Empowering Your Investors to Retire Sooner

By Dan Kryzanowski

Tips on Sponsorship and Syndicates

My Journey to Financial Independence

Who do I (or you) have more in common with, Joe Biden or Mitt Romney? Putting politics way aside on my response, my answer is both. Speaking with my business hat on, I morphed from Joe to Mitt.

The Early Days

While like Joe, I did grow up on the “mean streets” of Scranton, Pennsylvania. Actually, the streets were not so mean and life was wonderful as a child in the 20th century. I was also very fortunate that my parents had secure jobs – high school principal and social worker – with pensions in perpetuity! scranton-364185_1280 Grit was (and is still) a valued trait in northeast Pennsylvania (aka NEPA), with NEPA known as coal mining community with strong cultural ties and traditions. There was a solid deference to top-down organizations and assumption of middle-class comfort. In terms of real estate and investments, the primary residence was the only “alternative” asset for the supermajority. This held true for the single-earner family or high-flying businessman that made six-figures in the early 80s. That said, the immigrant sense of adventure shined with the true immigrants (i.e. first-generation Americans) born in the early 1900s. My great aunts and uncles strongly valued family gatherings, so purchased land and built houses outside of town. My entrepreneurial spirit flickered early, though primarily in the “non-profit” sense, to provide opportunities for my peers. I co-founded and stood up programming for a youth leadership group under Hugh O’Brian Youth Leadership (HOBY), and served as matchmaker years before LinkedIn and Facebook. Overall, life was wonderful as a child and teenager in NEPA in the 20th century.

Early Career

Sometimes it pays to be lucky, being in the right place at the right time with the right people. I spent college and my twenties studying and living in three countries (traveling to another 20), ten US states, and locations such as Martha’s Vineyard in the summer of 1998 to Austin, TX prior to the current (infinite?) population boom. I also picked up degrees at Wharton and Thunderbird and benefited immensely from a decade at Merrill Lynch and GE Capital. financial-2860753_1280 Life was good and I quietly built up a sizable 401(k) and healthy Roth IRA. Stocks trended upward, public REITs paid double-digit dividends and I could receive a whopping 6% on a risk-free Certificate of Deposit (CD)! I felt very “diversified” and sophisticated within the comforts on the Fidelity online portal.

Turning Point

While 9/11 was an obvious shock (I worked at 4 World Financial Center) and wake up call to potential horrors, day-to-day living (and investing) in the mid-2000s was quite comfortable. That, of course, all changed in September 2008. The curtain fell on the Wizard of Oz, and what was behind the curtain was not pretty (i.e. “trusted” institutions). Backing up a little bit, it should be noted that I rarely go against my gut feeling, and when I do it tends to put my entrepreneurial and investing endeavors on hold. Instead of remaining in Austin in mid-2008 to be at the forefront of the first true “organic” tequila, we ended up back in the northeast, paying $2,000 monthly for a condo with a view of a wall in Stamford, CT (when I literally could have bought a house in east Austin for $40K). Fast forward three winters, the reintroduction of state income tax, and dozens of pints for friends laid offer during the financial crisis – it was time to return “home” to Texas.

Keeping It Weird

austin-247_1280 Austin, and Texas in general, has a very educated investor base, with folks forming all types of syndicates to invest in everything from conservative multifamily preferred loans to restaurants that cater to dogs and comedy tours (“Ha”, said my CPA, when we wrote off this investment). I immediately cannonballed into both ends of the pool, opening a Self-Directed IRA (SDIRA) to invest in high-yield/low-risk real estate and effectively crowdfund some of my dividends and piggybank savings accounts into hotel/bar/restaurants across Austin, some of which we also own the dirt. Overnight, I morphed from Joe to Mitt. Regardless of deal type, what struck me most was the commonality and comfort of each deal lead to sponsor a syndicate. In the early 2010s this was still a grassroots effort, now aided by various Meetups and crowdfunding platforms. The wild card, though, which has yet to scratch the surface is the “green tsunami” of $10T (yes, trillion) that individuals will shift from stagnant, nameless mutual funds to sponsors/syndicates, with a strong percentage of these funds going towards real estate.

Storage, Baby!

storage-warehouse-1553550_1280 Raise your hand if you or somebody you know rents a storage unit. Raise your other hand if you would rather spend Memorial Day Weekend on your boat vs. changing storage providers if you monthly rate went up by a whopping $7. Now with both hands in the air (i.e. the universal “it’s good” on a PAT), you have a taste into the beauty of self-storage and natural attraction to invest in a storage facility with your friends and family. Pinnacle Storage Properties, founded by Uncle Bob’s veteran, John Manes, offers the simple blueprint on how to sponsor a deal. First, assuming you are liked – or of greater importance, respected – then you should have a natural following of 100+ interested individuals who will engage based on the high level of competency and character you exhibited throughout the years. Second, keep it simple. Unless a single person is willing to take all the equity off the table, then there should not be multiple share classes on your initial deals (or even on future deals or initial fund). Likewise, this eliminates the perception (and possible reality) of preferential treatment of your Grandma’s $50k on Day 1 vs. an ex co-worker funding the final $250k from her SDIRA. Finally, set parameters on commitments. Make it crystal clear that you need $X by Y date. That said, it is always best practice to communicate a “funds due date” a good 14-30 days before your true ‘D Day’, as is is very common for your next door neighbor’s check to get lost in the mail. Assume also that 10% of commitments will fall through, so either be oversubscribed or be prepared to front or possibly invest that final 10% of equity out of your own pocket.

