Self-Directing: Unlocking your IRA

June 19, 2012

Did you know that you can invest in real estate, mortgages, leases, and other asset backed investments inside your retirement plan?

Indeed, since 1975 self-directed plans have been available, although relatively few IRA holders have taken the time to understand their options and take advantage of such retirement plans.

There are three things you should know when you self-direct your retirement plan:

  • Which retirement plans are best – Traditional IRA, Roth IRA, SEP, Simple or Individual(k)
  • What types of investments you want to make within the plan
  • Understand the IRS rules of self-dealing and prohibited transactions

The IRS rules regarding prohibited transactions are not too complex, yet one should consult a tax advisor for specific advice. Disqualified people include your immediate family (except siblings) employers (in a qualified plan), certain partners, fiduciaries and other categories spelled out in IRS code. IRA owners may not borrow money from their IRA, sell property to it, receive unreasonable compensation for managing it, or use it as security for a loan. There are also several named categories, such a collectables which also may not be held by your IRA.

The opportunities outside these prohibited transactions are significant. You may buy, sell or exchange investment property inside your self-directed retirement account. You can partner with friends, relatives and business associates to purchase property, and then lease it to anyone that is not a disqualified person. You can roll property from one retirement plan to another – or even take property from your plan as a distribution.

We have seen clients form investment groups, combining IRA and non-IRA funds to purchase and hold property, rehab and turn properties or simply lend out the funds in the form of notes and mortgages.

In addition to these ideas, an IRA may also invest in partnerships, LLCs, private stock offerings, loans (both secured and unsecured), tax lien certificates, purchase options, joint ventures and other investments.

So if you are confident in your abilities to make your own investment decisions, have the desire to reduce or eliminate the tax consequences on your gains, and have the resources to invest – self-direction may prove to be a wise choice for your retirement plan.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando. He can be contacted at 407-367-3472 or

Banking on your IRA – Through Lending

June 14, 2012

A few years ago, a trio of elderly investors arrived at the reception area of my office in Orlando unannounced and without an appointment, a relatively rare occurrence. Being a good host, I invited them into my conference room, offered them coffee – then I placed several brochures in front of them, describing our self-directed IRA services.

I presumed the group had come to learn more about our business, so I immediately launched into my normal impassioned message on the power of self-direction by “Unlocking Your IRATM”. No sooner had I started, the lone female jumped up and said “Thank God – you do self-directed IRAs and you are local!” Evidently, the group had been self-directing their IRAs for years, but their retirement account administrator’s company had been bought out by a large corporation out of state and they were now frustrated by long delays and poor service. The spokeswomen of the group said; “we have been issuing mortgages from our IRAs for over 20 years and we don’t want to stop now!”

As President of NuView, a leading self-directed IRA administrator in Orlando, I’ve come to appreciate the passion that some of our clients have for lending their IRAs. There can be many reasons that individuals choose this avenue for their retirement plan investments:

  • Easy to Manage: Unlike most real estate purchases, lending through your IRA generally requires minimal management once the loan is in place.
  • Provides Liquidity: While some LLC, Private Placement or Real Estate investments may have a long gestation period, loan payments can be structured monthly, quarterly or annually, providing cash balances that are especially important for individuals that require routine withdrawals or those facing required minimum withdrawals after reaching the age of 70.5 years.
  • Permits Flexibility of Terms: The IRA holder can create the terms of the note to properly reflect the amount of risk he is willing to take vs. the amount of interest that the borrower is willing to pay. For example, the down-payment or interest rate can be increased based on the strength of the borrower’s financial statement or credit rating.
  • Provides Security: Loans can be secured by first or second mortgages, providing the IRA recourse should the borrower default. In the unlikely event that foreclosure is required; the IRA should pay any expenses in obtaining payment or collection on the loan.
  • Can Result in Significant Returns: Our account holders issue first and second mortgages from their IRAs at rates from 8% – 16%, with many charging loan origination fees (points). While some clients locate their own mortgages, many rely on local companies that will match their funds to borrowers, or will aggregate several IRAs into one mortgage.

