40K FLIPS MODULE 3 VIDEO TRANSCRIPTION

Transcription

1 40K FLIPS MODULE 3 VIDEO TRANSCRIPTION THE FOLLOWING MODULE IS PART THREE OF FOURTEEN OF THE $40K FLIPS SUCCESS. WE HAVE BEEN BUYING AND FLIPPING REAL ESTATE, BRINGING IN A NET PROFIT OF $40,000 ON EACH HOME FOR YEARS. THE GOAL OF THIS CLASS IS TO TEACH YOU HOW TO MAKE MONEY FROM BUYING AND FLIPPING REAL ESTATE, TAKING YOU ON THE PATH OF FINANCIAL FREEDOM SO THAT YOU CAN ENJOY THE PROFIT, GROWTH AND WEALTH THAT YOU DESERVE. 1 P a g e

2 Article I. Introduction Good afternoon, everybody. This is Josh Caldwell and I would like to welcome you to Coaching Module number 3 for 40K Flips. Get All the Capital You Can Handle Part 2: Self Directed I.R.A. s and Retirement Accounts as well as How to Get Tax Free Capital. And we are live on this training class, guys, and I m really excited to introduce to you my fellow speakers and trainers for this class who are Jill Banner, the president and CEO of iplan Group and Mike Gales who is also a Principle in Me in the iplan Group, and is also one of their principle trainer and speakers. Jill, Mike. Welcome to the class. How are you guys doing today? Yes. Thank you for having us. Hey Josh. Thanks. Appreciate it. That s great. Jill, can you speak up a little bit? Your voice is just a little bit faint. I can hear Mike pretty good. I just want to make sure we can hear you. Let me adjust the sound. Is that better? Yeah, that s a little bit better. Ok. No problem. OK. Cool, guys. I just want to make sure real quick with all the attendees that are jumping on the line right now that you guys can hear me okay. And you guys should see on the screen a webinar presentation that says iplan group, the iplan Group Warning Centre, self-directed I.R.A. basic, Retirement Driven by You. You guys can tell me real quick on the Go to Webinar program. Can you guys hear me okay? Can guys hear Jill okay? And can you see the screen okay? Just let me know real quickly so we know if the audio and the video is working well. (So Ben says yes. Say yes to all question. We can hear you. Mike, pretty good. Yes, yes, yes. Sounds great.) Okay. Fantastic. My guests for today s class are Jill and Mike from the iplan group. And just to give them a quick introduction. I have known Mike Gales since, I believe 2006, and Mike was one of my initial, very first, 2 P a g e

3 private lenders and partners. And I met Jill about a year ago. I actually met Jill through other investors, and my real estate attorney, different people that I knew in the real estate business and I found out about the iplan group and that they re a self-directed IRA administrator. What that means is that they help folks like me and you and your potential private lenders administer their retirement accounts. They help people roll over funds from IRAs, old 401K, Roth IRAs into self-directed IRA accounts, so that we can invest in things like real estate. Or we can invest in things like notes and mortgages. To lend for real estate. Or if you have a private lender like a friend or a family member, someone in your social network or someone that you meet in a club meeting. Or somebody where you harvest and grow information, you start speaking with them about becoming a private lender or partner for your real estate deals, you ll want to get in touch with the iplan Group. You ll want to create a relationship with Jill and Mike and their team. And you ll want to get your private lenders to roll over their retirement accounts to the iplan Group so that they can help you administer that account and help you get that money out of the retirement account to invest into your real estate deals. I shouldn t say out of the retirement account. I should say help these people make an investment in their retirement account into your real estate deals. And just to put this together real quick, to give you a background, I just funded a real estate deal with the iplan group. I had one of my investors, I ll just call him by his first name. His first name is Greg. Greg had about $90,000 or so with a traditional mortgage, with a traditional bank, one of the big financial institutions. He retired, not retired, left a former job. He rolled his money over to one of the big financial firms. And he was buying things like stocks and bonds and mutual funds, inside of that retirement account. I spoke with Greg at a golf outing about a year ago. Greg and I started talking and he said, Hey. You know, I heard what you re doing in real estate. Let s grab lunch sometime. So I gave him some of my one liners to get him interested in becoming an investor with me. And Greg said, Great! Let s get together for lunch. So we did. So I told Greg, Listen. I could use your IRA money and fund one of my real estate transactions. And what I do is I pay 12% interest of your money or 15% of my profit from my deal, whichever is greater. So he agreed to that. So we got the money rolled over. We got the deal funded and Greg put his money in play and he funded a property that I bought on Steve Drive. You guys have heard me talk about the case study, Steve Drive. And so, Greg funded that deal. We were able to buy the property. We re in the process of fixing it up. (Excuse me. Let me take a little drink here.) And when that property sells, which we are actually planning on launching that property and selling it at an open house in two weeks. Greg will get, when that property sells, he will get 12% interest or 15% of my profit, whichever is greater. And when we sell the property and the end buyer closes, Greg s note will be paid off. The money will go back into his IRA, the mortgage will be released from my property and the profit or the interest that Greg is earning will go back to his IRA. That s a deal that I have just funded. I have funded multiple other deals using the iplan Group and rolling money over to the iplan group of my own money, money from my investors, my friends, and my partners who were funding deals for me. And 3 P a g e