Six Figures in Six Minutes

businessman-4279253_1280 Did you know you can get 6 figures in 6 minutes? Yes, it’s true! As referenced above, assuming you have a reasonable number of potential investors (e.g. 100 or more), then a simple email or mention in your deal packet should bring you a few checks from your investors’ “forgotten trillions”. In every deal I sponsor, and even when I do not have a live deal, I always educate any potential investor that s/he may use their retirement dollars to invest in my upcoming deal. Tommy Prate of Magnify Capital is a longtime evangelist of enhanced retirement accounts (Solo 401(k), SDIRA), empowering both his investors and ‘Magnifiers’ (those sourcing deals with boots on the ground diligence) with the knowledge that they may invest in his current/next deal with their retirement accounts. Manes/Pinnacle also regularly receives 15%-25% of equity raise from Self-Directed accounts. The added bonus, and ease, of “selling” the concept of retirement accounts is that these dollars are likely locked up (i.e. cannot withdraw without early distribution penalty) for the next 5-25 years, so the investor has no urgency of receiving (~demanding) his principal back. Secondly, with a checkbook controlled SDIRA, the investor can easily reinvest dividends or have a bit of fun investing smaller checks in other real estate and private deals, while maintaining all the benefits of a traditional retirement account. Play this to your advantage, and you will literally get 6 figures for 6 minutes of your time.

Playing the Mitt card to Financial Independence

When on the campaign trail in 2012, Mitt Romney was asked how his ROTH account could be in the Millions (actually $102,000,000!) when the maximum ROTH contribution was only $5,000? While Mitt took advantage of other types of enhanced retirement accounts (with 10x contribution limits), the takeaway here is that he invested via a post-tax account and will not have to pay taxes on this balance during his golden years. Stated differently, would you rather pay taxes today on a small seed or the full evergreen tree in the future? I opted for the former, now very confident that my seed will replicate many times over until I elect to take my first distributions in my 60s.

Dan Kryzanowski

Dan Kryzanowski

Executive Vice President

Rocket Dollar


Dan serves as EVP at Rocket Dollar and Capital Partner for Pinnacle Storage Properties. Dan has raised “six figures in six minutes” numerous times across the self-storage, multi-family, and residential worlds. His profession mission is to guide individuals to take back control of their retirement dollars and empower sponsors raise more money faster. Visit with Dan at Family Office Connect on May 21st in New York City.


Texas Cash Cow Arrest — Beware of Real Estate Fraud

By Kathy Fettke
The arrest of a Texas developer, who’s well-known in the real estate industry, is a big reminder to thoroughly vet the people and deals you are working with. Phillip Carter of Frisco is accused of taking $17.5 million dollars from investors for development projects in North Texas but authorities say he used much of that money for his own personal needs. His wife, Shelley, and alleged accomplice, Richard Tilford, also face charges.The Texas State Securities Board lists almost a hundred victims, many of whom are reportedly elderly and probably trying to boost their retirement portfolio. Now they face financial loss, and are likely wondering where they went wrong.

Who is Phillip Carter?

Carter is the owner of Texas Cash Cow Investments, Inc., although the website for that company no longer exists. He’s also the owner of North 40 Developments, LLC, which does have a website. It doesn’t mention Carter’s name anywhere, however, but it is located in Frisco.

According to Texas authorities, Carter and Tilford told investors their money would be used for the development of commercial and residential properties. The indictment says Carter used at least some of those funds for unrelated purposes, including personal expenses and the payment of an IRS tax lien.

It also says that Carter lied about his personal background — that he falsely claimed to have a chemical engineering degree from the University of Virginia and had worked as a project manager for Texas Instruments. It also says he made up the story about working and traveling with “Rich Dad, Poor Dad” author Robert Kiyosaki.

Trouble Begin in Early 2016

The indictment lists the names of all the people who invested with Carter in early 2016. Some contributed as little as $12,000 while others gave Carter as much as $700,000. It says that Carter held the money as a fiduciary for the purpose of funding investment opportunities that would result in a profit for investors. Instead, Carter is accused of using the money for personal reasons that have now put those funds at “substantial risk.”

Carter was apparently attempting to move forward with the projects but came up short on funds. Authorities say a $6 million check for labor and materials bounced in December of 2016. He reportedly borrowed $32 million from a Seattle-based private equity firm more recently to pay for construction costs on two properties. But, as one news story points out, the lender holds the first lien, which means that investors will only get paid if there’s any money left over.

His wife is accused of money laundering and the misuse of investor funds. Investigators say his alleged accomplice, Tilford, raised $6 million from investors, who are listed in his indictment. They say the funds raised by Carter and Tillman were mostly in the form of promissory notes.

Red Flags for Real Wealth Network

Investing in real estate is one of the most stable ways to build wealth, but it can also be one of the fastest ways to lose money if you have the wrong property, and worse, the wrong team. Unfortunately, these Texas investors are finding out the hard way, what they should have done differently.

If you were a Real Wealth Network member during the Great Recession, then you probably heard of Texas Cash Cow and Phil Carter. Back then, he was one of the largest turnkey operators in the country. He would buy large tapes of REO property from banks at highly discounted prices, renovate to like new condition, and offer on-going property management.

Many of Real Wealth Network members purchased property from Texas Cash Cow, and initially, we received rave reviews. But then something changed and we started to get complaints about property management. At that time Phil came to us and said he was no longer focusing on single family rentals but instead was creating a new model. I don’t remember the details but it had something to do with buying or building apartments or condos and selling the individual units to investors. I told him that was something we would not endorse, and that was the last I heard from him.

It just didn’t make sense that a bunch of investors who don’t know each other could successfully own their own units in an apartment or condo complex — plus, I didn’t think any legitimate bank would finance it.

There are many lessons here that I would like to share to make sure investors don’t make similar mistakes.

