What Keeps Investors From Using Self-Directed IRAs with John Bowens

Episode 168: What Keeps Investors From Using Self-Directed IRAs with John Bowens 

The Profit First REI Podcast

March 30, 2023

David Richter 

Summary:

Managing taxes and retirement funds are big factors in any investor’s financial system, which is why self-directed IRAs are such an invaluable investment tool, allowing you to build and control where your retirement funds are invested and pay fewer taxes while growing your wealth.

To shed some light on the topic in this episode, we are joined by John Bowens. He is a real estate investor and an expert in the self-directed IRA/401(k) process, serving as the Director of Education at Equity Trust Company’s Equity University. 

Tune in as John shares his wealth of knowledge, providing valuable insights on maximizing your investment and better managing your taxes, and discussing how you can leverage your IRA to buy real estate properties. Get ready to learn from a seasoned pro in the industry!

Key Takeaways:
[00:44] Introducing John Bowens and the Use of Self-Directed IRAs

[06:32] What Keeps Investors From Using Self-Directed IRAs

[11:05] The Investor’s Tendency to Live Deal-to-Deal and How It Can Keep Them From Using Self-Directed IRAs

[16:30] What Can’t You Invest in With a Self-Directed IRA?

[23:50] Types of Accounts Offered by Equity Trust 

[30:49] Connect With Equity Trust

[31:43] Fees Associated When Working with Equity Trust and Their Services

Quotes:

[07:08] “The financial services industry as a whole has failed you, and that’s because most instances, in financial services, you’re not going to be informed about a self-directed IRA to invest in real estate.”

[28:51] “By eliminating the variable of taxation, you increase your annual yield…If your transactions are structured properly, and you’re working through the process, and you’re doing your due diligence, you could potentially get to your retirement goals and your financial goals by leveraging that component.”

[32:19] “[Equity Trust is] not charging a fee based on transactions, or selling investments products…an account holder that moves over, let’s say, a hundred and fifty thousand dollars, they only pay a five-hundred-dollar maintenance fee.”

Connect with Equity Trust:

Website: www.trustetc.com

Youtube: https://www.youtube.com/user/EquityTrustCompany

Tired of living deal to deal? 

If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David 

Transcription:

John Bowens:

There are all types of opportunities to educate yourself on self-directed IRAs. This is a great start. This podcast, I do nearly a hundred podcasts a year. We have a YouTube channel with all types of videos. So there’s more than enough opportunities for folks to get educated.

Outro:

If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.

David Richter:

We have John Bones from Equity Trust today and I personally use Equity Trust. It’s a self-directed IRA custodian and he gives the knowledge like if you’ve ever wondered about self-directed IRAs or if you’ve wondered about equity trust or whatever that might be, this is helping you keep more of the money that you’re making a topic that everyone loves and everyone does not wanna pay taxes. So if you wanna pay less taxes and you wanna learn the power of self-directed IRAs to listen to this episode and listen to how to get this up and running, I get nothing from this other than just giving you this knowledge. So thank you so much for listening. Hey everyone, it is David Richter, the prophet first REI podcast. Have a special guest on today with the Equity Trust group. If you don’t know what equity Trust is, it is a self-directed IRA custodian and I’m gonna make sure that I don’t butcher everything that they do. So I’m gonna have John Bows talk about that more on the episode. But then he also invests in real estate. He’s also around the real estate world. And then I utilize, I actually use equity trust, so I wanted to make sure that we got them on and can bring some value to you as a listener. So John, thank you so much for being on the show today.

John Bowens:

Thank you David. Delighted to be here. Excited to share with your group a little bit more about self-directed IRAs and for entrepreneurs out there, how they can utilize these types of accounts for various types of investing.

David Richter:

Awesome. Well, and I love that you invest in real estate as well. So you had mentioned that before we started recording. So do you mind talking just a little bit like what are you investing in? Is it single family apartments? Like are you in syndications? Like what are you using right now in the real estate side?

John Bowens:

Yeah, my focus is single family rentals.

David Richter:

Okay.

John Bowens:

And private money lending.

David Richter:

Okay.

