John Bowens: Real Estate IRA's

Tracy Hayes  1:06  
Hey, welcome to Real Estate excellence podcast. Best of the Best is what I promise you each and every week and today, I have that individual in an area that not many have an expertise in, but this gentleman is and reading his bio and looking at his experience and what he's done. Has a book out, and we'll talk about that here in the show as well, regarding self directed IRAs and John Bowens of equity trust has been in the real estate industry for over 15 years as an active investor. He travels across the country in the US, and virtually has trained over 60,000 investors during more than 400 workshops and classes, spreading the message about the power of building tax free wealth and living a lasting legacy investing in what what you know best, and that's in real estate. So John has a book out, self directed IRAs building retirement wealth through alternative investing. And we'll find out how we all can get a copy of that. And he's peered on several national real estate and finance related radio shows as well. I assume you're from Ohio. You went

John Bowen  2:14  
Ohio University. I am an Ohio native, and that's where our office is located. Here, born and raised, and plan on spending the rest of my life here, hopefully,

Tracy Hayes  2:22  
excellent, excellent. So John, tell us a little about before we dig right into the the you know, the knowledge there just a little bit of background whereabouts in Ohio you from, and what led you to Ohio University.

John Bowen  2:33  
So, yeah, born and raised in Cleveland, Ohio, that's where the equity trust company headquarters is located. Got my start in real estate pretty early on in my teenage years, I worked for a real estate company. I continued to work for that company throughout my college years, and then even post college, and then shortly after that is when I stumbled across equity Trust Company. So been with equity trust for 12, going on 13 years, and I've been around real estate and involved in real estate very intimately for 15 years. And really, when you look at my entire lifespan, it's been closer to 20 years, because I grew up around real estate, and it was a good friend of mine. His family was involved in commercial and residential property, and so I grew up fixing houses, renovating commercial properties in preparation for new tenants, and that's what really got me interested in real estate. I saw the cash flow opportunity. I saw the opportunity with owning hard assets. And then I pursued a degree in Finance where I learned a lot about financial planning and working on a one on one basis with individuals on how to create a portfolio primarily of traditional stocks, bonds and mutual funds. And so I sort of took my background in real estate and then personal finance and brought them together and stumbled across equity trust. And it really met the both worlds that I was looking to focus on, which is helping individuals acquire wealth and preserve wealth, and do that all by in the way of investing in real estate. So myself, I own real estate. My wife and I, we have rental properties. We loan money to other real estate investors. We use IRA funds, self directed IRAs and self directed accounts, as well as as non self directed accounts. So call it taxable accounts. So we have experienced on both sides, but of course, our focus is trying, trying to create tax free and tax deferred profits. So Tracy, what I talk a lot about is this whole concept of compounding interest in the absence of taxation. And so what I teach and what I try to preach and practice myself is creating wealth and preserving wealth, utilizing these tax deferred and tax free instruments, which, from my perspective, can be incredibly powerful over long periods of time.

Tracy Hayes  4:57  
So that's that's amazing. I mean, so when you. Left Ohio University, your first job there for several years before running an equity are you out there, you know, with a hammer at times, or just running teams or, I mean, what were you? What were you involved in there for, and how? When, when you that business relate to when you go out and do these instructions, these seminars and so forth, relating. Because obviously, guys like me out there doing that investment, you're doing it yourself already. That's your experience. But prior to coming to equity, you brought that experience to you, to relate to its customers. Yeah.