  1. If something doesn’t make sense, don’t do it. Just because you don’t understand it doesn’t mean you’re dumb. It might mean the deal just doesn’t make sense!
  2. If someone is trying to do something new, something they’ve never done before — don’t let them use your money to figure it out. 
  3. When you lend money to a developer, make sure your funds are recorded in first lien position. Do not sign a promissory note that is not tied to property.
  4. When someone is raising money from investors, they must file with the S.E.C. even if it’s for a promissory note. I recently saw an email go out from another turnkey company in Texas saying that they were now doing syndications. I called them to find out more, and they told me they had a new opportunity, where investors could earn a flat return by investing as a private lender on their commercial property in Houston. I asked if they had filed with the S.E.C. They said they had not because it was a note and therefore they didn’t have to. I told them that was illegal. Apparently they didn’t trust my opinion as I saw another email go out with the same message.
  5. When you buy rental property, you can get inspections and appraisals to verify that what you are buying is indeed what you thought you were getting. It’s pretty straight forward. When a turnkey company starts doing something different than normal real estate, question it. Just because someone is an expert at one thing does not make them an expert at another. I heard that some investors bought property from a turnkey company in Chicago and closed on the property before the repairs were done, and the seller gave them a promissory note. That note was never paid when the company folded. Now why would anyone do that? Why would you close on a property before the work is done? Never pay any contractor before the work is done!
  6. Finally, if you do invest in a syndication, make sure the Use of Funds section is spelled out clearly. 



Kathy Fettke

Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life.

With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row.

Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.




Kathy’s 2019 Housing Forecast

By Kathy Fettke, Co-CEO of the Real Wealth Network

Welcome to my 2019 Housing Forecast! I’ve been doing these predictions for many years starting well before the housing crisis, when loans were easy and home prices only went “up.”

I was a mortgage broker back then, and knew something was very wrong in the lending world. I couldn’t understand how it made sense that I was able to give a loan to just about anyone… and I got my answer in2008 when the housing market crashed.

Since then, it’s become my passion to understand the politics behind economics, so that I’m never caught off guard again. Please note:these thoughts are my opinions only. and not to be construed as financial advice.

My theory on the housing market boils down to these three factors:

Real estate values are tied to jobs.

Jobs are tied to the economy.

The economy is tied to Federal Reserve policy and government regulations.

That’s a very simplified version of the housing market machine, but decisions by the Federal Reserve and the government can have a torpedo-like impact on real estate. So if you take a  close look at what’s happening with the central bank and government policy, you might get a clue as to what is coming.

The Federal Reserve

The Federal Reserve attempts to regulate the economy by controlling the money supply. When there’s more money flowing, prices tend to increase. When there’s less liquidity, less money circulating, prices tend to decline. One of the ways the Fed controls the circulation of money is by raising or lowering the overnight lending rates –basically what it costs banks to borrow money and lend it out.

The Fed lowered these short-term interest rates to near zero levels after the Great Recession, in an attempt to jumpstart a flat-lined economy. It also bought bonds to keep interest rates low, and launched quantitative easing programs that essentially created money “out of thin air” for circulation.

It worked! With trillions of new, freshly minted dollars circulating, the economy came back to life, and a decade later, is booming.

But, a boom can also lead to a bubble, and bubbles burst. So the Fed regulates booms by lowering interest rates. One sign of an overheated economy is runaway inflation, so the Federal Reserve set 2% inflation as a benchmark for raising rates. Inflation hit that 2% mark in 2015, so the Fed began to reverse it’s easy money policies by raising rates.  Since then, the Fed has raised rates nine times, including four rate hikes in 2018 alone.

This attempt to slow things down also worked!

It’s not surprising. Higher rates make everything more expensive, which can curb borrowing and spending. This effectively pulls the throttle on the economy and slows down inflation.

Plus, there may be another reason why the Fed has been steadily raising rates. The economy has been booming for a decade now, and many economists believe it’s now near its peak. Some are predicting a recession by 2020. One of the Federal Reserve’s arsenals for turning around a recession is to lower interest rates. But if rates are already low, the Fed has nowhere to go. It has to go up first so it can go down again in the future. Therefore, some say the Fed has been raising rates so that they can lower rates again next year.

Mortgage Rates

Higher short-term interest rates makes it more expensive to buy cars,take out equity loans, and use credit cards. They also make variable-rate mortgages higher, but they do not have a direct influence on long-term mortgage rates. In fact, in December when the Fed raised rates for the 4th time, long-term mortgage rates actually went down. Why?

Long-term rates follow the bond market more closely than the Fed Fund rate. When investors are confident, they invest in the stock market. When they are fearful, they seek the safety of bonds — specifically the 10-year Treasury note. Those same investors tend to flock to the safety of mortgage-backed securities. When more investors are buying, prices decline. So when there’s more fear in the market, long-term interest rates tend to soften.

The Fed’s December rate hike rattled the stock market, sending anxious investors to the safety of bonds. As a result, stocks took a sharp nose dive in December. More purchasers of bonds and mortgage-backed securities effectively lowered long-term mortgage rates. This could help boosts home sales in the Spring.

The Federal Government

When it comes to the federal government, we’ve seen major policy changes that are influencing the housing market. Several are contained in the massive tax reform package that cut taxes and changed the rules for deductions. By lowering the corporate tax rate to 21%, businesses have more money to reinvest and expand their workforce, which puts more people back to work.

One of the biggest benefits for real estate investors is the new pass-through rule that allows people with LLCs and similar business operations to take a 20% deduction. So there are big benefits for all those Mom and Pop landlords who operate as LLCs. The new rules also preserve the highly-prized 1031 exchange, which was at risk of being eliminated. The new Opportunity Zone tax break program is also part of that tax package.

Homeowners didn’t make out as well. They lost deductions for things like vacation homes and large mortgage payments, making homeownership, for some people, more expensive.

Low Unemployment

As I mentioned, those tax cuts were designed to lower the unemployment rate, which is now so low that it’s actually unhealthy for the economy. The data shows that we have more open positions than people looking for jobs. When there’s a shortage of workers, employers have to pay more. That extra expense is then passed on to consumers in the form of higher prices which contribute to inflation. If we start seeing higher prices, the Fed will be inclined to raise those short-term interest rates, which can also trigger other repercussions, like that stock market volatility.