4 so, I am super excited to have Jill and Mike on the line because they re the group. They re the company that helping me personally administer and put this together for my own deals. And so, I am excited to have them on the line, because not only are they great to work with, I have a longstanding relationship with Mike, I have a great relationship with Jill for the past year. They re actually the company helping me fund my own transactions. So it s doesn t get any more real than these guys. It doesn t get any more real. Some thing I want to share real quick before Mike and Jill jump into their presentation is Mike and Jill have offered to give you guys a free copy of their TAX FREE RETIREMENT BLUE PRINT. And that s a $30 value. It s a report, a special report that they created on how raise money, get money as well as use your own money to fund your real estate deals. And how to have a very Tax Free Retirement using Roth IRA s and self-directed IRA s. What I want you guys to do today is go to the website that you see on the screen there in red. It s signup.iplangroup.com/second. Okay. I m going to pull this on the screen real quick and you ll see the website on your screen. You re seeing it populate there right now. So this is the website and you see the URL signup.iplangroup.com/srecnow.com and Jill and Mike are going to give you, just fill out the form, to get a copy of their TAX FREE RETIREMENT BLUEPRINT and they re also going to give you a 30-minute strategy session, with either Jill or Mike or any of their self-directed IRA administrators. One of the girls that I use is a girl named Kala. You may also try to directly speak with Kala, one of the persons I speak with when I m putting my money in play and when I m rolling over money from my investors. It s super generous for Jill and Mike to put this together for you guys, and to make this available. So you get a free 30-minute strategy session and a free TAX FREE RETIREMENT BLUEPRINT. You just have to fill in your first name, and phone and they will set that up. Otherwise, guys, there s nothing to buy, there s no books, no tapes or courses for you guys to invest in. They re just here to support you guys. They re here to take care of you. And of course, they want your business. They want, if you have your own self-directed IRA, or your private lenders, we re going to help you fund your real estate deals. IPlan. This is what they do. They help people administer their IRAs, and get their money in play, and of course, I am using them and I am getting my full 110% endorsement. So again, it s signup.iplangroup.com/srecnow. So, Jill, Mike. That s my introduction of the iplan Group and my introduction of you guys. I know I just barely scratched the surface, so why don t you guys tell our group a little bit about yourselves, a little bit about the iplan group, and we ll jump into it from there. Great. Thanks, Josh. Let s start with who we are. I am an investor just like you folks. Like Jill, I ve been investing one way, shape or another, in properties or notes, for the last 10 years. Jill, I think, is doing it for 14 years. And how Jill and I got connected was through a third party. I did a hard money loan to Jill to back my real estate. And I was using another administrator to administrate my IRA, self-directed IRA. And of course, I transferred it over to the iplan. From there, I did such a good job of talking to friends and family, the people down the street, that I decided I m going to join the company and be a part of this, because I like doing this better than my regular day job. That s how Jill and I got connected. 4 P a g e

5 (laughs) I m sorry. Go ahead. I was just laughing. Because when somebody gets a taste of real estate, it always turns out better than the day job. I m just laughing at the comment, I d rather do this than my day job. Fantastic. Well, you know why? Because I just like this. From the moment I get up to the moment I go to bed, it doesn t feel like a job. This is fun and I m actually making money doing it for a bonus. But anyway, my point in all this is, Jill and I are investors, and you re going to see in the next slide or two, that iplan was invented by investors for investors. And that is actually a true statement. Jill actually has her quick little story, about how she was with another administrator, she ll give that few second overview. Thanks, Mike. I have been investing my self-directed IRAs through another administrator in the year 2000, when I first bought tax liens, then tax deeds. Now I m doing notes, I have a couple of mobile home parks, single family homes. I ve done wholesaling, and my latest is oil and gas inside of my Roth. So I m trying to practice what I preach, grow a lot of deals so I can grow my IRAs so I can share them with our clients. Because I truly believe in them, I m passionate about it. And this is a great way to take control of your retirement, in investing in what you know, where you can get your predictable returns. So that being said, seeing today s agenda, you know who the iplan group. Josh has given a great job of giving us an introduction. You know what self-directed IRAs are, how they work. We re going to talk a little bit about the benefits, how it works, tactically. I think in the first webinar that was done by another gentlemen from the iplan group he talked mainly about real estate. What we want to talk about today is kind of what I did, and that was, I don t know about you folks but when I started investing in real estate, the first thing that I ran out of was money. So what I said, How do I get more money to fund more deals, or notes or whatever it is I am doing? I m going to flip the slide, Josh. Sure. About that... Keep going... Before we get into the more money, just a little bit remedial information on retirement accounts, there s the traditional, the Roth, the rollover. There s also tax advantage savings account such as Coverdell. Your healthcare savings account can also be home property or do deals. In 5 P a g e