John Bowen  5:35  
So it's interesting, you know, probably one of few that started off in the construction arena. So I was running construction crews. I was managing projects, doing some of the call it minor property management type duties. So I was out swinging the hammer to the nail, so to speak, day in and day out for years. And then, you know, I got to a point where, you know, it made sense for me to take the next step in my career, professionally, as well as from an investor perspective, I wanted to pursue investments on my own, so I was working for a company where I was helping renovate residential and commercial properties for years, and watching that company obviously grow and expand and generate cash flow. And I said, Hey, why can't I do this myself? And so it was time for me, at that point, to move on from my career in what I was doing at that point and pursue the opportunity with equity trust. And so what that afforded me the ability to do is one be able to invest my own self directed IRAs and learn how to do this, and then also teach other investors how to do that. So very quickly, within the organization, I began presenting at various seminars and conferences, participating in writing books, radio shows, and working one on one with clients. And I've worked one on one with 1000s of investors everywhere from the person that is only maybe has $50,000 to start with, to the person that's got $50 million in a retirement plan. So I've been blessed over the years to be able to learn from from other clients and investors, be able to deploy some of those same strategies and techniques in my own portfolio for myself and my family, as well as be able to teach other investors on how to replicate those some same techniques and strategies.

Tracy Hayes  7:22  
So what I find, because obviously equity trust, when I looked around, because I'm a customer, and my wife and I will use my rollover for 1k moved it into the self directed IRA with equity you just threatened to be to live in the same town, is that, I mean the uniqueness of what the skill set that you had and where you wanted to go, because there's not, you know, like in the mortgage world, there's more, you know, you can go pretty much. You can go any city and become a mortgage lender, right, or a loan originator, but what you're doing is very unique. There's not a lot in the country that offered the services of equity. Am I right?

John Bowen  7:59  
You're absolutely right. Tracy, you know, I'll say that you know something. I don't know what it is, but something tied me to equity, trust, location, you mentioned you're right. There aren't many self directed IRA custodians or administrators or firms that will do this equity. For example, we're one of about 100 but there's really only about four or five that have a substantial presence in the industry, and we're one of the largest firms that that does this. We've been doing it since 1974 so we've been around a really long time. We have over $30 billion in assets under custody administration. Our focus is alternative investments with a secondary focus, I'll say, of real estate. So call it a sub category of alternative investments. Is real estate, and that's been a major focus of ours since the early 80s, when our company founder dick desage put together one of the very first real estate transactions with self directed IRAs and in Furthermore, even more serendipitous, I'll say, Tracy is there's this account type called a Roth IRA. You've probably heard of. Yep. It's one of the most powerful tax savings and wealth preservation vehicles that is afforded to us by the federal government. And the founder, if you will, or legislative sponsor of the Roth IRA. His name is William Roth Jr. He was a senator from Delaware, and he's since passed away. Here's where the serendipitous part comes into play. So William Ross birthday was July 22 my father's birthday is July 22 so I tell all of our audience, listeners and viewers, that you know that there's, there's a coincidence there that I can't explain, but you know, I'm absolutely in the right place here in terms of teaching people about how to use these accounts, particularly a Roth IRA Tracy, because, for example, I have a property in my Roth IRA, it generates tax free cash flow. That tax free cash flow I can reinvest into more properties. I can make loans to other investors. I can invest in really, whatever it is that I feel comfortable with. Investing in so as long as it fits within the confines of the tax code, which is pretty broad. And then when I sell that rental property, there's no long term capital gains tax, there's no depreciation recapture. Every year, I don't have to file a Schedule E or any other type of tax return for my IRA. It's all tax free profit in my retirement plan, right? And that example there, when I say compounding interest in the absence of taxation, that's exactly what I'm talking about. There is being able to create tax free profit, reinvest. I call it re, rinse, repeat, reload, reinvest, and then be able to go out and pursue more opportunities. And ultimately, it's how do I get to my retirement goals in a shorter period of time, my wife and I have aggressive retirement goals to retire younger than probably most people retire. Sure, and the way that we're doing that, the way that we're getting there, is the same exact way that so many clients before me have gotten there, and that's deploying these Roth IRAs and other tax advantaged investment accounts into income producing real estate investment opportunities, redeploying it into more investment opportunities, being very disciplined in our financial approach, and ultimately leveraging, again, what I said compounding interest in the absence of taxation.

