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Rene: Hi! I’m Rene Nelson with PacWest real estate and today my guest is David Moore from
IRA equity advantage. David, tell me a little bit about using a check book IRA and how that
works.
David: Sure. Well today, you know, a lot of people are sitting there looking at what their
money’s done over the last decade and a lot of people come through my office, their
response is really very little. So, historically, people have had a couple of different courses
to take, put money into real estate or other off Wall Street investments. I joke with - off
Wall Street, you sort of hear the self-directed world discussed traditional or non-traditional
investments and alternative investments. I really, sort of disagree with that whole thing.
I think it’s hurt - very few if any investments that are older than real estate, more established,
more stable but, you know, really, it’s been one of those issues where people didn’t
know how to get there. And, to establish basic account really you’re just going to move
your money from a custodian who does not allow self-direction to one that does. It’s not
a specific type of account. It’s not a legally defined term. It’s sort of a term that describes
an account that allows you to buy what you want to buy. So, we like to say, invest in
what you know. But, first thing that’s going to happen, you got to move the money from
custodian to custodian as that’s happening we’re going to put a limited liability company
together and that limited liability company could be a single investor, it could be a
series of investors, it could be an investor with both their personal money and qualified
money. Any combination of work, we just have to make sure it is done right. And then as
the money is moving, we’ll have the LC put together, get that to our client at the oracles
of organization, a tax ID number, they’ll go to the bank of their choice, open a business
checking account, we direct the custodian to make an investment and the money gets to
that account and they literally have the ability to write a check to make that investment.
So, it’s really an incredible vehicle to get things handled for people.
Rene: Okay. And, can they use that check book to also make improvements once they own the
property, can they make improvements to the property using that check book?
David: Certainly! They can manage those improvements. They can’t get out there and swing a hammer.
It’s sort of one of those things. It’s funny in that world because if you look at
what Sweat equity is considered and known as self direct IRA’s. Look at what Sweat
equity does, Sweat equity increases a value of an investment without a corresponding increase
in basis. Ultimately, when that money is pulled out of that account, the government would
be realizing a greater amount of tax revenue if they would allow that but it’s something
that’s forbidden if the investment gains any benefit from the individual’s actions,
that’s a prohibited transactions, we have to be careful with what they’re doing. And,
you know, although the process is simple, it’s filled with landmines, you really need
to ask good questions and do things right from the beginning.
Rene: You bet. So, if I have a client that needs more information can they call you on
the phone and talk to you about it and get some more information.
David: No.
Rene: [Laughing]
David: Love the call! You know, the only dumb question’s the one that’s not asked.
Rene: Sure.
David: So, our attitude about is we want to help people get where they want to go and
a lot of people just have no idea what’s possible. So, if they’ve got questions please
have them give me a call and reach me at 800-4751031 or 5036351031, email info at iraadvantage.net.
But like I said call, write, ask the questions because I’m sure you’re going to have
them and a lot of times people have more questions after they’ve spoken with us. They get our
information and they sort of start reading through it and if nothing else, it’ll help
them fall asleep if they’re late in reading some of that stuff.
Rene: Well, I know you have some really good articles on your website. Remind me of your
website.
David: It’s just IRAadvantage.net. Thank you.
Rene: Okay. Check that out. IRAadvantage.net. Thank you.