John Bowens:

So in addition to owning real estate in and outside of my self-directed IRA accounts, uh, because I am a believer David, in that as a real estate investor, self-directed IRAs can be a great option to diversify beyond just the traditional stock market and be able to invest in an asset class like real estate. You also have the ability to create a more tax efficient environment in an ira. But of course we don’t do all of our investments in a self-directed ira. We also have real estate holdings of an ira. So I look at it as a rising tide approach, uh, not necessarily one versus the other, as in self-directed IRA versus taxable environment. There are opportunities in real estate transactions that are, can be very good for a self-directed ira and then other transactions that might be just better off or better serving with our non IRA funds. Uh, but my focus is primarily single family rentals and private money lending that is lending money using my self-directed IRAs, both traditional and Roth to other real estate investors for their fix and flip projects.

David Richter:

Awesome. I’m gonna ask some questions on lending, but I’ll ask that in a few minutes. But I love that you’re actually using the real estate vehicle, that you are a private money lender, that you’ve got a lot of the, that experience on the real estate side, cuz I think that’s probably one of the biggest. Would you say, I don’t know if you have the data on this, but real estate is probably one of the biggest asset classes that utilize self-directed IRAs. Like that’s something that a lot of the self-directed IRAs are focused on and investing in.

John Bowens:

Yeah, so when you hear the term self-directed, uh, that means self-directed into what the investor wants to invest in. Now of course there are self-directed IRAs for individuals that just want to invest in stocks and mutual funds so they can self-direct into the stocks and mutual funds that they deem as a best fit for their portfolio, not what maybe a financial advisor financial planner dictates to them. And then there’s a self-directed IRA through an organization like Equity Trust, which allows an investor to select the investments that they deem as a best fit. That goes way beyond just stocks, mutual funds and ETFs. Many of our customers do in fact invest in real estate with their self-directed retirement plans. And this goes back to the early eighties. Our company founder Dick Essett, he’s widely known as the pioneer of the self-directed IRA industry. He put together one of the very first real estate transactions with self-directed IRAs. There were actually 22 IRA investors involved in a commercial real estate opportunity. And that was right outside of Cleveland, Ohio where our company headquarters is still located. And uh, so from that one transaction back in 1983, starting with 22 clients, uh, we’ve now grown the business to well over 150,000 customers and over 40 billion in assets under custody administration. And it did all start with real estate. So the origins of alternative assets, self-directed accounts, absolutely I would say are rooted in real estate. But there are other types of ways you can invest with the self-directed ira, hedge funds, venture capital, various other private assets, uh, private credit funds, investments in physical gold and silver investments in digital assets like cryptocurrency. All of those types of alternative assets for the most part can be custody. A company like Equity Trust. Now you will learn, David, that there are certain types of investments that are deemed impermissible and there are certain types of transactions that are considered prohibited, but the tax laws are exclusive rather than being inclusive. So they tell us what we can’t invest in, not what we can invest in. What you can’t invest in is about this big in comparison to what you actually can invest in with your retirement plan.

David Richter:

Okay. Now that, I love that, that it’s rooted in real estate and that, you know, that’s probably the biggest asset class that’s held with the self-directed IRA account. So let me ask this, then you see the real estate world and you see, you know, like being a part of it as a real estate investor. I would want to ask you what holds back a lot of entrepreneurs or just I guess people in general from utilizing a self-directed account?

John Bowens:

Uh, I find there’s two reasons. Uh, the first is a lack of education. And that is by no means an indictment on the individuals out there that may not know about self-directed IRAs. I look at it as, uh, the financial services industry as a whole has failed you. And that’s because most instances in financial services, you’re not gonna be informed about a self-directed IRA to invest in real estate. And that’s because most financial services firms are rooted in stocks, bonds, mutual funds, right? So call it the traditional 60 40 model, right? 60% public equities, 40% fixed income, and then you rebalance over time based on your risk tolerance, your investment objectives, your wealth, your legacy and estate planning ideas, uh, then you sort of reformulate that, that model. Well for a lot of the people that I’ve worked with over the years and I’ve trained over 60,000 investors, I’ve worked one-on-one with over 5,000 investors. I find most of the folks that are interested in these concepts, they’re individuals that are more oriented to, I could perform better than my financial advisor or financial planner. I could perform better than the stock market. Now I can’t say that by just opening a self-directed IRA to invest in alternatives, that you’ll do better than what you can make in the stock market. Uh, at equity trust we don’t advise or recommend or sell investments. We don’t provide any type of advice. What we do is educate investors on what are the possibilities and then we give the investors the keys to be able to ultimately unlock their retirement plans and be able to invest into the alternative assets that they deem as a best fit. So number one is just lack of education. The good news is, David, there are all types of opportunities to educate yourself on self-directed IRAs. This is a great start. This podcast, I do nearly a hundred podcasts a year. Um, we have a YouTube channel with all of videos, so there’s more than enough opportunities for folks to get educated. The second I’ll say is investors are afraid to have the brave conversation with their financial advisor or financial planner and move their retirement plans into cash and then move those over into a self-directed IRA to begin investing in real estate. I’ll give you a great example. I just got off a one-on-one consultation with a, um, a perspective individual, um, earlier today. And um, you know, her words not mine, she was afraid to talk to her financial advisor about moving her money from where it’s at now to equity trust because she’s had a very longstanding, um, more than just advisor relationship with that individual, right? It’s sort of become a kinship or a friendship.