Tracy Hayes  11:12  
So that's the formula you brought. Yeah. I mean, so you bring up something very interesting, because my wife has actually gone, you know, from the corporate world to being a real estate agent full time. She said something to me that day, why didn't you? Why do you? Why didn't I do this earlier? So, so she has her old 401 K's as well, but now she's doing very well. As you know, obviously a 1099, real estate agent who hopefully a lot of listeners on to the show, our agents are related to them. And, you know, they're getting this lump sum check every, hopefully several times a month. And they could be putting something into a Roth IRA, like you're instructing and correct me if I'm wrong. And then, but then turn around after they get, you know, get enough funds in there, start utilizing it within the industry that they're in. And know so well by buying some investment properties with it.

John Bowen  12:04  
That's correct, Tracy. And even better, your wife being a 1099, employee, we'll call it, she's self employed. So she's an employee of her own self employed business, employer and employee, she most likely qualifies for what's called a solo 401 K, and with a solo 401 k, that you can self direct into real estate, just like an IRA, you can elect to defer money into what's called a Roth component. And here's the reason why that's important, Tracy, instead of only being able to contribute per year, six or $7,000 into a Roth IRA with a Roth solo, 401, k, when you're under the age of 50, you can contribute up to $19,500 in tax year 2021, if you're 50 and over, you can contribute up to $26,000 but then it doesn't stop there, because there's also an employer deferral. And not to get too down into the weeds or confuse anyone, right? But the long and short of it is with the solo 401, k, if your wife is making enough commission and paying taxes on that commission, that's key. She's paying Medicare and Social Security tax, payroll taxes on that commission, she could potentially get upwards of $58,000 when under the age of 50, once you get to 50 and over, that amount tunes up to $64,500 and you can get all of that money into the Roth component. There's a few nuts and bolts that you have to understand, which we teach investors about. We have YouTube videos and all kinds of training on Yes, but the long and short of it is, she could potentially as a licensed realer, taking commission, paying herself income and paying taxes on that said income, she could potentially get upwards of over $60,000 eventually per year into one of these Roth solo 401,

Tracy Hayes  13:50  
KS, as soon as the service you offer at equity, that's correct.

John Bowen  13:54  
So it's an it's an account type. You have IRAs, you have solo 401, KS, they're just merely account types, and we offer all of those various types of accounts.

Tracy Hayes  14:04  
That's amazing, because it sounds like we're going to have a discussion tonight at dinner over that right there, because we were just talking about that situation. It says she's doing very well. We're, you know, guesstimating on, you know, where are both incomes? Or both of us are commission based incomes, and obviously real estate is on fire in Northeast Florida, and that is an area there, so that would that's a huge nugget right there. John, I appreciate that, so let's simplify it. If I could give my own experience briefly using equity trust in the in the real estate purchases I made with my rollover for one game. You guys really keep it simple from the technology standpoint there, really, we don't. I mean, there's the rules which I want you to go through. You know that are very stringent things you can and cannot do with that property that you use that money for. But as far as you know, soon as you're up and running. Running the technology when we need to pay the taxes, or we need to pay the insurance bill, or we need to pay a contractor had to go in there and replace the flooring or whatever, dabble or expand a little bit on there. How you guys have just really made it