As with all investments that you make, we would suggest that you speak to your legal and financial advisors regarding the structure of any loan that you would issue from your self-directed IRA. Many times title companies are happy to provide the basic note and mortgage forms in order for you to get started.

I would encourage you to our office in Orlando for more information as to the very basic process by which, you too, can become an impassioned lender of your IRA.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando. He can be contacted at 407-367-3472 or

Why Own Gold, Silver, Platinum or Palladium in an IRA?

May 29, 2012

Only an IRA administrator would likely be aware that the ability of a private US citizen to own gold was returned on January 1, 1975. It shares a birthday with the first Individual Retirement Arrangement (IRA) – offering a tax-advantaged savings plan for retirees. The fact that those opportunities can be coalesced into purchasing precious metals for a retirement plan is finally taking root.

Interestingly, as a self-directed IRA administrator in Orlando, we do not and cannot give our thousands of IRA clients any advice regarding their investment choices. A self-directed account by its very nature is not influenced by the record-keeper, custodian or administrator of their account.

So, why are clients self-directing their IRA funds into Gold and other precious? Most cite the uncertainty of traditional investments and the desire to hold something tangible and not tied to a particular currency. While speculators often purchase the physical metals directly, many IRA holders that are trading in and out of their investments prefer mining stock as a surrogate. The majority of IRA custodians are unable or unwilling to hold title to the actual physical metals, although not constrained by the IRS.

For those that prefer the certainty that the IRA sanctioned precious metals provide (non-collectable Gold, Silver, Platinum and Palladium), additional due diligence is prudent to ensure that all the aspects of the investment process is followed.

Integrity: Buy and sell with a dealer with a sterling reputation. Calculate that costs are in line with the value desired, and that the dealer will be willing to sell to an IRA. This will require that based on a purchase request, the dealer will strike and hold a price for up to a three day receipt of funds.

Responsiveness: Deal with an IRA administrator in Orlando that can move quickly and effortlessly through the application and IRA funding process. Most importantly, the time to execute the purchase is critical – so ensure that you have a designated employee’s name and relationship established with your IRA administrator that will take responsibility on meeting your time constraints.

Fidelity of Storage: With an IRA, the holder must designate an authorized storage facility to house the precious metals. Ensure that your IRA administrator will provide multiple depositories from which you can choose, including both in the US as well as Canada. After all, once the purchase transaction is complete, the entire purpose of holding metals for security is diminished should your metals be incorrectly administered at the storage facility.

Whether for a long term investment, or for those seeking quicker gains, IRA clients have shown a historically unparalleled appetite for precious metals. The genie is out of the bottle, and will likely now be a constant in many self-directed retirement accounts.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando. He can be contacted at 407-367-3472 or

Profiting Through Partnering

May 22, 2012

As a season ticketholder of the Orlando Magic, this season has been a difficult one to watch. No matter how well the team performs, there is an overarching feeling of dread, as we may be losing our all-star center, Dwight Howard to free agency or a trade. Although the NBA has become a superstar focused league, what is often lost is that it is the rest of the team, and the coaching that creates long-term and long lasting success.

I have found that in watching our clients self-direct their IRA funds into real estate, the consistent performers are those that have surrounded themselves with teammates and coaches that share a common vision and passion for success. However, many still choose either to “go-it-alone”, or more often “follow-the-crowd”. Often partnering in your investments can be a phenomenal weapon in your arsenal to build wealth when investing outside the stock market.

As I see it, there are a myriad of positives derived from partnering– here are just ten:

Sharing in the Due Diligence: Our clients at Entrust invest in a wide variety of investments in their self-directed IRAs that require a different type of analysis than stock market choices. For example, when purchasing real estate through their IRA, they may need to assess market value, project rental income, determine cost of repairs, and review property liens. While this may be onerous for an individual, through splitting up these duties – and reviewing each others analysis, it can permit the team to look at many more deals and guide them to a much better decision.