David Richter:

Yeah.

John Bowens:

Uh, in some cases I hear of people that they have family members that are managing their money for them. Brothers, sisters, sisters in-laws, right? Uh, you know, other individuals in their family that are actually managing their money. And so when they say, okay, I wanna self-direct cuz I believe I can do better, they start to feel that it’s an adversarial conversation and at that point they might just abandon it altogether. And what I challenge people with is take control of your retirement accounts and do what you feel is a best fit for your portfolio, not what someone else is maybe dictating to you. In some instances, for some folks that’s their best option is to work with someone that can self-manage that can manage their account because they don’t wanna self-manage their account. But if you’re somebody out there that has had success with real estate or someone that is being trained and you feel that you’ve developed expertise and skill around real estate, I would encourage you to take command of your retirement funds and start making the decisions that you feel are a best fit for your portfolio.

David Richter:

Oh, okay. No, I like that, so lack of education and afraid to have those conversations with, uh, your financial advisor. I wanna ask this, what do you think about this one as an A, why they wouldn’t invest? Because I see in the small business world, in the real, especially in real estate investing, uh, companies that a lot of people live deal to deal, you know, that it’s almost like they’re still living paycheck to paycheck, maybe, you know, they’re not able to break out of it. Would you say that’s another reason potentially why someone wouldn’t even think about a self-directed ira? Because, you know, they’re not, their head’s not even above water. Do you, would you put that in the ring as well too, as some of the top, as one of the top things that might keep someone from investing in a self-directed ira?

John Bowens:

Yeah, I would agree with that, David. That’s a great point. Um, in my years I’ve, I’ve been doing this for 15 years.

David Richter:

Oh wow.

John Bowens:

And I saw a lot of people after the great recession, they didn’t know about self-directed IRAs, but they knew they wanted to be involved in real estate. And I saw a lot of Americans totally wipe out their IRAs and 401ks and other retirement plans and pay significant taxes and penalties to get the money out to go use that money to build their real estate business or buy and sell real estate. And so what I encourage folks to look at is the ability to be able to keep the money in the retirement plan. So don’t raid your IRA or 401k. UN unfortunately America has, um, encouraged people to, I’ll say, uh, raid their IRAs in 401ks when the going gets tough. Use your IRA as a source of financing. And don’t get me wrong, in some instances if someone can’t put a roof over their head or feed their children, I would argue that it does make sense to tap into your IRAs. But unless you have absolute dire straits financial situation, you should never tap into your IRA or 401k because the ira, whether it’s Roth traditional, these are highly privileged, highly tax privileged accounts. So when I buy and sell real estate with my IRAs, if I’m following all the rules and guidelines, all of my profit is tax deferred or tax free. We can talk about a Roth IRA where I can put money in after tax and it grows tax free through my real estate investing activities. And then when I take the money out after the qualified retirement age of 59 and a half, I pay 0% tax. And so in no way, shape or form do I ever wanna raid my ira. And going back to your question David, I would say absolutely I find that, you know, some investors are thinking too near term and they’re not thinking future retirement, what am I gonna do when I’m 65, 70 years old? As I create wealth, I need to also look at how do I keep that wealth? And IRAs can also be great estate planning and legacy planning tools, especially a Roth IRA to give you for instance David, I have a couple that started back in about 2011. They’ve done over 20 real estate transactions and they’ve grown their Roth IRAs from about $200,000 to over a million dollars in properties and they’re generating $130,000 in cash flow and that $130,000, they pay 0% tax. Those cash flowing rentals that they have in their self-directed Roth IRAs, they’ll never pay long-term capital gains tax. There’s no recapture depreciation, there’s no schedule E filing, there’s no tax returns, it’s all tax-free in their Roth IRAs. And when they leave it to their children or leave it to their grandchildren, it’s left to those children or grandchildren tax free. So I encourage folks to be very disciplined in contributing to their IRAs every year, maximizing the investment opportunities within those accounts. Understandably, we’re not gonna do every single investment in our self-directed IRA and some transactions, like I said at the beginning, are just better served outside of our ira. But the idea is look at, okay, how many transactions should I do a year in my IRA versus how many do I do outside of my ira? So for example, my wife and I, we look at it as a rising tide every year. We wanna keep our IRAs growing, contributing, putting money in there through our paychecks and through our IRA contributions and then obviously investing that money into real estate, making good returns and then outside of our IRA continuing to build our real estate business. Hence the rising tide approach that we’re talking about here.