John Bowen  15:16  
just simple? Yeah, absolutely. I appreciate that Tracy, and I haven't said it yet. So I appreciate you being a client of ours here at equity trust, and I personally am a client. I always say that I'm a client first, I'll say in a sort of representative second, but I do wear both hats, and I think it's important to mention that. And we always mentioned to our viewers and audience listeners that we don't give financial advice or recommendations, but we can provide a lot of education and information as it relates to what you were what you were saying there, Tracy, about the digital environment that we operate in today. You know, so many people are used to being able to do a bill pay online through their traditional bank or other financial institution, the ability to be able to make deposits, you know, quickly access information digitally. And we recognize this many years ago here at equity Trust Company. And so we've made considerable investments into technology, and we continue to make considerable investments into technology. Just a few examples of that are is our online my equity digital processing portal. So from a real estate perspective, for an investor that wants to buy a property, they simply log into an account online, and once they're in their online access, they're able to view their balance, their cash, their transactions, pay for fees and for real estate purchases, they simply fill out what we call a wizard, so it's a questionnaire online. The client provides us the address of the property or parcel, ID, the title company, information that they're going to be working with, and any other relevant details associated with the property purchase, and then they digitally authorize equity trust to send a wire transfer from the IRA directly to the title company. When there are documents that equity trust needs to sign for a closing, the customer can upload those documents directly into their portal. So I understand you're in the mortgage business. Tracy, most mortgage lenders have platforms where you access an online system, you upload your W twos and financial documents and other things of that nature. We have a very similar type of platform here. So you're logging in online, you're uploading all the necessary supporting documents for your investment, and then equity trust is wire transferring the funds out to the title company or closing attorney. This all happens, by the way, within 24 to 48 hours. In some instances, I've had cases where clients from an account open to funding to processing their first real estate transaction, they do it all in under a week. Now it is important that the account is set up and funded well in advance, so you do have to be cautious with this. You have to understand that if you're opening an account to make an investment, you want to make sure you start that process well in advance, because we're at the mercy of another financial institution. But if you're moving quick, you can get all this done again within 24 to 48 hours, and it's all driven through that online system. As far as expenses to be paid for from the IRA, which is important, as you know, Tracy, from the flooring to taxes, insurance, any contractor payments, anything that's related to an expense on that property, it has to be paid for from the IRA. And so for our clients, we offer them a online checkbook, essentially. So when they have expenses that come up, they go online, they request a check. We mail those checks to wherever they want. Us to mail those checks to that could be to their own address, so they can forward those checks to wherever they need to go, or maybe they have that check mailed directly to the recipient, so we have the capabilities of sending checks Ach, direct deposits, wire transfers. So if someone has an emergency situation, they need to wire transfer funds to their contractor to start renovations. Or if there's an emergency, we have the capability of accommodating those requests. And then on the rental income side, if it's a rental property, we have a tenant Payment Center where the tenant can go into a portal and they can key in their bank information, and then a direct deposit occurs right into the retirement plan. This all is important from a record keeping perspective. These are tax privileged IRAs, so you really want to make sure you're keeping impeccable records, and a good way to do that is to run everything through your equity trust, self directed IRA. So that way, you can simply log into your account in two clicks, you can export an Excel file, and it'll show all of your debits and all of your credits that are itemized per the specific holdings that you have in your account. So for example, I have rental property. I have notes in my IRA. I'm able to go in and see which rental income or which profits flowed back into each individual respect. Active holding. And then if any expenses there are incurred, I can see those itemized expenses as well within my individual account.

Tracy Hayes  20:08  
So Jenna, keep it simple for everyone that may be listening. And I'm assuming most of my listeners have never, maybe even knew this existed, to buy real estate with a self directed IRA. So, so the understanding is the IRA, although it's my IRA, the IRA owns the property. I do not, and so everything has to be transacted. That's way you're that's how you're protecting yourself tax wise. Because any profits are going, you know, the rental income is going right in there, any expenses are going out. So I'm not going on my tax return, on the end of the year and reporting this property, because the actually, the the IRA owns this property.

John Bowen  20:52  
That's correct, it's your IRA owning the property. Now you're in control of the IRA. Consider yourself the full time driver of that IRA equity trust isn't making decisions. We're not reviewing your investments. You're in a full decision making position. When the IRA acquires a property, it is your IRA, and you'll see that, because the deed to the property will be your IRA's name won't be an LLC or your personal name. It's in the name of your IRA. And I'm glad you brought this up, Tracy, because I've had a lot of new investors that are brand new to this concept. In their mind, they're thinking, I have to borrow from the IRA, or I have to pull money out of the IRA. And even worse, some people go to other sources, maybe a financial advisor or a CPA that may not be familiar with this, and they might say, Well, if you buy property with your IRA, you're going to have to take a distribution and you're going to pay taxes and penalties. Because what they might not know is that what you're actually trying to do is invest through a self directed IRA, which is just like if you buy a stock or mutual fund. So when you use an IRA to buy a stock or mutual fund, cash leaves the account and return for that. Cash is a stock certificate. When you buy real estate, it's the same concept. Cash leaves the account, goes to a title company and return for that. Cash is a deed to a property or whatever other type of asset you might be purchasing, and there's no tax. As long as you're doing everything properly and you're following the rules. There's no taxes or penalties associated with making those investments.

