Real Estate Info Packet

Transcription

1 Real Estate Info Packet Dear Investor, Thank you for your interest in a CamaPlan for your self-directed investment needs. If you are someone looking to take control of your financial future and invest in alternative assets, such as real estate, then you ve come to the right place. With the current condition of the stock market, real estate continues to be one of the most popular alternative investment choices. Whether you are interested in purchasing a single family home, apartment complex, or raw land for development purposes, the options are endless with a CamaPlan Real Estate IRA. To help you get started, we have included some helpful documents in this Welcome Packet. For the sake of balance, and because we always want our clients to make smart decisions, we included a brief Top Reasons NOT to invest in Real Estate with your IRA article. Read this first. Then, we compiled our Top 10 Reasons to Buy Real Estate in Your IRA, as well as a How It Works overview. Here, we outline what the real estate investment process with a self-directed IRA entails; from acquiring the property, to securing the proper financing and titling, to paying monthly expenses we ll lay it all on the line for you. Finally, we included a Case Study that may remind you about the importance of diversification. After you look over the information, it is our hope that you will have a better idea if investing in real estate is the right fit for you. CamaPlan believes that it's best to educate yourself about the various real estate markets that interest you. It is also important to understand which types of transactions are allowed and which are prohibited. The educational information provided by Cama Academy makes it easy to perform the proper due diligence. Please visit our page at to learn more. Interested in scheduling a free consultation ($90 value) with one of our knowledgeable team members? Please call , or send an to info@camaplan.com and someone will be in touch with you shortly. We look forward to serving your investment needs in the future! Sincerely, The CamaPlan Team info@camaplan.com

2 Top 5 Reasons NOT to Use your IRA to Invest in Real Estate (Ignore at your own risk) Here at CamaPlan, thousands of our clients invest in real estate using their self-directed IRAs. However, this form of investing isn t for everyone. Like any investment option, real estate has its own set of risks and rewards, so with that thought in mind, here are some things to consider: Reason #1: Buy What You Know Do not use your CamaPlan IRA to buy real estate if you have no experience in the real estate market. Why not? Simply put, it s always best to invest in what you know and understand. It is true that real estate has been an excellent investment for many people; however, inexperienced investors are more prone to making costly mistakes. If you have never bought an investment property, it is generally not prudent to use your IRA for your first purchase. Very few people hit a homerun the first time up at bat. Reason #2: Go With the Best Yield Do not use your CamaPlan IRA to buy real estate If you have another investment you know and understand that pays a higher rate of return. Your IRA should be used for your best investments to gain the most tax-advantaged savings from the investment earnings. Remember to account for operating income plus appreciation, plus pay down of loan principal when you calculate yield. Don t forget the time factor when choosing between investment options: although returns may be more predictable with real estate, it is definitely more work to manage real estate than to hold precious metals, stocks or bonds. Reason #3: Consider the Big Picture of Taxation Do not use your CamaPlan IRA to buy real estate If the depreciation will give you a significant savings with your earned income, i.e. by investing outside your IRA. Property outside an IRA can provide some excellent tax savings for individuals on a smaller budget who need additional income to supplement their daily expenses. Real estate can afford this through the use of depreciation until you are able to begin savings and planning for future financial independence. Reason #4: Are You Ready for Self-Direction? Do not use your CamaPlan IRA to buy real estate if you do not have the time to invest in your financial future. Self-direction works best when you commit your time, expertise, and enjoy the process of lifetime learning and adjustment to market conditions. Otherwise, it may be best to hand over your hard earned money to a financial advisor and hope he/she will create a financially secure future for you. The bottom line is that self-directed IRAs are best for those investors who enjoy working their own money. **Note: we invite you to utilize the resources at the Cama Academy to get educated about real estate investing. Here are a few of our most popular webinars, all accessible at Secure Your Financial Future: How Real Estate Can Create Wealth - Brian Adams Investing in Pittsburgh Real Estate - Brad Sommer & Bonnie Wisniewski 1031 Exchanges - Steve Venuti Why Apartments? Why Now? - Brian Adams

3 Reason #5: Need Liquidity? This may be obvious, but do not use your CamaPlan IRA to buy real estate if you need your account liquid. Real estate takes time to be liquidated at fair market value, and if you find yourself needing to liquidate quickly, the chances are greater you will get below market value at the sale. Gold or silver or stocks and bonds may provide more liquidity. Note: very few of our clients are concerned about short-term liquidity since they understand that their IRA is primarily intended as a vehicle for longer-term investing, but it s still something to consider, especially if you are new to self-direction. Conclusion We hope these points prove helpful as you consider whether to invest in real estate in your IRA. As we said, this form of investing is popular and widely practiced, but you still need to determine if it is right for you. Interested in scheduling a free consultation ($90 value) with one of our knowledgeable team members to discuss your real estate investing needs? Please call , or send an to info@camaplan.com, and someone will be in touch with you shortly.