David Richter:

Okay, I like that. I used to, I used to work with a guy where he would do enough deals and spend enough money to be like break even on his real estate side, but then he put several of his other properties that he did that year in his Roth and I’m like his Roth self-directed ira and I’m like, what are you doing? Like you don’t look profitable, like don’t you need the profitability over here? And he is like, well I’m putting it all in my Roth ira, like that’s where I really want, you know, the biggest ban for my buck. So I’m gonna put some of the juiciest deals over here, I’m gonna put some of those. And I was like, that was mind blowing to me cuz he is like over here, you know, I’m trying to not show as much profitability as possible in my business, but then over here in the Roth, like I want to, you know, do a flip in there or whatever, you know, and like get some, generate some actual cash that’ll be tax free. So I thought that was a great strategy. And that sounds like kind of what your suggestion here is looking, sitting down and saying this is how many I need to do in my business, but then this is how many I want to try and put into my IRA this year and grow that. Are there any types of transactions in the, let’s just, let’s talk about the single family residential world that they can’t do like wholesaling fixing and flipping or rental property. Like are any types of exit strategies discouraged from doing that? I know you might not be able to give me a definite answer. There’s lots of gray area I’m sure, but is there any type of deal they can’t do inside of a self-directed IRA, on that side?

John Bowens:

Yeah. So I’ll give an example of a transaction that um, you know is a, call it realistic transaction.

David Richter:

Yeah.

John Bowens:

Uh, an investment that I did as uh, call it a case study and then I’ll mention some items with respect to what you can’t do. So what you can do, um, I bought a property David in March of 2020 with my self-directed Roth in traditional. And I bring up this example and I like this example because it shows folks how they can get creative with their real estate transactions in their self-directed IRAs. So you could actually partner multiple accounts together. So I have a traditional and Roth, I partner these accounts together to acquire a property in March of 2020. This property was right outside of Cleveland, Ohio in a city called Maple Heights. I bought the house for $63,000. The house had two units, there was an upstairs and downstairs unit and both units could command a rent of seven 50 a month. Now I inherited tenants and I inherited about $15,000 in deferred maintenance.

David Richter:

Okay.

John Bowens:

I bought the property David from a motivated seller. So this was a good opportunity that I found where I could buy the property, I could use my IRA money to acquire the property and of course pay for all the repairs, which is the way I have to structure it. And then after the repairs are done and some time passes and I get the property stabilized with good tenants where it’s cash flowing, I have good leases in place at that point I can then sell the property and make my long-term gains and those long-term gains would flow back into my respective self-directed accounts. Traditional and Roth. So I had tax-deferred growth and I had tax-free growth. So long story short, after we took care of the deferred maintenance and we got it stabilized, we sold the property in May of 2022. So just about two years later we sold the property and we made a 32% annualized cash on cash return. Our profit to our self-directed accounts was about $35,000 and we paid 0% tax.

David Richter:

Nice.