What we need is workforce growth right now — not job growth. And this is a critical element for today’s economy because our workforce is actually shrinking. The U.S. birthrate has dropped to a 30-year low and continues to fall. Baby Boomers will be retiring in massive numbers, leaving more open positions in their wake. And there’s the debate over immigration, and the value of immigrants for jobs like farming and construction.

Economic and Housing Repercussions

So here are some of my predictions for 2019:

The GDP will slow down to around 2% from 3%, as the effects of those tax cuts wear off. High housing prices and interest rates could also help slow growth, along with trade tensions, domestic politics, and the current pullback by China. But, I don’t think we’ll see a recession, this year.

Unemployment will rise slightly due to a changing workforce that includes less corporate dollars for new jobs. An unemployment rate of4 to 6% is considered healthy, so a slightly higher jobless rate could be good for our economy.

Mortgage rates will remain relatively low. The Fed is expected to hold off on rate hikes during the first half of the year as it reassesses the economy. If we see another rate hike or two, it probably won’t take place until later this year.

Consumer debt will increase because it’s now more expensive to borrow money.

Demand for rentals will remain strong because homeownership has gotten more expensive.

Return to Normal Gains

We’ve been so spoiled over the last 10 years by double-digit gains. Investors need to start expecting more normal returns. Syndications will go back to 6% preferred returns, with an equity kicker on the back end that would bring the IRR to just over 10%. Unless you find that home run — like our development in Costa Rica, where we got the land cheap and received entitlements quickly such that we were able to get our glamping resort up and running, effectively lowering holding costs. We are expecting investors to receive an 18% return on that one. But these types of deals will be fewer and further between.

If you’re expecting another 2008 housing meltdown where you can pick up properties for pennies on the dollar, you may be waiting a long time.

There is No “One” Housing Market

We also have to remember that the national housing market isn’t just “one” housing market. Instead, it’s made up of thousands of diverse housing markets. The key to higher returns is finding emerging markets — those with job and population growth, but with real estate values still below their peak. These types of areas give investors both cash flow today and a strong chance of appreciation in the future — a win/win, whether a recession is coming or not.

What happens when we do get hit by another housing recession?

We have to remember, today’s housing scenario is very different than in 2008. Back then, loan underwriting was loose. Today, it’s still very tight. This time, most homeowners have equity in their home. Back then, they did not. Today, homeowners are locked into historically low interest rates. It would be much more expensive to sell or to rent, so they will hold onto their homes. Plus, Airbnb wasn’t prominent in 2008. Today, people can rent out rooms in order to make house payments.  That brings me to my 7th and final prediction:

The housing market will remain on solid ground although price growth will be slower.

The recent slide in mortgage rates is corresponding to more activity from home buyers. That’s an indication that by keeping interest rates about where they are now, the housing market will thrive. We may see some turmoil at the high end of the housing market due to things like the tax law and stock market gyrations, but the housing market as a whole will likely see growth in more affordable markets.

The trick is to find the right markets. Real estate investors want to be in growth markets. And there are several good markets where that makes sense. The Real Wealth Network has identified 15 markets that can provide a good return on your investment. Some are better for appreciation. Others are better for cash flow. We have more information about those markets at our website


Kathy Fettke

Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life.

With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row.

Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.




A Hidden Wealth-Building Tool Every Investor Should Know About

If you already have a million dollars set aside for your retirement years – a figure most experts recommend as a goal – you’re not the norm.

According to 2013 data from the Economic Policy Institute (EPI),  individuals living on the cusp of retirement age (in their 50s and 60s) are well behind $1 million in savings. As of five years ago, soon to be retirees are coming in at $124,831 and $163,577 respectively.

A retirement savings crisis

More recently, an annual survey conducted by insurer Northwestern Mutual, found that one in three Americans has less than $5,000 set aside for retirement!

And while the data in Northwestern’s report is impacted by other age groups, the fact is that many Americans are well behind the one million dollar goal for their retirement portfolios.

In fact, a 2017 report from the Government Accountability Office (GAO) discovered that “about half of households age 55 and older have no retirement savings – and up to two-thirds of workers may not have saved enough to maintain their standard of living in retirement.”

Whether or not you’re behind in your retirement savings goals, as a savvy investor, you know why it’s smart to always be on the lookout for a great opportunity to grow your portfolio.

A self-directed IRA (SDIRA) is one such opportunity. And while it’s an investment tool that’s been around a while – since the 70s, actually – the truth is that it’s often “hidden” in plain sight.


Because banks and brokerage firms are, by and large, the custodians who offer traditional IRAs, which invest in stocks, bonds, mutual funds, etc.

Alternative investments, then, aren’t on their radar so of course, they’re not going to advertise SDIRAs.

Investment choices

While there are many things you can choose to invest in, the following investment choices are among the most common.:

Stock market

Many individuals – perhaps even you – have made a lot of money on the stock market. But not everyone wants to invest in stocks, bonds, futures, commodities, etc.

Fortunately, for these individuals, there are always alternative investment options such as property investing.

Real estate investing

As you know, investing in real estate can be a very satisfying way to build wealth. It’s easy to understand and much of it is entirely within your control.

But, even if you choose to diversify your real estate holdings among a variety of real estate types; commercial, residential, multi-tenant, etc., at the end of the day you’re still investing in one asset class.

Pensions, 401k

Most employers offer some type of retirement funding option…and if it suits your retirement strategy these can be useful ways to build your nest egg.

However, you’re limited on how much you can contribute and you’re not in full control of the investments your plan makes.

Traditional and Roth IRAs, Self-Directed IRAs

With a self-directed IRA, you are in complete control of the investments you choose.  In fact, one of the best things about a self-directed IRA is that you can invest according to what you know and like.

Wine connoisseur?  Great! Your SDIRA can invest in a winery.

Want to lend money to a family member?

You may be able to do that (assuming they’re not a disqualified individual)

And then, of course, there’s real estate.