Tracy Hayes  22:25  
And just to put out there, this is not to buy. You're not buying a second home for your own personal benefit. You're not buying your mom's your your elderly mom, a home. This has to be invested. You can't be mix kind of, kind of like the corporation. You can't mix and mingle your personal with this property.

John Bowen  22:45  
That's correct there. There are what are called disqualified persons to your IRA, and we have a whole course on that so you can learn before you start investing, so you can make well informed decisions. But the long and short of it is, you can't self deal. You're that's a great example. Tracy, you can't buy a secondary house and live in it yourself with your IRA. You can't buy a house and rent it to your your children and their college friends, or your your mother in law or father in law. Those would be considered prohibited transactions. So you want to make sure you go into this with the intent to use your IRA for its intended purposes, which is for investment related purposes, and I think this is really important, Tracy, I'm glad you brought this up, because so many people try to use their IRA as a lifeboat. I don't look at my IRA as a lifeboat to try to get myself out of a financial bind, or try to bail myself out, or use it to buy a property that I want to use for personal uses. This IRA is so incredibly powerful, because I can create tax free profit, and like I said before, with compounding interest, in the absence of taxation, it's it's incredibly powerful. And so I really want to make sure I cherish those Ira dollars, and I want to use those for true investment related purposes. I don't look at my IRA like a lifeboat. I look at it like a speed boat, right? It's a high performance speed boat that's going to help me get to my retirement goals in a much shorter period of time than if I'm only investing with taxable dollars, because the erosion effect with my taxable accounts is significant in comparison to the compounding interest in the absence of taxation effects of my retirement plan. So really important to distinguish the difference between taxable investing and non taxable Ira investing in another powerful facet of an IRA is IRAs avoid probate and Tracy. This is something that so many investors fail to consider this

Tracy Hayes  24:41  
is something I know. Go on, please. So IRAs, this.

John Bowen  24:45  
This is IRAs. It's a, it's a federal, if you will, statute we're talking about here. So IRAs, when you pass away, avoid probate. Now you got to make sure when you set it up, you set it up with the right company. You got to make sure that. You have a beneficiary listed on your IRA. I give you an example. One of my IRAs, the beneficiary is my niece. I pass away and leave that IRA to my niece. It becomes an inherited Roth IRA for my niece. Let's say I'm 59 and a half or older, which is the qualified retirement age I pass away, I leave it to my niece. My niece now has a tax free Roth IRA. She can take all the money out, if she wants, and pay 0% tax, or she can continue to invest with the account for 10 years and then take it out and it's all tax free. But the key here is that it avoids probate. So whether I have a will or not, whether I have trust or not, it doesn't make a difference. My IRA is a trust, and it avoids probate when I leave it to my spouse, children, my niece, nephew, or any other loved one that I might leave that account to

Tracy Hayes  26:01  
I want to just change direction just a little bit, because the gentleman who referred me to you guys, Jonathan, he, he is a house flipper. He's done probably 20 plus homes. He's a veteran. So he goes, and he actually through his equity trust, self directed IRA. He is buying homes. He is refurbing them with the money from because the IRA owns it, so he has a check cut from the IRA to the contractor that goes in and so forth and does it. That's probably the most interesting, I think, is some of the people on there, my wife and I do more the long term rental thing, but they are people who are flipping homes. What are some other things that you knowledge that really blow our minds? Out there people are utilizing this tool for in real estate?

