at resale
Does it matter how much I have to invest?
How long do you need it?
These two questions are combined as they are interrelated.
We have different needs for funds to support our real estate business, depending on the hold and exit strategy for the property acquired. This can range from a couple of months to as long as seven years.
The following is a chart of the types of investments we typically deal with and the amount of time we use the money.
Ideally, when the project we initially use your money for closes (refinanced or resold), you will want to reinvest in a new suitable project. We want to keep your money earning for you.
| Type | Amount of Investment |
Time Needed |
Debt or Equity |
Type of |
| Houses | 3-35k | 6 months | Debt |
Promissory Note |
| Houses | 30-200k | 6-60 months | Debt | Note & Mortgage |
| Apartments | 50k+ | 3-7 years | Debt or Equity | Note or Partnership |
This document is not intended to answer all your questions. If you are interested in participating, we would need to sit down and better understand your situation. At that time, we could discuss options and suitability.
What kind of returns can you make on your money?
This depends on the amount of money you have available, the amount of time you can commit the funds for, the level of risk and the potential for the property you are considering investing in.
Due to security laws, we need to be cautious about quoting rates of return for investments. We can say that are willing to pay higher than average rates of return due to the potential higher returns of the properties we are investing in.
No investment (aside from FDIC-insured deposits) is guaranteed and real estate investing is not for everyone. However, most successful investors feel that the investment risk in assets they know and understand is much less than that associated with investing solely in the stock market.
This can be explored further upon meeting and understanding your investment objectives.
Can I get it back in an emergency?
We caution investors that they should not need these funds for their day to day living expenses. If you have the risk to need to liquidate these funds for living expenses, we request you not participate.
These investments are suited to the investor has long term hold funds available. IRA funds, if not needed for annual or periodic living expenses are a good source of funds for these investments.
In the event that an emergency occurs and you need the funds, we will get your money back to you. All we ask is that you give us a reasonable amount of time, usually 30-60 days to identify another investor to replace your funds. Once we have replacement funds, we will return your money to you to meet your needs. We believe that is reasonable.
This will be discussed at the start of any investment participation.
Yes! Both IRA and non-IRA funds are sources of investing funds. IRA funds are excellent sources of real estate investments as they are long term and generally not being used for day to day living expenses. We can assist you in establishing appropriate Self Directed IRA brokerage accounts to permit your IRA funds to be eligible for real estate investing. Typical investment brokers do not offer real estate investments as part of their product portfolio.
The information provided below is obtained directly from Equity Trust Company and their website:
www.trustetc.com/new/self-directed-ira/self-directed-ira.html
There are a number of self directed IRA custodians. The following is not a direct endorsement of Equity Trust and is provided for informational purposes, to help you learn and understand how IRA funds can be used for real estate investing. You can visit Equity Trust at www.trustetc.com to learn more.
Definition of a Self Directed IRA: A self-directed IRA is technically no different than any other IRA (or 401k). A self directed IRA is unique because of the available investment options. Most IRA custodians only allow approved stocks, bonds, mutual funds and CDs. A truly self directed IRA custodian, such as Equity Trust , allows those types of investments in addition to real estate, notes, private placements, tax lien certificates and much more.
What are the benefits of a self-directed IRA?
In addition to the tremendous IRA benefits (tax-free profits, tax deductions, asset protection and estate planning), you are able to invest tax-free in investments that you know and understand, which through the power of compounding interest, will create true wealth for you and your family.
Why haven't I heard of a self-directed IRA before?
While the concept of investing in real estate and other assets in retirement plans has been around for more than 30 years, the concept hasn’t received large attention because most custodians who offer IRAs (banks and brokerage firms) focus on mutual funds and CDs because they have vested financial interests in you selecting those investments from them. Because the majority custodians focus on stocks and CDs there is a misperception that that is your only investment option for retirement plans, which is not the case.
My CPA / Attorney / Financial Advisor hasn't heard of a self directed IRA, what should I do?
A trusted advisor who has not heard of self directed IRAs is not an entirely uncommon experience, given their relatively unknown nature.
The danger when asking your trusted professional about this new option, is that if this is new to them, they typically say "no". Your advisors are there to protect you and themselves from bad things happening. If they don't know nor understand what you are asking about, they may say "no" without checking it out. To relate, I have kids, my common response to them if I am unsure or don't understand is "no". I think most of you can relate.
All I am saying is that this option was new to me a couple of years ago, and I grew up in the banking, securities and insurance world. It is a valid option, just not commonly understood. Don't take "no" for an answer without asking them to check into it. Unfortunately, that requires some time and may cost you some money. Don't you owe it to yourself to check it out?
Equity Trust has worked with thousands of professional advisors across the country to educate them regarding IRA and self directed IRA rules so they can best customize advice to meet your personal needs.
If your advisor hasn’t heard of self directed IRAS before, he or she can contact an Equity Trust Retirement Specialist at 1-888-382-4727 or encourage them to get to join their self directed IRA professional advisor network.
Are my self directed IRA investments guaranteed?
No investment (aside from FDIC-insured deposits) is guaranteed and self-directed investing is not for everyone. However, most successful investors feel that the investment risk in assets they know and understand is much less than that associated with investing solely in conventional IRAs.
Are self directed IRAs for everyone?
Self directed IRAs are not for everyone, they are for those who want to create wealth using their knowledge of investments outside of stocks, bonds, and CDs.
We have a relationship with Equity Trust and we can refer you to them for advice.
We can also refer you to other Self Directed IRA Custodians.
We are not endorsing Equity Trust , and are simply utilizing their “how to” information to communicate Self Directed IRA options for you. You will need to select your provider.
We are fully committed to real estate as an investment tool, and we are enthusiastic and passionate about real estate.
We also recognize that it is not for everyone. We will discuss the programs we have and if investing in real estate is right for you, we will move forward.
We will not pressure you, if it is not right for you, we will part as friends. Regardless, you will have learned about this alternative. If you change your mind in the future, we hope you will contact us.
If you commit to move forward, we will be open with you about the risks, rewards and educate you about the deals we are working on. At the point you are comfortable, you can let us know you are ready.
That being said, we maintain relationships with a number of investors and investment opportunities will be presented to this group. The first to commit will participate. We will need you to be prepared and ready to invest when requested. If you are not able to participate, you can be ready for the next opportunity.
Interested in discussing options?
We should arrange to meet and discuss your investment interests. At that meeting we can better discuss the programs we have available, and determine the best fit in your situation.
Contact Tim Madden at 513-474-4428 or email at tim@maddenfinancialgroup.com