6 addition to retirement accounts for small business, individual for one case, self IRAs, simple IRAs, good flip Josh. Let me hold on to this, Mike. Just let me sit down for a bit because we may have some people without an IRA, or those who aren t familiar with the different versions. So let me just cover this real quick. What happens with me guys, if we want to talk about the real world, what happens for me most often, is I find somebody who is between the ages of 35 and 55, who has just either left a job, or quit a job, or is just being relocated. And you find the average person loses their job or quits their job or transfers to a different job at least 5 times to 7 times during their working career, and typically changes careers entirely. At least twice. I mean they might be on the medical field, and then go into real estate. They might be in the financial services field, and go into education. They re not only changing jobs, but changing careers. What we are finding is people who are saving a lot of money in their 401Ks that are sponsored by their employer. And then they lose that job or quit that job, and you have this 401k sitting at their old employer. A perfect example is my sister-in-law, Gina. My sister-in-law, Gina, my wife s older sister, had worked for the same job for about 18 years. And recently quit that job and took another job. So she had a substantial 401K balance plus they did not match, because she has a pension. But all of those can be rolled over into an IRA. When she leaves that job, she take a very proactive approach with that money. A lot of people leave the money in the old 401K. So my buddy Shawn, who has just rolled over his money to the iplan group. We funded a deal last week. He left money with his old employer for over a year after he left that job. Gina still has the money from the old employer from that job. One of my other investors, a guy named Pete, he has money left from his old job he left 3 years ago. I had money in my old 401K when I was still in the financial business for over 5 years, sitting in this old 401K, not even barely paying attention to it. For me guys, we need to talk about the real world where we can find money, where I am encouraging my friends, to roll over their money to the iplan group, is I am finding this little niche between 35 and 55 years old who have money stilling in old 401K. They re not really paying attention to it. It doesn t matter is they work in McDonald s or if they work in a blue collar job or a white collar job, those employers today have some sort of employer sponsored retirement plan. And you find people jumping from job to job to job, and these money is stilling in these old 401Ks. That is the sweet-spot I want you to pay attention to. So, when Mike, talks about the retirement accounts for individuals that s on the upper left part of your screen, which you are find is to roll over IRA. It s going to be the big dollars, in my opinion. That s where you re going to find people with fifty grand. A hundred grand. A half a million dollars. A million dollars or more is in the old 401K plan, and the old pensions that become the rollover IRAs. A tradition IRA and a Roth IRA are great. Mike, Jill, why don t you cover real quickly, for the people who don t know the difference between the traditional IRA and the Roth IRA and how they are being taxed. As far tax being deductible upfront, versus tax coming out the other end. 6 P a g e

7 Sure. Actually you re stealing my thunder a few slides a head but that s okay. We ll do it right here. Sure Actually, to dovetail on what you re talking about. That s where I started. I changed jobs a few times. Every time I left an employer, I rolled my 401K that I had into a self-directed IRA. And kept accumulating and promptly ran out of money, when I did the next few deals. So, good point with that. The difference between the traditional and the Roth. The traditional IRA is funded with pre-taxed dollars going into the account, going into the account. While the money is in the account, and earning the investment income, all of those are subject to taxation, when they re withdrawn at age 59 ½, and then they re taxed for whatever your ordinary income tax rate at that point in time. Contrasting that with the Roth, they are after taxed dollars, going into the vehicle, as long as the account is open, 5 years until you reach 59 ½, obviously what you contribute after tax dollars and the investment gain are withdrawn tax free. Huge. Tax free. That s fantastic. That s fantastic. We going to get into that in a moment. The big thing right, if you re funding money into the 401K, or pre-taxed dollars, the accumulating tax deferred and they are taxable on the way out. That is the 401K or a pension plan or a traditional IRA. And all of those, can then, if you have pension, old 401K that can all be accumulated and rolled over into one rollover IRA. That s what I have, an old SEP - IRA that I started when I was self-employed years and years ago, that are funded and funded and funded. And I rolled that into an IRA now. So it s all in one place. I can buy real estate deals out of that. I can buy real estate out of it, loan out of it, etc. I also have a Roth IRA. Roth IRA are funded with after taxed dollars, okay, and also I funded. Now there s also an income limit with the Roth IRA. I don t remember the income limit this year. Mike, Jill, do you know what that number is? We ll get in to that with each individual in their strategy session. I know, per employee, it depends on the magnetism, when you put 5500 or 6500 in per year max and what s in the 401K, it can go more. What about an income requirement? I know it should be over 175 or more, then they re disqualified from contributing to a Roth. That s correct. It s right around that number. 7 P a g e