Sharing in the Costs and Expenses: Partners may decide to form an LLC to make investments together, rather than individually go on title. They may also anticipate the benefits of structuring deals in a joint venture or even a taxable corporation. Getting solid legal and tax advice before making the investment is advisable, but can be a bit expensive for the individual investor. Through sharing the costs, partners are less likely to cut corners on legal, investment and other advice that could be critical to long-term success.

Sharing in the Ongoing Work: Partnerships are best formed through the open and honest discussion of what capital and efforts each party is bringing to the investment. In the case of real estate, one investor may be talented in the discovery of underpriced rental properties, while another may be well versed in mortgage sources or able to rehab distressed properties. Many real estate investors do so on a part time basis, and it is only through sharing responsibilities that they are able to balance their full-time work with their investment duties.

Learning from Others: NuView IRA in Orlando is a member of six investment clubs throughout Florida, and as such have seen many mentorship programs offered to first-time real-estate investors. These nascent investors will partner with seasoned, knowledgeable real-estate veterans trading ownership and equity for valuable know-how. By having a partner that directly benefits from the success of a joint venture, not only will the new investor gain critical knowledge, but they also participate in the financial rewards of the results.

Spreading the Risk: When I was much younger, my investments in the stock market were far more risk tolerant. I would move from one hot stock to another – and during the internet boom, many of my picks were right. Now I’m a bit older, and have seen some of those choices go to zero value – I desire the safer refuge of diversification. Partnership provides the ability to diversify – by spreading investment resources over a greater number of choices. Through a self-directed IRA, those choices can include almost any type of investment in real estate, as well as mortgages or other collateral backed lending.

Doing More Deals: As a bookend to diversification, partnering can also result in the ability to get involved in more transactions. If you are not certain whether lending money, backed by a mortgage, is better than investing in raw land, through partnering, you may be able to do both. By being actively involved in multiple deals, the opportunity for enhanced returns can be increased.

Building Strategic Relationships: As I mentioned, IRA investors are often part time – and may have other business interests. Through partnering, their primary businesses can be enhanced through the extension of their partner’s relationships. We have had CPAs who self-direct their IRA into loans that are marketed to local realtors. These realtors have become an unanticipated referral network to the CPA’s tax practice as a result of his lending relationships.

Broadening Contacts: Partnering can be such a good source of marketing to some clients that they factor in the value of their partner’s rolodex. We have several real estate rehabbers who lend their IRA to local hard money lenders – for them to re-loan their funds to individuals that want to buy distressed property. These purchasers of property often are referred to the rehabbers by the hard-money lenders in turn to repair the property. (note: due to IRS rules (section 4975), the rehabber cannot work on the same property that his IRA has lent money to acquire).

Increasing Liquidity Options: When property is purchased within any partnership, other partner(s) are a logical potential buyer. If they choose not to exercise an option to buy, due to their intimate involvement with the asset the remaining partner(s) are likely to be actively incented to find a new buyer to replace the departing partner.

Specialize in What You Know: A key characteristic shared by investors drawn to self-directed IRAs is their desire to put their skills to work in areas that they are learning or have mastered. This is only enhanced through partnering. My talents may lie in doing on-line research – and my partner’s in assessing property values through visual inspection. Together we make a powerful team as we buy tax lien certificates at our local courthouse. Of course, if I have the desire to learn how to assess property, I can extend my knowledge through observation of my partner.

Partnering is not the panacea for the weak hearted, the slothful, or the uninvolved investor. On the contrary, it is for the engaged, motivated, knowledgeable person who desires to multiply his/her strengths through the power of association of like-minded individuals. Harness the power of partnership in your investments, and you may unleash the full potential of your retirement future.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando. He can be contacted at 407-367-3472 or