John Bowens:

We paid 0% tax because long-term gains, just like the sale of stock and the stock market is not subject to long-term capital gains in a retirement plan. So our IRAs were exempt from long-term capital gains. We didn’t have to worry about recapture depreciation on that piece of it. And all those profits went back into our ira. We saved $5,000 in taxes. So all along the way our IRAs paid for the expenses and then all rental income was flowing back into the self-directed IRAs. And then when we sold the property, all of our profits went back into the self-directed IRAs. There were two tenants upstairs and downstairs paying seven 50 a month. So the gross rent was about 1500 and the net operating income was anywhere between 1200 to 1250 for the buyer that bought the property from our self-directed accounts. Uh, and again, the annualized cash on cash return over those two years was 32%. So that’s one example. I’ll call that more of a rent to flip. I wouldn’t necessarily call it a traditional flip. It was more buy from a motivated seller for a discount, add value and then sell and make a profit. Now as far as what you can’t do with your ira, so I’ll use that example, here’s some things that I could not do at that property. Let’s say that I own the property personally. So John Bowens owned the property, let’s say going back five years ago and I wanted to use my IRA money and buy it for myself. I couldn’t do that. That would be considered a prohibited transaction under 49 75 of the internal revenue code. I couldn’t use my IRA money and loan myself money to buy that property. That would also be a prohibited transaction. I couldn’t buy that rental property and then lease it to a son or daughter or a parent or grandparent. You can’t engage in transactions with what are known as disqualified persons, which for all intents and purposes are people up and down the family tree ourself, our spouse, any businesses that we own and operate. And then the last one would be, I can’t do the work myself personally. So if I own real estate in my ira, I cannot provide services and services could be considered if I was physically doing the work on the property myself. So the rule of thumb that’s used with self-directed IRAs owning real estate is you can do the desk work but you shouldn’t do the physical sweat equity. So my rule of thumb, David, is when I drive to a rental property that I own in my self-directed accounts, I pull in the driveway, I get out, I talk to the tenants, I talk to contractors, I talk to the electrician, I talk to the plumber, I key into the house, I put a lockbox on the house, I have a lease, I give it to the tenant, right? But the moment I drop my tailgate and I start pulling tools or even worse an entire tool belt out of that truck and strap it on, that’s when I know I’m crossing the line. So I just stay away from dropping the tool, the tailgate and uh, that gives me peace of mind and I sleep well at night knowing that uh, I’m not potentially engaging in a prohibited transaction.

David Richter:

Yeah, I was gonna say, I’m pretty sure that’s a deep rabbit hole too of like, there’s a bunch of things you gotta make sure as well that you’re falling. And that’s why I like equity trust cuz they provide education. They’re gonna say, here’s, here’s like here’s the guidelines, here’s rules to make sure that you fall within this. Cuz if you do you the the benefits far outweigh the things that you can’t do with it. So, and you know, there’s a lot of things that you are able to do with it as well too. Just like you was talking about, I mean being able to make that money like you did like tax free the whole time. Then at the end too as well, you know, as uh, when you sold the property, I mean those are, those are real dollars and cents. And I had someone just at an event where we were speak about like his self-directed IRAs and he just gave the example of like if you know, double the dollar from every day to the end of the month, you know, or double a penny or whatever, it’s like 10 million or whatever it is. But if you tax it at just like a typical tax rate, it turns out at the end of that 30 days it’s like $88,000 <laugh>. Like,

John Bowens:

Yeah

David Richter:

It was an incredible difference. So that’s why this is so good and I’m glad you’re giving this opportunity and this outlet for okay if you want to go down this road, we’re obviously not gonna be able to talk about everything here on this podcast of like all the different, the benefits, all the different things to make sure here’s the paperwork and all how you have to structure it. But this is a good option if you’re listening to this saying I want keep more and I don’t, I wanna put some of this away to make sure I don’t have to pay taxes on it. Now let me ask this, do you offer traditional and Roth, but do you offer other types of accounts? I don’t know, like HSAs or the Covered Dells or like do you offer other tax shielding accounts as well too?

John Bowens:

Absolutely. So there are seven different self-directed accounts and equity trust we can serve as custodian administrator for all of these seven accounts. You have your traditional and Roth IRA tax deferred and tax free. Of course those are your two most common retirement plans.

David Richter:

Yeah,

John Bowens:

Most people that have 401ks, 4 0 3 [inaudible] thrift savings plans, IRAs, Roth IRAs, SEP IRAs, you know, they move those over into either a traditional or Roth depending on the circumstances. But then there are David three business retirement plans, the SEP ira, simple IRA or SOLO 401k.

David Richter:

Yep.