8 Okay. So that s the other thing guys. Roth IRA is great and especially you know if you make a fairly substantial income. I believe it s 175 around there or more, you cannot contribute to your Roth anymore. You cannot put money in. You can continue to grow it with the principle balance that you have. But you can t put anymore in. And so, that s important to know as well. So that guys is really to top cap part of the conversation. Really, what we re going to cover today. Coverdell accounts are for your kids, and potentially your grandkids, to put money in those what you call SEESA accounts, Coverdell education savings account. And I also have a health saving account. So we have a highly deductible health insurance plan, with all my employees. I am one of my own employees with a high deductible health insurance plan with a health saving account. So an HSA can also be invested to real estate as well. But remember the sweet spot are those people who has saved money in their 401K and leave that 401K. A lot of people don t pay attention to that money. So when you talk about real estate, and you talking to them to fund your real estate deals, that s the sweet spot that I ve found. We move forward to the next slide here. So, Mike, Jill, can you talk about the concept of self-directing IRA versus putting the money in a big brokerage house like a Merrill Lynch or Fidelity. What a lot of people do is put a lot of money into a big securities firm and just let it go, and they pay a financial adviser a big commission for selling them a mutual fund and selling them an annuity. And the difference between that and self-direction. Josh. That s absolutely correct. In a lot of times, they re having those fees, they having that broker that s advising them, they kind of have the impression that they are self-directed because they can pick those stocks, they pick the annuity. About that self-directive, self-directed, that s where you re finding your investment, investing in alternative assets, with options on private mortgages, precious metals, things like that. So, when you re using a broker and you re paying those kind of fees, and you think you can pay your own stocks, really, you can pick from any stock or any mutual fund. So it s truly not a self-directed IRA. Josh, here s another reason why I put this slide in here. I looked into the fact that I ran out of money quickly and began investing in real estate. So when I started talking to friends, family, the guy across the street, and explaining to them what I was doing and how they could invest their qualified funds. And what they would say to me is, Mike, I already have a self-directed IRA. I can pick stocks, I can pick bonds. But this says, Wait a minute. If you re with a high financial institution, if you can use your self-directed IRA to purchase a property. And they come back and say, Oh no. It s illegal. Which is totally wrong, because most banks and companies and security firms, it s their rule that they can t sell anything that belongs to them, the ability to offer that. If they don t know why, they only say, Oh, you can t do that. The consumer thinks it s by law that it is prohibited. Which is totally not true. So I was trying to distinguish between people that they think that on self-directed IRAs and actually a true self-directed IRA 8 P a g e

9 within the iplan group. When I came to real estate, performing, non-performing notes, taxing options, hard money loans, promissory notes, there s a big distinction. Absolutely. One of my very good friends is a successful financial planner, stock broker, with Wells Fargo. He was with Dean Witter back in the day. He s about 42 years old. Since he was 22, he did nothing but sell stocks and do financial planning. So he worked for Wachovia. Wachovia was bought up by Well Fargo. He s currently with Wells Fargo. He was assigned 22 page affidavit every year, that he s not going to quote, selling away. So you guys need to understand this concept. The concept of selling away mean you re not selling securities, or notes or mortgages or really not selling anything that your broker dealer has not approved of. Or what your broker dealer has not registered. So every security that his name, Bart Bucky, anything that Bart Bucky sells has to be registered and approved by his broker dealer, which is Wells Fargo advisers. So if in talking with Bart, you want, say you have half a million IRA with Bart, hey, I want to invest in a piece of real estate. Bart might mistake by saying, You can t do that. That s illegal. The truth is, it s not yet approved by his broker dealer. And if he sold that or approved or recommended a piece of real estate or that note or that mortgage, Bart would get fired. He would, have to sign that affidavit that he has only recommended securities approved by Wells Fargo. If he recommended what I was doing to his clients, Bart would immediately be terminated. It s not because it is illegal. It s simply because Bart s broker dealer, Wells Fargo, has not yet reviewed, approved any of my real estate offerings. Keep in mind, guys, that Mike is making a very good point here. When you approach somebody and talk to them about them investing or rolling their money over a self-directed IRA, and then lending to you, you will hear some people say it s illegal. It s not illegal. It s simply they are misinformed or educated. So be prepared for that upfront. What I find is that when people know the truth about investing in real estate, on performing or not performing notes, or promissory notes, they technically say, God! I wish I would have met you years ago. Another example. My friends, Mike and Mary, have given my brother and I funds to cover our real estate deals and they were working with a more than 6-figure 401K. And they said, We rolled in over to some financial adviser. And the guy, once it was rolled over, the guy never called them back. Never talked to them again. Now you guys have to understand why. Why does that happen? Because most financial advisers are paid a commission upfront. When that money is rolled over, and the money inside the IRA, buy mutual fund, buy stock, by annuity, the financial adviser has just gotten a big commission check. And now, their incentive to continue communicating with that customer has now drastically dropped off a cliff, because they re not going to make a lot more money. So I m surprised when I meet with a potential lender, and say, Look, you have your money with Wells Fargo. You have your money with Merrill Lynch. If you roll your money to the iplan group, and you need the money for a real estate deal, I bet you re blown away by how easy it is to move that money from your existing broker, over to the iplan group. Because your existing broker won t probably put up a fight that you re moving the money away from them. Why? Because they already made their money. The broker already made their money. So I tell people, Look. Call your broker and tell them what you re doing, but I bet you, he s not even going to put up a fight. He has very little money moving it moving forward. 9 P a g e

