Presents: David Duggan Senior Account Executive David Duggan Senior Account Executive Assembling Your Private Bank: Leveraging Self-Directed IRAs

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What You Will Learn Today 7 Tax-Exempt Accounts – Compounding Interest Real Estate and Alternative Investment Options Financing Options – Partnering Strategies Assembling a Private Bank of IRA Investors Getting Started – Transaction Process/Case Studies

P = principal amount (the initial amount you borrow or deposit) r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest. n = number of times the interest is compounded per year

IRA vs. Non-IRA Investing Tax Savings $141,074 Calculator Access:

Individual Accounts Traditional IRA Roth IRA Small Business Plans SEP SIMPLE Solo 401(k) Alternative Accounts Coverdell Education Savings Account (CESA) Health Savings Account (HSA) The (7) Tax-Exempt Self-Directed Account Types

Alternative Investments REAL ESTATE Single Family Homes Buy and Hold Rehab and Resell Apartment Complexes Mortgage Notes/Trust Deeds Non-Performing Notes Tax Liens/Deeds Real Estate Options Wholesaling Subject-to’s

Commercial Real Estate Vacation Rentals Raw Land – Developed, Undeveloped and Pre-Developed Mobile Homes LLC LP, C-Corp - Real Estate or Non Real Estate Private Placements: Debt and Equity Oil and Gas Precious Metals Factoring FOREX Equipment Leasing Show Horses Alternative Investments

Funding the Account: 1) Rollover from 401(k), 403(b), 457, ESOP 2) Transfer from an existing Traditional IRA 3) Out-of-pocket contribution 2014 $5,500$5,500 contribution when under 50 $6,500$6,500 when 50 and over Irrespective of earnings/rollovers/transfers IRA Traditional IRA Tax -Deferred Distributions for personal use may begin at 59 ½ - premature distributions result in a 10% penalty

Inception Year: 1998 After tax Individual Retirement Arrangement (IRA) Eligibility Requirements: Earned Income Modified Adjusted Gross Income (MAGI) : Single Filer Phase Out: 116k-131k Married Filing Jointly Phase Out: 183k-1913k Solution: Contribute to a Traditional/SEP convert to the Roth IRA Solution: Contribute to a Traditional/SEP convert to the Roth IRA IRA Roth IRA Tax-Free William V. Roth, Jr. Senator from Delaware

Funding Your Roth IRA Roth IRA Contribution: $5,500 $6,500 - Cannot exceed $5,500 when under 50 and $6,500 when 50 and over (2014) Roth IRA Transfer: - Partial or full trustee to trustee transfer Conversion from tax-deferred account: - NO MAGI limits for conversions (100k pre 2010) - Convert from Traditional IRA - Convert from 401(k) - Convert from SEP IRA - Convert from SIMPLE IRA

Internal Revenue Service Please note: Amount converted is added to your ordinary income $100,000 Roth IRA $100,000 $20,000 20% effective tax rate Traditional IRA/401(k) Transitioning Traditional IRA assets (tax-deferred) to a Roth IRA (tax-free)RothConversion

Internal Revenue Service Please note: Amount converted is added to your ordinary income $100,000 Roth IRA $50,000 $10,000 20% effective tax rate Traditional IRA/401(k) Partial Conversion Convert In Stages

In-Kind Asset Conversion Internal Revenue Service Please note: Amount converted is added to your ordinary income $50,000 Roth IRA $50,000 $10,000 20% effective tax rate Traditional IRA/401(k)

Finance the Deal Methods to 1)Sole Ownership 2)Partner/Undivided Interest 3)Debt Finance – (Non-Recourse Loan)

Disqualified Persons and Prohibited Transactions Your IRA cannot transact business with a disqualified person What constitutes a transaction? Defined in the internal revenue code as a: Sale…,lease…,lending of money or other extension of credit…, furnishing of goods, services, and facilities…

IRC 4975 Account Owner (Fiduciary) Spouse Decedents Ascendants Spouses of children Entities - LLC, C-Corp, LP owned 50% or greater by disqualified persons An officer, director, or 10% or more shareholder, or highly compensated employee (earns 10% or greater of the companies wages) of a company owned by the IRA owner or other disqualified persons Disqualified Persons

Placed property under contract for $105,000 May 16, requested earnest money check for $1,000 from her Roth IRA to open escrow June 7, 2013 – sold property to an investor buyer she met at her local REIA Jan’s IRA received a check for $38, (after expenses) $38, $1,000 Deposit = $37, TAX-FREE Duration of Investment: Less than 30 days Jan - St. Louis, MO Wholesale

Wholesale Overview Kehrsgrove Placed property under contract for $406,173 - Equity Trust Company Custodian FBO Act#ZXXXXXX, Roth IRA or Assigns to… July 11, 2014 – requested earnest money check for $1,000 from my IRA to open escrow August 28, 2014 – sold property for $450,000 to investor/buyer IRA received a check for $44, (after expenses) $44, $1,000 Deposit = $43, TAX-FREE Duration of Investment: less than 60 days

55 Ladue Estates Project Overview July 24, 2013 – bought property for $310,000 July 29, 2013 to January 27, 2014 – scheduled 5 payments to contractor June 13, 2014 – sold renovated property for $767,000 IRAs received $163,806 (after all expenses) - duration of Investment: 11 months

55 Ladue Estates Purchase Gary’s Roth IRA – 55% EMD: $1,650 $168, Brittany’s Roth IRA – 3% EMD: $90 $9, Jan’s Roth IRA – 42% EMD: $1,260 $125, $306,737

55 Ladue Estates Renovations Gary’s Roth IRA – 55%$163, Checks Brittany’s Roth IRA – 3%$8, Checks Jan’s Roth IRA – 42%$124, Checks Renovation Cost: $296,457

55 Ladue Estates Sale Gary’s Roth IRA – 55% $421,850 $90, TAX FREE Brittany’s Roth IRA – 3% $23,210 $4, TAX FREE Jan’s Roth IRA – 42% $322,140 $68, TAX FREE Proceeds from Sale: $767,000 IRAs received $163,806 (after all expenses)

CESA Coverdell Education Savings Account Contributions $2,000 Maximum (Non-Deductible) Until Age 18 Growth is 100% Tax-Free Withdrawals Qualified Higher Education Expense (By Age 30) Tax & Penalty Free Accredited College, University, Vocational or Private Grade School

Cincinnati, OH Purchased using daughter's CESA account Bob – CESA Investment

Purchased in daughter's CESA account in Dec 2012 for $5,000 Sold in February for $15,600 with owner financing on a land contract with $695 down Annually $ PI/month for 10 years 8% interest ($15,600 sale price $225PITI) – $2,170 Annually IRR = 48.57% Bob – CESA Investment

Individual Accounts Traditional IRA Roth IRA Small Business Plans SEP SIMPLE Solo 401(k) Alternative Accounts Coverdell Education Savings Account (CESA) Health Savings Account (HSA) The (7) Tax-Exempt Self-Directed Account Types

Step: 1 Step: 2 Step: 3 Transaction Processing

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