Following are just some of the types of real estate an IRA can invest in:

  • Raw land
  • Rental income properties
  • Manufactured homes
  • Public storage units
    Trust deeds
  • Secured notes
  • Parking lots, etc.
  • Timber rights
  • Mineral rights
  • Tree farms

Bottom line, with an SDIRA you have TOTAL CONTROL over your investment choices.

A quick overview of prohibited and acceptable transactions and parties when using a self-directed IRA:

  • You can’t buy from yourself or another prohibited person. (think “up and down” your family tree; parents, kids, spouses)
    • You can, however, go “left to right”, so siblings, uncles, aunts, cousins, etc. are not disqualified parties.
  • You can’t use your IRA as collateral for a personal loan.
  • Co-mingling is prohibited (e.g. if your IRA is the owner of record and you start paying for the roof leak, etc. with taxable dollars, the IRS considers it to be commingling your taxable money with your qualified money)
  • As you’re probably aware, expenses and cash flows would have to go through the IRA. Because it’s the owner, all the rent and income flow back into the IRA.
  • Obviously then, the same thing would apply if you had an expense in connection with the property (or other assets).

Self-directed IRA changes for 2019

If you already invest in an SDIRA or plan to, the following changes for self-directed IRAs will happen next year.:

New contribution limits for 2019

  • 2018 – $5,500
  • 2019 – $6,000

Individuals over 50

  • 2018 – $6,500
  • 2019 – $7,000

401(k) employee contributions


  • under 50 – $18,500
  • 50+ – $24,500


  • under 50 – $19,000
  • 50+ – $25,000


2018 – $55,000 Max Considered Compensation – $275,000

2019 – $56,000 Max Considered Compensation – $280,000



  • Under 50 – $12,500
  • 50+ – $15,500


  • Under 50 – $13,000
  • 50+ – $16,000

As of October 2018, the ability to recharacterize a Roth conversion has ended.

As of March, 2018, there was a reported $9.2 Trillion in IRAs in the U.S. (up from $8.7 trillion).

If you’re looking for an investment option outside of Wall Street, a self-directed IRA is a great investment choice.

Creating your SDIRA

Opening up your own self-directed IRA is easy, but it will require setting it up with a custodian who can handle the administrative work for you to make sure you get the tax breaks you’re eligible for and that the IRS requirements are met.

  1. Open and fund your IRA (using new deposit or move money from an existing IRA or another retirement vehicle)
    1. Fill out an application
    2. Provide proof of your identity (eg. Drivers’ license)
    3. Provide a method of payment
  2. Choose your investment
  3. Purchase the investment through your IRA (note: the asset will not be in your personal name, but will be held in the name of the IRA, for your benefit (your custodian will send the funds from your IRA to purchase the investment)
  4. Manage your investment
  5. Sell the investment – proceeds return to IRA tax-deferred or tax-free and can be used for future investments

Remember…the custodian you use is passive – they don’t give you advice, they’re just a holding entity, that’s all.

When you’re looking for a home for your SDIRA, go with an experienced company like UDirectIRA.

UDirectIRA provides administrative services for investors.

“We help people invest outside the stock market to improve their financial future,” said Kaaren Hall, CEO of UDirectIRA. Investors should know that self-directed IRAs are a great way to invest in asset classes that they understand.

“There is a retirement crisis in America. Ten thousand people are turning 65 every day. In fact, I read one article that said there are more older people than there are children in the world, which is a first time ever, so our population, on the whole, is aging, but people aren’t prepared to retire.

“Even if you have, for example, $100,000 in an IRA account. It seems like a lot of money, but I did the math one time and figured out that if you’re 59 1/2 and you’ve got $100,000, assuming no gain or loss, that means only $396.83 a month if you live till 86.5.  We have to get busy and build our nest eggs so we can have a quality retirement.  $400 a month is not going to cut it for anyone.”

“Know that if you take even, monthly distributions, that’s only going to give you just under $400 dollars a month!

“Everybody needs to retire at some point in time, and most people don’t have enough money saved. It’s a real crisis and we’re trying to help people avoid that through the use of Self-Directed IRAs.  A Self-Directed IRA, invested in asset classes our account holders understand,  means more control over their financial future”.


Kaaren Hall

Kaaren has helped hundreds of people self­direct their retirement savings. A native of California, she has a 17­year background in Real Estate, Property Management and Mortgage Lending. She has worked at such companies as Bank of America, Centex Homes, Pulte Homes and Indymac Bank. She’s held a real estate license in Washington, T exas and California and a Life & Health license in California.

Her company , uDirect IRA Services, LLC, offers self­directed education and services to investors, providing excellent customer service. Kaaren is a public speaker and master networker . A mother of two, she lives in Orange County.



Retirement Savings – History & Trends

By Kaaren Hall

“The retirement crisis is the largest and most urgent global crisis we face today.”

The world’s most respected economists and financial analysts believe the pending retirement crisis is of paramount importance. So how did we land here? How have retirement plans evolved over the years? What risks and challenges do individuals face now? What emerging trends and strategies are arising that could save the global economy, and your financial future?

To really get the value, the importance, the right perspective, and the potential of self-directed IRA investing it is critical to understand the history and emerging trends…

A Quick History of Retirement Accounts

  • 13 BC Roman Emperor Augustus began pensions for legionnaires with 20 years of service[1].
  • In the 1st century the New Testament pioneered the idea of tithing to help the poor and widows.
  • 1717 the Presbyterian Church begins a fund for retiring ministers[2].
  • In 1889 century if Plymouth colonists were wounded in combat they received a pension[3] to support their families. However, the tax collection to raise these funds was often carried out by the ‘retired’ veterans themselves.
  • In 1875 the first private pension plan in America was created by the American Express Railroad.
  • 1900 – Life expectancy is 49 years old[4], with retired workers generally being disabled.
  • In 1935 Franklin D. Roosevelt signed the Social Security Act into law. The act provided a fixed income for the disabled and retired workers aged 65+. This was funded by a 1% tax on employees and their employers. By 2006 that tax had risen to 7.65% on employees and employers.
  • 1974 saw the birth of tax deductible IRAs.
  • In 1981 401ks were established.
  • Then Roth IRAs were born in 1997.
  • In 2009 uDirect IRA Services, LLC was launched to assist individuals with self-directed IRA accounts (and Solo 401(k) accounts)
  • August 31, 2016, S&P Dow Jones Indices and MSCI moved stock-exchange listed Equity REITs and other listed real estate companies from the Financials Sector of their Global Industry Classification Standard (GICS®) to a new Real Estate Sector.