10 Be prepared for those couple of things: 1) For people who say it s illegal. It s not illegal. We ve covered that. It s not illegal. It s a selfdirected IRA versus directing and hiring a financial planner. 2) Be prepared that your best place to get money is the old 401Ks. 3) Be prepared. You have to prepare you potential private lenders that you may have to position them that they re going to have that kind of conversation with their current adviser. And the current adviser may try to convince them to stay with the current broker dealer they ve been using. But often times, they don t. Oftentimes, they ve made their money. They re moving on. They couldn t care less. That s the true difference. Very important that you understand what the sweet spot is and some of these real world scenarios. Let s move on to prohibited assets. Mike, I m sorry. Am I moving too fast or is there something else you want to add there? No. Actually, I was going to move right in to this quick. What I wanted to say is, part of what I wanted to communicate to you folks today was, what I did and what Jill has done and again, it s trying to position your friends and family to take advantage of the deal that you do, and reward them with 12% or 15% profit. What I learned, is you kind of have to educate yourself a little bit because you re going to get those questions that Josh talked about. If you can just educate yourself through three things: assets. On the next slide, transactions. And the next one is persons. And we ll talk about it. There are prohibited assets. And actually the government doesn t tell you what you can own through selfdirected IRA. It only tells you what you cannot or what it cannot own. Life insurances, collectibles, and stock and escort operation. If you only know that, you can come across as an expert on how to use the self-directed IRA, how it works. Josh can you flip to the next page. Mike, there are a lot of alcohol beverages in your IRA. (*laughs*) And then, there s prohibited transactions. Basically says that you can t personally benefit from a transaction within your IRA. Borrowing money personally from it. Selling property to it. Receiving compensation for managing it. Become familiar with these things, you ll be able to talk intelligently. And lastly, there are prohibited persons. If we flip the page one more time, you have to be keenly aware of what are disqualified persons. So my IRA can t do a deal with my spouse, or on the next line, anything that is known as a lineal descendant or ascendants: Grandparents, Grandchildren, Spouse, Investment advisers/ managers, anybody that serves as a custodian. However, if you go lateral: brothers, sisters, aunt, 10 P a g e

11 uncles, they are not prohibited parties. However, I will let Jill speak on this, you can partner yourself with your IRA and I think Jill has done this on a number of occasions. That s correct. We have property right here that s under (name?) The builder owned the lot. He didn t clear the money to build the property. So we gave him a $140,000 loan to build the property. Charged him 15% on the back end. What we did is we partnered with cash, we partnered with one of my clients, one of my friends IRA, his wife s Roth IRA and his son s educational account. So we have 4 parties in that deal making up $140,000 to have him build that home. The good thing about this property was, 15% but at the end of the day decided to build higher end. We did the deal October 1 of last year. The property is for sale now. In his research, he decided he wanted granny counter tops, better cabinets things like that, so he needed and additional 40 grand. He went back to us asking for 40 grand, we said yes, we will absolutely do it. He said, You can get the 15% as if you gave it to me October last year. SO, that was a pretty nice deal. I m sharing that one with you because we put 4 parties together, cash, traditional IRA, a Roth IRA and a Coverdell education account. One account may not be enough, you can partner with other accounts just like you would partner with other people. Josh and I might do it together, or I might be able to do a deal with Josh, with Mike, with Coverdell education account, with Conrad s HSA, we can put a lot of accounts together, to gather enough money to do the deals. Yeah. Absolutely. I wanted to make that clear distinction that I can t borrow my own IRA money to do a deal. But my personal money, joined in my IRA, and pull off a deal. That s correct. If you went to people, also, we re targeting the 35 to 55 year olds with 6 digits in their IRAs. Don t discount the guy with 20 grand, you find 3 guys with 20 grand to put down a deal, just let them partner together. All three of them will share the first lean or whatever collateral the buyer is going to give them on the property. Yeah. Absolutely. Yes. The point that I m trying to communicate is, with a little bit of education, and rudimentary knowledge of self-directed IRAs, how self-directed qualified plans work, what are the prohibited item, transaction or person, you can actually talk to your neighbour, your family and friends, and say, Here s how it works. How what we can. Here s we can t do. And here s how we structure deals with higher rates of return. And you can benefit by deploying their money to help you fund your deals. 11 P a g e

12 Everybody wins in these scenarios, guys. Everybody wins. That works for me. I never really felt that I can quote and quote and sell them into doing a real estate deal with me. Once they kind of realize that this was an option that they just never knew about and they say, How come, nobody else is doing this? Or How come I ve never learned about this before? The reason why guys, is this, I use this in my presentation that you guys are going to learn in our next coaching call. I m going to give you guys my PowerPoint presentation. All of the iplan documents that I use are already in membership site. And of course, you can communicate directly with Jill and Mike and their team to get all the documents you might need. Here again is the real world scenario. When I talk to somebody about real estate, they almost always say, Yeah, I ve always wanted to buy a rental. Or I ve always wanted to buy a fix and flip, and make a little bit of extra money. Or I ve always wanted to rehab a house. Or I d love to show off this house or property ladder. Flipping Las Vegas. Flipping, Boston. I love those kind of show. What I say is Great! Fantastic! How come you didn t do it? And they say, Well, I never really had extra money. Or I never really had extra time. That s what they almost always say. And I say, Great! What are you doing with your retirement funds? And they said, I have this old 401K and this old IRA. I never really took time for it. I talked to one of these advisers I met from a friend of a friend and he s from Merrill Lynch. I really want to roll the money over a couple of years ago, and bought some mutual funds, but I never really look at it. I kind of goes up. It kind of goes down. Every time I open my statement, I can t really tell if I m making money or losing money. I don t really know how it works. If I make money, I really don t know why. If I m losing money, I really don t know why. When you put together the fact that a vast majority of people that you will meet, has always wanted to flip a house, doing a real estate deal. And now you take the fact that these people are switching jobs, and are leaving behind all these old 401Ks. And then you take the fact that you can combine accounts, not combine accounts but to do one deal, you use funds from a Coverdell account here, and a Roth IRA there and a traditional IRA here and cash over here, and you can use all that together. It s really the perfect storm. Guys, people have been killed years ago from the stock market crash in 2008, the financial crisis in September And the market going down from 13,000 points down to 6500 points. And now the market coming back, people still don t even know why there s money making money. What I tell people is, Wouldn t you rather have much more control. Or you re going to know in a fixed financial instrument, you get 15% fixed. Or you re going to get 12% fixed. Or 15% of the profit, whichever is greater. Or 10% fixed or 20% of the profit when I sell the profit in the lease option. Or, we can go in and your IRA can actually own 50% of the deal. You have so much more control over the assets that you re buying, instead of just buying a mutual fund some financial adviser in Wall Street is managing, who you re never going to meet. And your money is just combined together. If you really understand what people are looking for, going into real estate deals, but they don t know how. Want to go into real estate deals but they don t know that they can use their old retirement money. People want to control their own investments, but don t know how, since most people invest in stock market. You simply open up your mouth a little bit and talk to your friends, family, your neighbours, and other people that you know. You groom them and talk to them about the options you have. This is not selling. This is about just educating, if people you know want to do this. 12 P a g e