John Bowen  26:48  
Yes, yeah. So Tracy, great point. You know you can lend money with your IRA to other investors, secured by property you can invest in in partnerships, real estate partnerships. So let's say a friend of mine has an LLC. He's buying a commercial property. He's going to renovate it and sell it. We're going to flip it. My IRA can be a partner in that individual's deal. My IRA can flip houses. My IRA can hold rentals. My IRA can buy houses and sell on owner financing. My IRA can buy houses and sell on a lease option to purchase. Think of it as any investment strategy that you may have considered you have done before. You're looking to do in the future, for the most part, you can do with your IRA. There are some of those nuances of disqualified persons in prohibited transactions that we touched on a bit. But as long as you're following the rules, just about any real estate is acceptable. One thing that I would I would encourage folks to consider, and you ask about kind of interesting transactions. So there's this challenge that a lot of investors I see face, where maybe they feel that they don't have enough money in an IRA to do a deal, and so they sort of exclude themselves from using a self directed IRA, or ever even considering it. But there are ways that you can fund real estate transactions with even a small amount of money in an IRA. And I'll give you one example, a real estate joint venture with a third party. So the real world example a gentleman by the name of Scott. He's from Milwaukee, and Scott came to me about two years ago. He had a deal. It was a foreclosure. $224,000 was the full purchase and carrying cost. He was going to wholesale it, so the property actually didn't need really any work at all. He was going to buy it. It was a distressed foreclosure. He was going to buy it and then sell it wholesale, it for a profit, essentially going to retail it, right? So he needed 224,000 that was the full purchase, and then any carrying costs that he estimated. He knew as he was going to only hold it for maybe six months, tops, if that. So he needed, he had 24,000 in his Roth IRA, that's all you had. So he didn't have the full 224 for the full purchase. He had an investor friend of his that he met at a local real estate investor Association. Her name was Kate, and Kate had $200,000 in her self directed account that was just sitting on the sidelines earning 0% interest, 0% interest, sitting on the sidelines, not doing anything. So he approached her and said, Hey, I got this $224,000 deal. Here's my problem. My problem is I don't have 224,000 in my Roth IRA and I need to figure out how to grow this Roth IRA and I haven't figured it out yet. She has $200,000 and her problem is it's been earning 0% so it was, it was a good marriage in that respect. Now they're not related to one another, that's why this works. So they got with their real estate attorney who's been to my seminars, and he says, Okay, here's how we're going to structure the deal. We're going to create. A joint venture. Scott's Roth IRA is going to come in with his 24,000 Kate's IRA is going to come in with her 200,000 we're going to create a joint venture agreement. Per the terms of the joint venture agreement, Scott's Roth IRA, at the conclusion of the sale, is going to get 70% of the profit, and Kate's self directed account is going to get 30% of the profit

Tracy Hayes  30:23  
because he found the deal Exactly, yeah, he found that he brought the deal to the table. So he's getting, yeah,

John Bowen  30:30  
he's getting more equity because he brought the deal to the table. So when it was all said and done, the property made a $60,000 profit. 70% of that went back to Scott's Roth IRA, which is about 42,000 Kate made the remaining balance. Her return on investment was 9% in less than six months. So she went from a 0% return to an over 18% annualized return. And then Scott, with his $24,000 starting balance, grew his Roth IRA, to over $60,000 on just one singular transaction. So that's the way investors grow a smaller balance IRA, which I think is important in mentioning again, because a lot of people just feel excluded from the conversation, because they think, Well, I don't have 300 400 $500,000 in my IRA to go out and start buying real estate. You may not need that amount. You may just have to get creative.

Tracy Hayes  31:20  
What's the term? If you when I had this question actually came up several months ago, and we don't do these type of loans, but when you actually want to lenders, let there probably less lenders that do this than you guys do the self directed IRAs. But when they actually want to borrow money, matched with their IRA, yeah.