Looking back a couple of century’s average people just never lived long enough to retire, nor was simply dropping out to play golf and sip tea all day something people strived for. They simply worked till they dropped.

The ‘golden years’ was a term originally coined to refer to the peak working and earning years of 25 to 40. Now it is commonly used to describe a coveted period of relaxation, golfing, bingo, and travel, with plenty of income, and no work. Of course those are the golden years most of us are craving today; and if we can get there in our 40s we’re even happier (at least until we get bored).

So how well are Americans doing at achieving the finances needed for a retirement, and preferably a comfortable, and timely one? With ten-thousand Baby Boomers reaching age 65 every day for the next decade this is a question in desperate need of an answer. Not only is this large sector of our population aging but the vast majority of pensions are under-funded and Social Security is anything but secure.

The answer may well be found by taking retirement into our own hands and investing in the asset classes we know best. That’s what self-directed IRAs allow us to do. We can move our retirement accounts over to self-directed accounts and invest in “alternative assets” like real estate, private stock, precious metals, notes and more to secure our financial future.






Secure Your Future: Investing in Real Estate Through Self-Directed IRAs

By Kaaren Hall

Do you have a 401(k) with a previous employer or an IRA?

Are these accounts invested in stock market assets? Most retirement accounts are invested in stocks, bonds and mutual funds however the Self-Directed IRA lets you invest outside the stock market.

For over 40 years you have been able to invest your retirement dollars into assets like real estate and most people don’t know about it. In fact there is about $24 Trillion in US retirement accounts. Only 3-4% of that amount is invested in what’s called “alternative assets”.

When you think about building a retirement for yourself consider the Self-Directed IRA.

When it comes to investing in Real Estate, the Self-Directed IRA allows many ways to do this:

  • Residential real estate, including: apartments, single family homes, and duplexes

  • Commercial real estate

  • Undeveloped or raw land

  • REITs (Real Estate Investment Trusts)

  • Real estate notes (mortgages and deeds of trusts)

  • Promissory notes

  • Private limited partnerships, limited liability companies, and C corporations

  • Tax lien certificates

Take Joe for example. Joe retired from his employer at the age of 50. It was a forced retirement because the company was restructuring. He spent 20 years at his previous employer putting aside 15% of his annual earnings. Now that he was “retired” Joe decided to become a real estate agent.

He noticed his own IRA was losing money and putting this money into a self-directed IRA was something that made sense to him. Joe says, “It gave a monthly boost to my IRA account through the rent money. Plus it gave me equity growth. As a self-employed person, it has given me a small glimpse of security into my retirement age. Whenever that will be.”

Right now and for the next decade ten-thousand baby boomers will reach age 65 every day! The average account value for Americans 55 to 64 years old is $103,000. You have to ask yourself is that is going to be enough to sustain you through your retirement years?

Many people, like Joe, are enjoying the tax-deferred or tax-free benefits of using their IRAs and 401(k)s to secure a better financial future.

So how do they do it? Self-Directing your retirement is a 3-step process to 1) Open an account 2) Fund that account and then 3) invest.

We have helped thousands and we can help you accomplish your self-directed retirement goals at uDirect IRA Services.

Kaaren Hall

Kaaren has helped hundreds of people self­direct their retirement savings. A native of California, she has a 17­year background in Real Estate, Property Management and Mortgage Lending. She has worked at such companies as Bank of America, Centex Homes, Pulte Homes and Indymac Bank. She’s held a real estate license in Washington, Texas and California and a Life & Health license in California.

Her company, uDirect IRA Services, LLC, offers self­directed education and services to investors, providing excellent customer service. Kaaren is a public speaker and master networker. A mother of two, she lives in Orange County.

If you have a question about how to use your IRA to self­directed you can contact us here at or at 866.447.6598. Our website address is .


The Millionaires Investment Group

Michael Poggi, President of The Millionaires Investment Group, llc. Professional investor, National Speaker, Educator, Consultant and Motivator shares his vast knowledge of how YOU can benefit personally and professionally by learning about the hottest opportunities in investment Real Estate AND turn key business franchise opportunities inside WALMART, all tax free!!!


20 year old investment network started by Michael Poggi – Focused primarily on finding investment strategies in many sectors including Real estate, turnkey franchises, private lending and much more. The group is composed of accredited investors, Private institutional funds, IRA investors. There are over 1800 Active Investors Nationwide and 10,000 Members. They teach secrets about investing tax free using IRA’S and 401k plans. Investors like you partner with the group and with other members if needed in new construction, the hottest turn-key proven franchises, and vacant lots in resort communities using cash, IRA’S and 401 K plans.

Things to know:

There’s a secret that the richest Americans use to create and keep their wealth. They use tax-deferred or tax-free dealings in real estate and other exceptional investments. If you own an IRA, or if you are thinking of opening an IRA, you have the same opportunity to unlock that secret and build wealth for yourself.

Smart investors are earning 15 to 20%, or more, inside their Self-Directed IRAs. The money in their IRAs compound tax-deferred or even tax-free for as long as the IRA is in existence.

Most people realize that they need to save for retirement, but have a tendency to place this on the bottom of their “to do” list. It’s hard to think about the future when the daily issues of life are enough to fill our time. The sooner you start planning, the better off you will be. What do you have to look forward to?