13 I had my aunt call me. I had no idea she had money in the real estate. No idea that she had any money at all, and sending her my newsletter for about 8 months. She called me about three or four weeks ago and said, Josh, I ve been getting your newsletter. It just looks so interesting. Tell me more about what you do. I ve never really understood what you do. So I said, Aunt Karen, this is what I do. I step onto real estate and use money from people over terms and accounts and they fund my real estate deal with their self-directed IRA. She says, Yay! Fantastic! You know I have my old 401K from when I was a nurse and your Uncle Ben has an old 401K. You re telling me, we could use that money? And I say, Yeah. And also, my cousins, Benny and Sarah, I don t know if you re putting away money for their college, we can use their college money. She says, Yeah. It s just sitting in a CD, earning one half of 1%. We are too afraid to put it in the market because we are too afraid to lose it. But if you re telling me that we can use the old 401Ks, plus the college money, for the kids, we have about 120 to 125 thousand dollars we could use. And all of a sudden, people who think they don t have enough money, when this money is intended for college and retirement, all of a sudden, they re coming out of the woodwork to fund your real estate deals. Guys, remember what I said before. People tend to be cash poor, but house rich. There s an equity on the house, and retirement rich and college rich. A lot of friends would say I m cash poor. I don t have a lot of money in cash, but I have 50,000, 100,000 saved for Sally Sue s college and I have 400,000 saved for my own retirement. But I am cash poor. Those are the perfect potential private lenders to work with and that s the perfect client for the iplan group. I want to stop these for a second just to make sure that everybody understands what I m saying. Guys, just give me some feedback. Go to the webinar questions pane, time to kind of stop and take everybody s temperature to ask questions. Tell me, are you guys understanding what Jill, Mike and I are talking about so far? Do you guys have any questions? Is there anything you want to review before we go on? Sasha, one of students, say, Yap. Sound good. I get it. James says, Yes, but I have some other questions, see above. Here is a question from James. Can we get into trouble if I own the IRA funds used to rehab a house if we supervise the contractors ourselves? Or must we hire a general contractor? Jill or Mike, you want to take that one? It s all about being reasonable. And if you re not being compensated, something we want to discuss with you one-on-one offline, like are you there every day, are you hiring, are you compensated? You can get into trouble if you are putting sweat equity or if you are being compensated to manage it. But that is a good question and we want to dig deeper one-on-one, how much time it means to you, do you have another job, or how are you getting compensated. That s a great question. 13 P a g e

14 Jill, let s just say for example, I buy a house with my own IRA, and I am managing the contractors, getting all the work done, but I am not paying myself a nickel. I m just hiring contractors, they re showing up, they re putting on a new roof, kitchen cabinets and countertops and I m not paying myself a nickel. That should be okay. Unless you re there 60 hours a week, supervising, that should be fine. Guys, somebody has to hire the contractor and be there, make sure the project is finished. Somebody has to sign the real estate agent to sell the property. Guys, you want to do you one-on-ones with Mike and Jill and their team, and ask them your specific questions. Because they can give you very specific answers to a very specific scenario. They re your IRA administrator, guys, and they re there to make sure you re compliant. They re not into business of putting you in situations where your IRA would be compromised. Make sure you sign-up for the one-on-one, talk to the iplan group, of course they want to give you guys their free advice, because they re hoping you ll roll over your accounts to them. They will work with you, which is what I want also. I work with the iplan personally, so I stand behind them, their customer service and their employees. James, the short answer is if you re not paying yourself anything, you re probably fine managing the contractors, and you don t need to necessarily hire a GC. But keep in mind that if your IRA buys the property, the rehab of the house, any contractors that are paid, should also come out of the IRA. Or you can mix in your IRA with cash, but the percentage of all the expenses must be equal if you buy the property half with cash and half with your IRA, and the other expenses that come in from the contractors, also must be split So keep that in mind. That s correct, Josh. I mean it doesn t necessarily mean that it needs to be You can go in 25-75, as long as the expenses are split exactly to that percentage. So, it could be 69% cash and 31% IRA. Say you get a $5,000 bill from a contractor, siding roofs and windows. Well, that bill needs to be paid 69% cash and 31% out of the IRA. If you go buy a bunch of stuff at Lowes or Home Depot, or whatever, same thing guys. Should be split in the same percentage. Peter here says, Guys, I need the iplan consultation yesterday. I will sign-up after the webinar. Great! So guys, I m going to give you the URL a couple more times, but keep in mind that you can go to the 40Flps membership site, and inside of the membership site, there is a banner, click over on the banner which will take you to the sign-up page. Fill in your first name and phone, and one of the iplan team members will call you up to set-up the one-on-one consultation. Again guys, there is nothing to buy, if you set-up your own IRA there. If you sign-up, I suggest that you get Coverdell for your kids, Roth IRA, your own savings account, you should do all of that with the iplan. And then of course, your investors, who are going to loan from you money, you want to have them roll over their money over to 14 P a g e