4 Top 10 Reasons to Invest in Real Estate in Your IRA Reason #1: Asset protection In our litigious society, doesn t it make sense to protect yourself? In many cases, investment properties owned by IRAs are better protected than properties owned by an individual. (Call us if you would like to learn more about using your IRA for asset protection.) Reason #2: Flexibility You may have greater ability to access cash, especially if you do not qualify for a traditional loan or do not have money saved for a down payment. You IRA does not have to come up with all of the money it can partner with yourself or someone else. You can also obtain a non-recourse loan. Reason #3: Tax-free profit and income for life (in a Roth account) Plus, you get tax-free profit and income for life for generations to come! (again, with a Roth account) If you invest with your Roth IRA, all the income and capital gains for your real estate purchase are tax-free. And of course you can reap the benefits of appreciation in tax-deferred (Traditional IRA) or tax-free (Roth IRA) environment. Reason #4: True diversification Real estate allows you to diversify your retirement portfolio and step away from the stock market plus, it is a tangible asset that you control. Reason #5: Cash flow Income from a rental property bought with a self-directed IRA flows back into the retirement account and can provide steady cash flow for the purchase of other investments. Reason #6: Avoid or reduce capital gains tax You have the ability to flip real estate without paying a capital gains tax. Reason #7: Wide range of options You can use your knowledge of real estate to purchase many different types of properties single family homes, apartment complexes, retail or office spaces, warehouses, vacation rentals and raw land. The options are endless! Reason #8: Inflation hedge The value of real estate, like gold, often increases in an inflationary environment. As the dollar continues to be de-valued, there is no better time to purchase real estate for your long-term investment needs!

5 Reason #9: Leverage Real estate is commonly considered the asset best suited for easy leveraging, which can increase your ROI. Reason #10: Planning to retire at the beach? Once the property is in the IRA, you are free to sell, with the proceeds returning to the IRA without any tax liability. These proceeds can then be used to purchase different property. Once you reach age 59 ½, the IRA-owned property can be distributed to you. **Note: we invite you to utilize the resources at the Cama Academy to get educated about real estate investing. Here are a few of our most popular webinars, all accessible at Secure Your Financial Future: How Real Estate Can Create Wealth - Brian Adams Investing in Pittsburgh Real Estate - Brad Sommer & Bonnie Wisniewski 1031 Exchanges - Steve Venuti Why Apartments? Why Now? - Brian Adams CamaPlan believes that it's best to educate yourself about the various real estate markets that interest you. It is also important to understand which types of transactions are allowed and which are prohibited. The educational information provided by Cama Academy makes it easy to perform the proper due diligence. Please visit our page at to learn more. Interested in scheduling a free consultation ($90 value) with one of our knowledgeable team members? Please call , or send an to info@camaplan.com and someone will be in touch with you shortly.

6 How to Diversify Your SDIRA with Real Estate How It Works Open an account today! Call an Account Specialist at

7 Real Estate Investing Case Study: Mary s story: Two for the Price of One Mary was a student in the Real Estate Riches program in Philadelphia in early 8 as the real estate market bubble was beginning to burst. As she saw real estate prices declining, she decided to move her IRA from the stock market to CamaPlan, so she would be ready to purchase an investment property. She sold her stock and transferred the proceeds to her CamaPlan IRA account. She incurred no penalties or taxes, and CamaPlan took care of the necessary recordkeeping and made the process simple. As real estate prices continued to fall, she could not find a deal right away. When the stock market crashed in October, she was relieved to know that her hard-earned cash was safe in her FDIC-insured account with Cama she had incurred no loses due to the market problems. In addition, she was not paying an annual maintenance fee for her Cama account. As a rule, Cama will never charge fees for cash-only accounts. We want to emphasize the importance of performing the proper due diligence before making any investment decisions. Mary continued to educate herself and use her Real Estate Riches program training. Before long, she was able to locate two positive cash-flowing real estate investments. At one of the RER follow-up meetings, she thanked Carl Fischer personally for being there and shared with the group that the only reason she was able to buy two investments was because she had not lost money in the 8-9 stock market meltdown. She felt as if she had gotten two investments for the price of one. She admitted she was lucky with the timing, but without the CamaPlan educational information she received, she may not have been ready to invest when the great deals did come her way. Remember, your CamaPlan account can purchase almost anything from real estate, to precious metals, to tax liens and mortgages. The IRS clearly identifies which investments are prohibited, so take care to familiarize yourself with the list (it is short!) Take control of your financial future and use your knowledge and expertise when choosing your investments. If you are not sure of what to invest in right away, spend some time in our Academy take a class, listen to a webinar, and talk with like-minded investors to get ideas flowing. **Remember: your CamaPlan account can purchase almost anything except the small list of items identified by the IRS. Take control of your financial future and use your knowledge and expertise when choosing your investments. Not sure what to invest in? Search the CamaPlan.com site for ideas. You can also take advantage of the free CamaPlan educational webinar archive in the online CamaAcademy. Interested in scheduling a free consultation ($90 value) with one of our knowledgeable team members to discuss your real estate investing needs? Please call , or send an to info@camaplan.com, and someone will be in touch with you shortly.