John Bowens:

Especially for entrepreneurs, self-employed individuals, the SEP IRA or solo 401k as well as the simple ira, let me not discount that one. But the SEP IRA and solo 401K more specifically we find are very popular amongst self-employed individuals because if you’re structured right, you can establish one of these business retirement plans and you could potentially contribute up to $66,000 when you’re under the age of 50. And when you’re 50 and over with a solo 401k for example, if you’re making enough money as a self-employed individual and paying taxes of course on that money you gotta be paying taxes, Medicare and social security. You could potentially have upwards of 73,500 for those that are 50 and over and there is what’s known as a Roth component to the solo 401k. And you can do the same for a SEP ira. So if you don’t care about tax deductions now you just wanna create a lot of tax-free dollars and a Roth and grow it 100% tax free. As a self-employed individual, you may consider a SOLO four Ohk or SEP ira. And then last but not least, there are two accounts that don’t fall under the purview of retirement plans, but they are tax efficient accounts that you can self-direct into real estate. The first is a health savings account. So a lot of people don’t, aren’t aware of the fact that they can self-direct their HSA into real estate. And I have plenty of folks that are doing that. Uh, for example, I have one client that all he does is private money loans. So he makes loans to real estate investors and buys existing trustees and mortgage notes and the way he structures these transactions, he’ll make a loan, money gets paid back and he’ll rinse, repeat reload, reinvest into another deal. And he is been doing this for seven or eight years now and he moved over his HSA and started partnering his HSA with his traditional IRA to fund some of these private money loans because he didn’t have enough money in his HSA to start to be able to fund an entire loan, he was funding 70 a hundred, 150 $200,000 loans. So he only had maybe $30,000 in his HSA to start. So what he did is he partnered his HSA with his traditional and Roth IRA to fund some of these private money loans. And then last but not least, there’s the Coverdale education savings account. So think for children, grandchildren you’re trying to save for their education. That could be for K through 12 or college tuition. A covered L education savings account could be a great vehicle to do that because it grows tax free just like a Roth ira. And when you pull the money out and you pay for K through 12 educational expenses or higher educational expenses, it’s 100% tax free. Uh, an example there, I had a client, uh, this was several years ago, uh, he’s in the land buying and selling business and he bought a, it was about a one and a half acre lot and right outside of Nashville, Tennessee, he bought this lot for $8,000 and he partnered his three children’s covered our education savings accounts and then 60 days later he sold that property to a developer that actually subdivided and built three different houses and uh, he sold it for $60,000. He made a 50,000 after closing costs, he made a $50,000 net profit, all of which was tax free

David Richter:

Nice

John Bowens:

Into those covered education savings accounts. So, uh, I know that was a lot for folks to probably consume, but I think the important takeaways are that you have multiple accounts that you can fund. Uh, as long as you’re eligible every year maxing out your contributions, creating more tax-free dollars and then you can partner these accounts together to finance, whether it’s a rental property or it’s a private money loan or you’re investing in a real estate partnership or syndication. Lots of ways that you can utilize the IRA funds. And like I always say David, and this goes back to what you mentioned before about the gentleman that you had referred to that was speaking at an event. What I heard there was compounding interest in the absence of taxation.

David Richter:

Yeah.

John Bowens:

So when you eliminate the variable of taxation, your compounding effects become amplified. I, in other words, by eliminating the variable of taxation, you increase your annual yield and if you can increase your annual yield then you can ultimately get to your retirement goals and your financial goals in a shorter period of time. And that’s really been my mantra since I came here 15 years ago and met our company founder Dick Sich. It’s helping people get to their retirement goals and their financial goals in a shorter period of time in a self-directed ira. If your transactions are structured properly and you’re working through the process and you’re doing your due diligence, you could potentially get to your retirement goals and your financial goals by leveraging that component.

David Richter:

Awesome. This has been awesome. We’re about done here. Just have like one more question then we can wrap it up. But if you’re listening to this podcast, the prop first REI podcast is about making sure you’re keeping more of the money you’re making and I don’t know if there’s much better way than to be able to keep it from, you know, the taxes and those types of things that will keep you from getting to your full potential as a real estate investor cause they literally have these vehicles out there, these, you know, self-directed IRAs that you can actually invest in real estate and you could do the things you’re already doing and then just not pay as much <laugh>, you know, like at the end of the day and at the end of, you know, like whether you put it in the self-directed IRA or if you put it in your college, you know, kids’ education or whatever, that’s where you’re gonna be growing that money. You know, either tax free or tax deferred depending on the type of account that you have set up and what makes sense for you. So this has been awesome. So John, how do people get to Equity trust? How do they get on a call? Like if they wanted to, I don’t know, is it just equitytrust.com or like how do you we get in touch with equity?