15 iplan group as well. The only fee that you pay is your annual account fee with the iplan group, which you re going to pay for any IRA you have, you re going to pay an annual fee. Let s talk about Peter for a second. Sure. Go ahead. I want to talk about Peter for a second. The thing that makes iplan different from other administrators, it takes weeks and weeks to get your account funded. That s one thing Mike and I are adamant about the company. By investors, for investors, is that you get funded fast. We can open your account and get your deal funded within a couple of days. So we are really able to respond quickly if you have a deal. The only thing that is kind of a little bit of a hang-up for us is the losing custodian, whoever you re rolling your money from, it may take them a while, but we will communicate with them and give them exactly what they need in a timely fashion so we get the funds quickly. So we will be able to execute funds very funds if you have deal by sometime next week. Yeah. Fantastic! Guys, I worked with another IRA administrator with one of my friend s accounts and it took three or four months and the money was still not moved. I re-engaged my buddy to move over to the iplan group and the money was moved and rolled over inside of three weeks. And that money has long been put in play and has funded one of my transactions since. I absolutely 110% percent endorse the iplan group, their customer service and also they don t give advice. They can t give advice. That s not what an IRA administrator or custodian does. However, what they can do with your one-on-one is they get a better understanding of what you are trying to accomplish. And they ll show you the paperwork that they need to make that happen. And I ve seen lots of different transactions go through where I wanted to buy property and somebody lends out of their IRA to me through a promissory note and a mortgage. I ve seen transactions where an IRA will buy 88% of a property and somebody s cash will buy the other 12% of the property. They ve seen commercial. They ve seen residential. They ve seen it all. They ve seen performing notes and non-performing notes, tax deeds, tax liens. All of that can be done in your IRA. Guys, the wealthy, wealthy people that I hang out with, none of them just puts their money in the stock market and let it rip. None of them do that. So if you want to have the same kind of habits, same types of investment strategies as the wealthy. You want to take control of your own retirement account and your own retirement assets. In addition, you want to talk to other folks about them taking control of their retirement account and their assets, because they want to have a higher and better return with less risk and more control other than picking their own investments, that you want them to bring the money to you. It s a win-win for everybody. If I m an investor and I close a deal in June, from the moment he gave me, buying, fixing, selling a house, he ended up with a net-net 27% annualized rate of return. It was a very controlled process. We bought a property. We fixed a property. Sold a property and he got 15% of my profit, which 15 P a g e

16 gave him an annualized 27% return. So not only did he feel that he was more in control, much more than control what he was doing, building the property that he could see, touch and feel, and he got a much higher return. His offer at a minimum was 12%. You guys also know the story, maybe you haven t heard it, we did a deal a year and a half ago, where we bought it, fixed it and sold it, where we had four different buyers that the first three all got declined because of financing. At the end, we sold the property and it took us 15 months. But at the end of the 15 months, we still made $49,000 profit. When it came up to the one year anniversary, we had a one year balloon their investment we went to them and said, Look. You know, it had not turned out as much as we had hoped, but at the end of the year here. We are still to give you back your principle, which is about $80,000 plus 12% interest. So Mr Investor, would you like us to pay your $80,000 plus the 12% interest or would you like us to modify your loan, and continue going forward. They said, Shit. If I m getting 12% interest, let s just keep going. We said, Fantastic! We modified his loan, we move forward. Three months went by, the deal was closed and they were paid $80,000 plus the 12% interest after those 15 months. He was extremely happy with the investment decision he made. He was extremely happy with me and went in another deal with us. And that was the worst case scenario. That s why the wealthy do this and the people you re going to talk with want to know these type of things. It s a matter of you having the confidence and the education and be confident in approaching them. The iplan group is going to give out free consultation. You still have coaching with me for another 4 weeks. That s going to give you the confidence, the coaching and the knowledge. By the Tim we re done, you re going to have my flyers to use, you want to start giving those out. But when people do say, Look. I have an old 401K with 150 grand in it. So you re telling me I can do a real estate deal with you? Yes. Let s sit down and talk about it. Let s go forward to tax deferred and tax fee profits. Mike would jump into this a little bit. Steal your thunder a little bit. But let s go to the talk of traditional and Roth. And let s make sure we are real clear on this subject. Back to the slide. Yeah. Okay. I mentioned in the beginning that a traditional IRA is pre-tax dollars going in to the vehicle. All of the contributions and earnings grow tax deferred until age 59 ½ went into distribution. You re taxed as ordinary income rate. Whatever those rates are for you at that particular point in time. Conversely, a Roth IRA, is a powerful wealth building tool. It is after tax dollars, going into the vehicle. Any gain from those dollars at age 59 ½ and the account being open and funded for 5 years, is tax free. So whether you can get a Roth established whether a traditional Roth, an individual 401K that has a Roth component, if you can do deals within your Roth, that s a huge wealth building tool that s incredible. That s fantastic! 16 P a g e

