1. Self-Directed 401Ks / IRAs Investing Retirement Funds in Real Estate

2. Bryan P. Calderon Director of Business Development United Country Strategic Partner Lead (949) 705-4554 Bus (949) 233-5866 Cell Bryan@Accuplan.net www.accuplan.net/OC/

3. Benefits of Self-Directed IRAs and 401ks For You Increases Your Buyer Pool Increases Your Buyer Client Purchasing Power Offers Added Value Service vs Other Realtors

4. Benefits of Self-Directed IRAs and 401ks For Your Clients Provides Investment Alternatives Other Than Stocks and Bonds – Under valued real estate right now – Best investment over the next 5 – 10 years Personal Control of Investment Choices Investment in What You Know and Can Visit / See Tax Savings Provides Funding Alternatives Eliminates Bank Credit Availability Issues

5. Real Estate Investment Choices Single family homes Multi-unit homes Apartments Condos Commercial property Developed and Undeveloped Land Leveraged property Mortgages, leases

6. Setting Up a Self-directed(SD) IRA 1.Identify a Self-directed IRA Administrator – Example: Accuplan Benefit Services 2.Set up an account ($50+) 3.Rollover or transfer existing IRA or 401k funds 4.Identify desired real estate 5.Purchase in the name of the SDIRA

7. Case Studies 1.Rental property 2.Rental property with debt 3.Property utilizing an LLC

8. Case Study – Rental Property John would like to purchase a rental condo for $100,000 he believes is a good investment He transfers $125,000 from his current IRA brokerage firm to a SDIRA account administrator.

9. John initiates a contract to purchase the condo in the name of the SDIRA. John directs his SDIRA to purchase the property (ex: “Direction of Investment Letter”) The SDIRA administrator sends the escrow deposit of $5,000 to the title company and coordinates the closing Case Study – Rental Property

10. John reads and approves all closing documents and forwards to the SDIRA administrator for signatures at closing. The SDIRA administrator wires the SDIRA funds to the title company to close. The warranty deed is recorded and sent to the SDIRA. Case Study – Rental Property

11. The SDIRA is now the owner of record on the warranty deed John decides to hire a property manager – They find a tenant to lease the unit – Rents and expenses are handled by the property manager – The condo has a positive cash flow of $450 tax deferred John monitors his account via on-line statements Case Study – Rental Property

12. Two years later, the tenant offers to purchase the condo for $150,000 A sales contract is prepared for $150,000 The SDIRA Administrator coordinates the closing with the title company John reads and approves all closing documents Proceeds, after closing costs, are wired back to his SDIRA account Case Study – Rental Property

13. Realized Return for the SDIRA Investment Initial Investment: $100,000 Positive Cash Flow ($450 x 24 months) = $ 10,800 Gains from Sale ($150,00 - $100,000) = $ 50,000 Closing Costs = $ 20,000 Return = $40,800 / $100,000 = 41% Tax Deferred Case Study – Rental Property

14. Same scenario as previous example, but John only has $50,000 in his SDIRA to invest. Seller agrees to hold a $50,000 non-recourse note for the remaining $50,000. – Non-recourse can only reposes the property. – The borrower will be the SDIRA. – Documents are reviewed by John and executed by the SDIRA administrator. The SDIRA is the legal owner of the asset and will be responsible for monthly mortgage payments and other expenses. Case Study – Rental Property with Debt

15. Realized Return for the SDIRA Investment Initial Investment:$50,000 Debt: $50,000 Positive Cash Flow ($450 x 24 months) = $ 10,800 Debt Service (7%)= $ 7,000 Gains from Sale ($150,00 - $100,000) = $ 50,000 Closing Costs = $ 7,500 Tax on 50% Profits (UBIT* – non IRA debt funding %) = $ 6,500 SDIRA Return = $13,650 / $50,000 = 27% Tax Deferred * Unrelated Business Income Tax

16. Single LLCs and Multi Partner LLCs Can include multiple partners Can include SD IRA, personal funds and debt Cannot be paid for management Checkbook control benefits Esp. Important when buying at auction Prorated distributions occur at liquidation

17. Disqualified Persons Cannot sell, exchange or lease property, lend your IRA money or credit, provide goods or services or use of the property. Vertical family members; spouse, children, parents, grandparents, grandchildren, and their spouses. *Siblings are “NOT” considered Disqualified* Anyone providing services to the Self-directed IRA

18. Bryan P. Calderon Director of Business Development United Country Strategic Partner Lead (949) 705-4554 Bus (949) 233-5866 Cell Bryan@Accuplan.net www.accuplan.net/OC/

19. Self-Directed 401Ks / IRAs Investing Retirement Funds in Real Estate