John Bowen  31:42  
So if someone wanted to borrow money, they would borrow it in the form of what's called a non recourse loan. Non recourse loan, that's the term, exactly. So you know, Tracy, if you're being that you're in the mortgage business, you're going to make a loan to someone, and you're going to need to ask for a personal guarantee. If it's a conforming loan. In my experience, you need a personal guarantee from the borrower. Well, with a self directed IRA, under the laws, you can't sign a personal guarantee on behalf of your IRA. If you borrow money, you have to borrow it from a non recourse lender, and that lender, essentially is of the understanding that in the event of a default, the only recourse is against that subject property. They can't go after the account holder through a deficiency judgment. They can't take any of their other assets. They can only take that subject property. We do find that lending to IRAs is more of the rare than it is the common. Most people actually fund real estate purchases 100% as a cash buyer, or they'll partner their IRA money with their non IRA money, or maybe a spouse's IRA with with another spouse's IRA, or IRA with another family members IRA, or even just IRA with a non related party. So we see a lot of partnerships and then a lot of 100% outright purchases. The other reason why we see that is because there's a little known tax called unrelated business income tax when an IRA is in a debt finance real estate acquisition. And so that's why Kate and Scott structure the deal as a joint venture, instead of Kate's Ira loaning money to Scott's IRA, their real estate attorney, who's been to our seminars and conferences, learned about this. He went out and did the due diligence from a tax perspective, and then he recommended to the clients as structured as a real estate joint venture, so that they could mitigate the probability of that unrelated business income tax occurring.

Tracy Hayes  33:38  
You have, obviously, a plethora of knowledge, and we could go on all day. We have to go. We can't put one of your seminars up, but we need to lead them to them. So I know you, I know there's a lot on YouTube. Where do they want to search? Is our equity trust? YouTube page is just as simple as that is, where a lot of these seminars are at. A lot of your teachings, yeah.

John Bowen  34:00  
So YouTube is a great resource that we have out there, public facing for anyone that wants to consume that content, other quick videos on a variety of different topics. For those that you know want to dedicate 3045, an hour, hour and a half and attend a virtual class from the Comforter of your own home. I would encourage folks to do that, spend an hour and 45 minutes in one of our what we call mastery classes, and it will get you 90% of the way there, and then the remaining 10% we can have a one on one discussion with my team and you, so that way that you can understand the nuances that are specific to your situation. How to do that? One can go to a website called Ira events, calm so make it real simple for everyone here. I ra events.com when you go to that web page, you'll see all of our live trainings. We actually have one coming up tomorrow, which is September 8. So at the time of recording this, it's September 7. So September 8. In the evening, we have our next event. But we do these twice a month, and all of our on demand trainings are on that website as well. So again, that's Ira events. Calm.

Tracy Hayes  35:15  
Anyone who wants to go in there and dabble in and and, I mean, there's so many things that are just, I mean, so high level. I mean, I listen to other podcasts, you know, bigger pockets podcasts. And you wonder, like, how do these guys put this stuff together? Is they, they pull knowledge from people like John, who was out there, and this is what he does. And, you know, the matching of the two IRAs who would have normally thought about that, right? But obviously, this lawyer who went to one of your seminars and had a had a bit of knowledge. He probably went back and brushed up his knowledge before he sat down with Scott and Kate on that transaction. Just amazing the amount of things you can do. And to many of my listeners here in Northeast Florida, around the country right now, there's a lot of people, obviously, real estate is hot. What is your IRA doing? Or, like you said, the lot of the real estate agents that are out there, the Give me that name and get you the 401 K Roth

John Bowen  36:12  
solo 401, K, solo four, Roth component. But the Roth component with a Roth component in, you got to be careful, because not every financial institution is going to allow you to self direct that into real estate, just like an IRA. Most financial institutions, your big wire houses, your big brokers, you open up an IRA or 401, K solo 401, K with them, and they're going to limit you to only mutual funds. Maybe the closest you're going to get to real estate is like a publicly traded REIT real estate investment trust. But if you want to own real estate directly with your IRA, I call these private direct investments. You want to own hard assets, you've got to work with an actual alternative asset custodian, like equity trust, right?