The senior population is dramatically increasing, especially as the baby-boomers enter retirement age. These seniors are living a healthier lifestyle with better medical care, leading to a longer life. A longer life span means more money is needed to provide a comfortable lifestyle in those later years. Where will this money come from?

Social Security benefits will barely account for enough to provide for even basic necessities. If you have other income, up to 85% of those benefits can be taxed by the federal government. If you begin taking the benefits before age 66, your benefits will be lowered permanently. With the increasing number of retirees pulling money out of the Social Security system, there are concerns that the system will run out of money for future generations. Can you depend on Social Security for all of your expenses?

What is a Self-Directed IRA?

A Self-Directed Individual Retirement Account is an IRA that requires the account owner to make investment decisions and investments on behalf of the retirement plan. IRS regulations require that either a qualified trustee or custodian hold the IRA assets on behalf of the IRA owner. Generally the trustee/custodian will maintain the assets and all transaction and other records pertaining to them, file required IRS reports, issue client statements, assist in helping clients understand the rules and regulations pertaining to certain prohibited transactions, and perform other administrative duties on behalf of the Self-directed IRA owner for the life of the IRA account. Self-directed IRA accounts are typically not limited to a select group of asset types (e.g., stocks, bonds, and mutual funds), and most truly self-directed IRA custodians will permit their clients to engage in investments in most, if not all, of the IRS permitted investment types. Some of the additional investment options permitted under the regulations include, but are not limited to, real estate, franchises, partnerships, private equity, etc. Self-directed IRAs, by allowing a wide range of investment choices, improve the account owner’s opportunities to diversify their IRA portfolio(s).

Why should I have a Self-Directed IRA?

The government is running out of money and encourages people to provide for their own retirement by offering HUGE tax advantages to anyone investing through an IRA. With a self-directed IRA, you can invest in real estate, something most people can’t do with a traditional IRA.

A self-directed IRA allows you to invest your funds yourself into investments like solid long term real estate, which means you can earn a lot more for your retirement than you would with a traditional IRA.

Four Basic Facts about Self-Directed IRA Real Estate Investments.

  1. Limited custodial participation and reduced custodial fees. Means you have more control and can earn more money.

  1. The difference between traditional IRAs and self-directed IRAs is the breadth of options for investing. Traditional IRAs only permit investment options in approved stocks, mutual funds, bonds, and CDs which are usually not the best choices.

  1. A self-directed IRA allows you to have complete control over your funds, with most people opting to be custodians of their accounts.

  1. Self-directed IRA real estate investments can be very profitable if handled and managed correctly, which is why many people decide to pursue these alternatives to constrained, traditional IRA investing. Before setting up a self-directed IRA, you should contact us for help with the right type of IRA and the right investment strategies.

Self Directed IRA real estate investments make good sense. Not everyone has them, because not everyone is aware it is possible to have them. If your financial advisors only advise you to put your IRA money into stocks and bonds, you may not know anything about Self Directed IRA for real estate and businesses.

You may be someone who doesn’t have the time to spend educating yourself on other areas that the IRS allows you to invest your tax-free or tax-deferred retirement funds. In this article, you can learn a few things about investing your IRA money in real estate and businesses.

There are eight things you need to know when considering investing in real estate with a self directed IRA. They are listed below:

1. Your IRA cannot purchase property that is already owned by you or a disqualified person. A disqualified person is your spouse, parents, grandparents or great grandparents, children and their spouses, grand children and great grand children and their spouses. There are a few others, which you can find in IRS Code Section 4975.

2. You (or any disqualified person from the list above) cannot receive indirect benefits from property owned by your IRA, such as taking a vacation in resort property or renting office space in commercial property that your self-directed IRA owns.

3. Your IRA needs to be titled in the name of the IRA, NOT in your personal name.

4. The real estate in an IRA doesn’t have to be 100% funded from your IRA. You can partner with a friend or family member. For example, let’s say you found some property for your self-directed IRA real estate account, and you need $100,000 in order to purchase it. However, your IRA account only has $25,000. In this case, your friend could provide the other $75,000. Your friend would own 75% of the property and your IRA would own 25%.

5. If your self-directed IRA uses financing to purchase real estate, the loan must be a non-recourse loan, and your IRA must pay unrelated business income tax or UBIT.

6. All expenses, such as maintenance, improvements, property taxes, and any other expenditure to own and/or maintain the property must be paid from the self-directed IRA. No personal funds may be used for any expenses.

7. All income from the IRA must also go back into the IRA account. You may not deposit any money, such as rental income into your personal account.

8. You will need someone like us to help you fill out all the paperwork required by the IRS. We are very familiar with each of the points above. We can help you through the entire process, even the most important part of finding the right investment strategies to bring you great returns. You can find your own properties, franchises or strategies, but unless you have lots of experience and you are an expert, your best bet is to leave that part to the professionals like us. We have several investment strategies available for you to participate in either with us as a partner or on your own.






The Self-Directed IRA Card that Changes DYNAMICS in Investing

Interview by Tim Houghten

Ever wished self-direct-ed IRA investing was simpler for you and those you work with?

Wished that all the net return and tax advantages of investing through an IRA where as easy to wield, and as comfortable as having cash in your pocket, swiping a card, or making online and mobile payments from your smart-phone?

The Entrust Group myDirection Visa® Card delivers all of that.


Self-directed IRAs are undeniably one of the best power tools available to investors today. Self-directed IRAs just makes investing better, and more profitable. Not having one means paying more in taxes, and suffering subpar investment returns.

Yet, until now many have passed on the power perks of this vehicle due to perceiving it as complicated, sluggish, and time consuming. This isn’t just a problem for individual investors, but for real estate educators and professionals, and their clients that stand to win so much.

The Entrust Group myDirection Card promises to tear down these old barriers, to deliver more of what investors want, need and deserve. It’s the ability and flexibility to direct your future with the swipe of a card or a smartphone app. The new pre-paid Visa card powered by citi enables individual investors to maintain control of their funds, on-demand.