17 As a matter of fact, a real quick story. I had a high school friend. We got together for a 25 year reunion. He s a CPA, a CFP, and a 20-year investor. He kind of knew that IRAs could buy property but he thought, you know, it was illegal. I said, Gary, That s not the case. I gave him contacts who could cite IRS quotes verbatim. He called me back and said, Mike, holy crap. I wish I would have known this 10, 20 years ago. But now that I do know it, this is huge. Huge. That was the same thing, one of my investors, Pete said, because he worked for a big supplier company in Detroit, he s a chemical engineer. He worked for one of the big suppliers in Detroit, one of the big three auto and he saved up a very, very substantial 401K plan. He relocated back to Ohio where he was originally from. Pete and I started talking and he said, Wow! I could use all of that money to invest in real estate. And he became like, I don t really want to invest. I don t want to find my own property, Josh. I ll just move the money to you. Which was what I wanted to hear. So, yeah. It s really like that guys. There are a lot of financial planners, (You guys know that I was a financial planner) licence. Life and health licence. I was just about to sit for my CFP (Certified Financial Planner) right before I got into real estate. I took a one year and nine month class to prepare to sit for the CFP exam. And at the same time, I just started with real estate and decided to stay with real estate full time. But I am amazed how many CPAs, financial advisers, life insurance sales men, stock brokers, attorneys, don t know you can do this. We are talking a little bit because this is about my own experience. People rolling money over to something like iplan then loaning the money to me, or loaning the money to you guys to do real estate deals. Steven Shelton is one of our students and he says, So just I understand this. I can t use my old 401K to fund my own deals. Steven, that is actually not true. You can use your own, old 401K, to fund deals. You just cannot loan money to yourself. So the deal that has to be structured, your IRA should be the buyer of the real estate. The way I do it, (guys, this is very important. If I lose you here, please let me know, and ask a question inside of the Google group or ask the question in the Go To Webinar.) There are two ways to do these deals in real estate. What I do is I have one LLCs, the property renovation group is the buyer. Take my friend, Shawn. Shawn rolled his old 401K to the iplan group. The iplan group then helps Shawn administer a mortgage and he lends the IRA to the renovation group which is the liability company. So the company renovation group is the buyer, and the IRA is the lender. The IRA is the bank making the loan. That s one way to do it. The other way to do it, Shawn rolls over his money over to the iplan group and the Shawn could have gone on to buy a piece of property with his IRA. So, Jill, Mike. I don t do a lot of deals that way that I buy a real estate with my IRA. For most part, I lend out of my IRA. Do you guys want to give more examples/ case studies of buying a property within your IRA? 17 P a g e

18 Sure. I want to point out that the Coverdell accounts and the HSA might have a couple of thousand dollars in them. They might not be as big as some of your other accounts. One of the trailer parts that I own, I used 5% of each of my children s Coverdell accounts. 5% doesn t see, a lot but I cash flow a couple of thousand dollars a month so that s building their education account. I invested one time and now every month, they get a couple of hundred dollars, not coming out of my pocket. It s coming out of the trailer part directly to their account. Don t forget about the little ones too. Another thing I want to focus on. I do both traditional and Roth. Anything I do will give me a high rate of return and try to do that for my Roth because that is the one I want to triple charge and grow. Things that I get 10 to 12 % steady income a month, but the high rate return, I always want to do that with my Roth IRA. Great! Fantastic! Steven, just to answer your question. Yes, you actually buy a piece of real estate in your IRA. So when you go make the offer, on that piece of real estate, the buyer on the purchasing sales agreement, is your IRA. And when you guys, sign-up for your free strategy session with iplan, they will walk you through exactly how that purchasing sales agreement needs to be titled. But it s not unusual, and I ve seen it multiple times before, where an offer is made for a piece real estate using an IRA, a Roth IRA, a Coverdell, or traditional IRA, or an HSA is the actual buyer of the real estate. A bunch of friends of mine who live down in Kentucky, buy farms in their IRA and then they subdivide and split up the farms and sell off pieces of the farms, sell off the land and keep the farm houses in rental, in their IRAs. I have friends, like Judith said, buy trailer parks in their IRA and the entire trailer park is owned by the IRA. I have a friend of mine who bought an apple farm with a series of IRAs. The IRAs are the owners of these different things. The trailer park, the farm land, the apple farm. All bought with IRA. It s not a person that is on title to the real estate. It s not an LLC that in title to the real estate. It s actually the IRA is the owner of the real estate. And that real estate can be either flipped or fixed, be rented. It can be sold to rent to own. It can be owner financed. There s a lot of stuff that you can do and can t do. So again guys, make sure that you sign-up for the strategy session and if you have very specific questions, the iplan group will take care of that in your strategy session. So, Jill, what about these investment choices? There s a lot of stuff on the screen here. (Laughs) Josh, I put that matrix together just so it can give you an indication of just of the different things you can do. You are not limited to certain things. Again, we talked about in the beginning, the government tells you what you can t do, and that s life insurance collectibles, sea corporation shares, everything else is fair game, as long as you don t benefit from it. 18 P a g e