Tracy Hayes  36:57  
I found, you know, when I actually, I was sitting down right before I actually made my first call to equity trust, I was intercepted by just a local actually, they represented one of the larger finance investment firms, and I asked them about that, and they're like, oh, I don't know. I don't think they do that. And it's amazing. We like to think those people know everything, but they don't, and you kind of have to go out there and realize that just because he's your neighbor doesn't mean he knows everything you need to investigate. And this stuff is out there because I was told it wasn't until I ran into, you know, I had heard about it in the past. And then I actually ran into an alumni brother of mine who does it, Jonathan, here locally, flipping houses. And he, of course, led me there. I'm like, Yeah, I need to talk to them in, you know, move my rollover as my wife and I, you know, dug deeper into real estate. We now have five units, two of them with my IRA and three of them. We have, you know, just personal financing on there, and you probably will continue to grow as we see opportunities from that standpoint. But John, I appreciate you coming on today. I'm going to put all you guys sent me a lot of links here. I'm going to put that the IRA events calm. That's going to be in the show notes and so forth. So those listening to the audio version, you can look at the show notes. Those links are there. But equity trust is a simple in there in Ohio, just simply Google them, YouTube, and a lot of the information is there. I appreciate your time today. Yeah.

John Bowen  38:28  
Thank you, Tracy, thanks for your business. Of course, as an equity trust client. Thanks for allowing me to share this information, education. Hopefully it was valuable, just kind of hitting the tip of the iceberg here, obviously the possibilities. What I tell folks is, with our videos and trainings and things like that, I try to present a lot of case studies and real client examples for people to learn from. And we really operate in a, I'll call it non salesy approach, so we don't sell investments. We don't manage portfolios here. So when you talk with me, or you talk with a member of our team, we're here to provide information and education only because we don't give advice. And then just allow you, allow you as the investor, to really make the right financial decision that makes sense for you and your family. You know, if it doesn't make sense, it doesn't make sense, in my experience, for those that are already involved in real estate or want to be involved in real estate, it makes a ton of sense. And that doesn't mean that every deal you're going to do through your IRA. I always let people know when I do these, these sessions, that you know I'm not suggesting you do every deal through your IRA. For my wife and I, we're building a portfolio within our taxable accounts. So we're buying real estate with bank loans over here, and then over here, we're doing 100% cash deals with our IRA, and not every rental property we find makes sense for our Ira right now, I'm looking at a property based on the cash flow. I'm thinking, Ah. Not a good deal for my IRA, but a really good deal for my taxable side. Over here, I'll take advantage of the depreciation the bank the rent will basically pay off the bank note in 15 years, and I'll own a property free and clear, and then the next deal I might find might make complete sense for my IRA. So it's just a matter of balancing your taxable portfolio and your non taxable portfolio, but so many investors, I find Tracy fail to consider that non taxable portfolio until it's too late. They wait until they're in their 50s or 60s before they start focusing on that the time to focus is right now. And for those that are in their 50s or 60s, I work with plenty of individuals that start really late in life, and it might not mean that they're going to save for their own retirement, but maybe it means they want to leave a legacy to their children or grandchildren, avoid probate, leave tax free profit and income to their to their estate, to their family, to their children. So whatever that case may be, we're obviously here to help again. Tracy, really appreciate the time today.

Tracy Hayes  41:00  
Well, I want to end because this with this question here, and I think there's probably a lot of listeners out there. And just to inform people, when you sell that property that's in your your self directed real estate, Ira, the proceeds go back to the IRA. So I just to conclude with that, as we sold the property, it's the end of the show. But I know that's a question a lot of people ask. The proceeds will go to the IRA. You don't, you don't walk away with a check with that, that check, well, I mean, it's, it's your IRA, but that's where it's going to go. And then the legalities exactly invested in buy another property. Certainly can do that with it and keep, keep moving forward.

John Bowen  41:41  
There you want. You're right, Tracy, you want that money to go back to the IRA, because if you take that money, you're going to pay taxes and a penalty if you're under a certain age. I refer to the IRA as it's, it's, it's considered a bubble wrap, right? You got bubble of wrap around this IRA, and if you start taking money out. You pierce that bubble wrap, and what that means is the IRS can then come in and start taxing you and potentially penalizing you. So you just want to keep everything within that ecosystem that IRA money just moving in and out, so that way you can take advantage of the tax privileges.

Tracy Hayes  42:18  
So in conclusion, get on there. Educate yourself on John's team at equity trust, they're there to consult you. If you have something you can't find it in the YouTubes or obviously is monthly webinars are all there. I appreciate it, John. Thank you. Tracy, thank you, sir. Thanks.