1. Make instant transactions

2. Save on transaction fees and paperwork

3. Invest online


In an exclusive interview with Certified IRA Services Professional and President of The Entrust Group, Jason Craig highlights some of the critical investor needs that the myDirection card solves. When put in perspective it’s pretty clear that a card like this is essential for enabling investors to operate effectively in today’s modern landscape, while maximizing opportunities.

Being able to invest online is a huge step for IRA account holders. This means being able to take advantage of crowdfunding opportunities and auctions. Even in person investors can now potentially snap up tax-liens, mortgage notes, and auction properties with their cards.

Entrust’s Jason Craig also highlights card benefits that go beyond acquisition to asset and property management. For example, if you own real estate in your IRA the antiquated tradition required contacting your administrator, submitting contractor estimates, and having checks mailed, all before being able to get contractors to work on repairs. That’s not highly efficient on a weekend evening when a major leak shows up. So the card not only “reduces time to payment and action, but eliminates the hassle of receipts, wasted time, and reduces expenses.” That means more freedom, and net profit.


Craig explains that one of the reasons a card like this has taken so long to launch is the meticulous attention and re-ver-ifying in every step to ensure compliance, user experience, functionality, and “getting it just right.” It’s kind of like Elon Musk designing the new Tesla SUV, and ensuring the artistic middle row seats fit just right between the wing doors as it carries executives want to go. You can’t rush perfection.

The card itself is an asset held within the investor’s IRA. Account holders can have their cards reloaded with more cash as needed in amounts from $100 to $25,000. To ensure compliance and avoid triggering “prohibited transactions” or taxable events, investors have 30 days after a transaction to certify what it was for.


Craig joined The Entrust Group in 2007. Along with pioneer of the first “truly self-directed IRA” founder Hubert Bromma. One of the longest established self-direct-ed IRA companies (since 1981), The Entrust Group now offers arobust, tech-savvy, stronger partner for investors. Craig describes some of the changes as including the consolidation of franchises to bring everything back into one streamlined powerhouse for superior service and compliance. This along with bringing over the human touch and one-on-one service approach from Craig’s private banking background has resulted in a consistent “90% plus client satisfaction rate.”

Another tech tool this has produced for investors is the Saved-Plus mobile app. While most advocates for IRA investing in the real estate world focus on those with existing large balance accounts, this app enables those just starting out to “open an account, save, and monitor their accounts right from their mobile phones.”

Automated transfers can even be created to build up a retirement account based upon preset criteria, including a percentage of expenses on other cards. For example, you might want to ensure you are diligently and religiously setting aside at least 25% of what you spend on entertainment and eating out each month. This app puts that on autopilot, and helps you stay on track to investing.


The Entrust Group’s motto is: “We don’t compete. We complement.” Jason Craig states that “we work with a lot of REALTORS ® , are a Keller Williams preferred vendor, and attend NAR shows.” In the past, the firm has also collaborated on educational events and seminars with real estate investment groups and real estate related trade shows. Support and opportunities include training, free professional marketing materials, participating in live workshops, and discounted fees for opening self-directed IRA accounts.

To propel action and add real value Craig says that accounts “can now be set up the same day.” This means real estate pros and businesses can not only attract more prospects and raise their awareness of these tools and tactics for releasing more capital, but can actively and instantly help more clients in a bigger way, while unleashing their own business volume potential. And the myDirection Card is going to make conversions and action a lot easier than ever before.

Go online to for more tools, details of the B2B accelerator program, to download the SavedPlus app, and request a myDirection card. No one should be caught without one.


Retire Wealthy with IRA Investing

By Stephanie B. Mojica

Self-directed individual retirement accounts or IRAs are rapidly growing in popularity, but experts warn that it is important to only get into such an investment with proper education and professional guidance.

Kaaren Hall, owner of uDirect IRA Services in Orange County, Calif., says even after more than two decades in the financial industry and four years of running her company she too must continually stay on top of her investment education particularly regarding Internal Revenue Service guidelines for retirement accounts.

Self-directed IRAs allow people to invest their retirement funds into a variety of options outside of the traditional stock market, including real estate, land, and private notes.

“Financial literacy is not taught in schools, but our future depends on understanding it,” Hall says. “Only about 4 percent of u.S. investors have a self-directed IRA. Why? Because most investors and many advisors simply aren’t aware of it.”

But even those who are aware of the potential financial power of self directed IRAs often do not fully comprehend is the IRS guidelines of “prohibited transactions,” according to Hall.

“You’re not allowed to have any personal benefit from your IRA prior to retirement,” Hall says.

A common misconception among investors is that they can use the self-directed IRA funds to purchase real estate or other property from themselves or close relatives such as a spouse, a child, a grandchild, a parent, a grandparent and any spouses of such relatives. These transactions are not permitted under self-directed IRAs, according to Hall. However, an investor could purchase property from a more distant relative such as a sibling, a cousin, a niece, or an uncle.

“Make sure you know what you’re doing,” Hall says. “We’re here to help people so they understand the twists and turns as much as possible.”

The term self-directed in itself misleads some people because it is the IRA doing the investing, Hall adds.

“So that’s confusing because they get into trouble by maybe signing a purchase contract (in their own name),” she says. “Your IRA can’t buy an asset that you own.”

Consequently, people should wait until they actually open an account with a qualified custodian before funding it and making transactions, Hall says. Generally, a custodian rather than the actual investor should sign purchase contracts relevant to self-directed IRAs.

While representatives of companies such as uDirect IRA do not give actual investment advice due to potential legal liability, they can help people follow ever-changing IRS guidelines.

Hall, a former mortgage broker whose work history includes Bank of America and Indymac Bank, has educated tens of thousands of investors into deciding whether self-directed IRAs are right for them. She and her associates have directly worked with thousands of clients.

To learn more about self-directed IRAs, call 866-447-6598 or visit