John Bowens:

Yeah, really easy to find us. Our website is trustetc.com, so it looks like trust etcetera.com. Again, name of the company’s equity trust company. Very easy to find us online. You can call in and speak with one of our agents. Uh, we don’t sell investments, we don’t offer investment opportunities. So when you call in and you speak to one of our agents, they’ll answer your questions about how you could potentially utilize a self-directed IRA to invest in real estate, uh, sort of coach you through that process and then when you’re ready to move forward with opening an account, they can help you do that. Uh, you can also find us on YouTube. So I encourage folks to go to our YouTube channel, subscribe, we have all types of videos on all types of material and content around self-directed IRAs. Um, our YouTube channel much different than maybe some other YouTube channels. Um, it’s not all hype, it’s not, you know, the flashy, um, you know, cars and houses and things like that. Um, this is very much designed for people to learn about how to actually invest in real estate with a self-directed ira. So call it the more real how-to application. So those are the two best places, uh, David for folks to uh, find material about equity trust and maybe get started with some practical next steps.

David Richter:

Oh, good stuff. And that made me think too, there’s no commissions then, correct? Like this is just basically per transaction or something like that because that’s where a lot of the <laugh>, a lot of the other side of traditional financial institutions, they have a bunch of the commissions that they make from the what they’re actually pushing, like the stocks and all of that. So I thought that was pretty cool too cuz then it’s just like, here’s what it costs to do this different thing and there’s not gonna be a surprise popup that, I don’t wanna put words in your mouth, but That’s correct.

John Bowens:

That’s, you’re right David. Um, we charge a maintenance fee depending on the portfolio value of the account.

David Richter:

Yeah.

John Bowens:

So we’re not charging a fee based on transactions or selling investment products or AUM or any of those other sort of terms that you’ve heard in traditional finance. So it’s a very straightforward, here’s the dollar amount that you pay every single year to put it into perspective for you. David, an account holder that moves over let’s say $150,000, they only pay a $500 maintenance fee and that’s all inclusive. It includes transactions, investments, record keeping reporting. We give our customers access to an online, what we call my equity login so they can transact digitally through their equity trust ira. If they’re buying real estate, making private money loans, investing in real estate syndications, they can essentially upload all their documentation into a secure portal and then make their request to have funds sent out for their investments. So it’s uh, it’s an easier way for folks to be able to self-direct their IRA without having to uh, you know, always rely on, you know, calling in and speaking to someone or rely on waiting for someone to do something. Uh, a lot of that folks can do on their own digitally, which we found a lot of our customers are very much in favor of now that we’re in the digital age so to speak.

David Richter:

Yeah.

John Bowens:

But we do have 423 associates, uh, as of the time of this event, uh, 423 associates that are standing by that service our customers day in and day out. So we always encourage folks to call in, ask questions, uh, we’ll handhold you through the whole process. Every new customer has a single point of contact onboarding specialist that is actually your sidekick through your first transaction. So we can help you get up the speed on everything that you need to know and make sure you understand the process.

David Richter:

Yeah, that’s great. As a client of equity trust, I’ve had good experiences with customer service, getting things done quickly. I love the online interaction as well too. The, my equity and once you get that login, so yeah, I’m a believer for sure cuz it’s been a very simple process and that’s why I have them on. Cuz I want you, if you listen to this podcast and you’re like, oh man, you know, like I want to start, uh, self-directed ira, but I feel like I’m still, you know, like I’m still below water. Like I gotta get my head above first. You could still head over to simple cfo.com, our company to make sure that we can help you get profitable and making sure that you can even think about something like this. And if you’re like, Hey, I’ve been looking for something like this, like I’m profitable, I want to go, I wanna get this done, I want to get this set up. I definitely endorse Equity Trust. They’ve been amazing with what I’ve been able to work with them on. So you could go to, that was trustetc.com. Correct.

John Bowens:

You got it. David

David Richter:

Trustetc.com. Remember if you’re listening, make profit a Habit. And then John, thank you so much for the knowledge you dropped today.

John Bowens:

Thank you David.

Outro:

This episode of the Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.