Q1 2014 Real Estate Investor Report 2014 The Entrust Group, Inc. All Rights Reserved 1
Table of Contents Habits of Real Estate IRA Investors Nationwide 3 States Where Clients Invested in Real Estate 4 Top 10 Locations Where Clients Invested in Real Estate 5 Most Popular Plan Types Investing in Real Estate 6 Top 3 Plans Investing in Real Estate 7 Popular Real Estate Types in IRAs 11 Real Estate Investment Price 15 Real Estate IRA Center 16 2
Habits of Real Estate IRA Investors Nationwide 2014 Q1 As the pioneer administrator of alternative investments in retirement plans, The Entrust Group has a unique view into the habits of self-directed IRA investors nationwide. What we ve found is that self-directed real estate retirement investments have increased drastically in the previous two years. In this report we take a closer look into the habits of our clients with real estate IRAs self-directed IRAs that hold real estate during Quarter 1 of 2014. What we inferred from the data told us that real estate continues to be the asset of choice in self-directed IRA account holders. The data shows that the types of real estate invested in single-family homes, multi-family residences, commercial property or vacant land largely correlates on what kind of IRA investors hold (Traditional, SEP, or Roth being the most common). 3
States Where Clients Invested in Real Estate OR NY IN WA ID MO LA MD AZ MS IL GA HI NV NC DC MI FL TX AL CA 1.51% 1.51% 1.51% 1.51% 1.51% 1.51% 1.51% 1.51% 3.03% 3.03% 3.03% 3.03% 3.03% 3.03% 3.03% 4.54% 4.54% 6.06% 6.06% 6.06% 39.39% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 4
Top 10 Locations Where Clients Invested in Real Estate Generally speaking, California accounted for the clear majority of real estate investments, with 39 percent. But 21 states were represented on the list, with a heavy concentration on the Sunbelt states, the West and the Midwest. The next largest investment locations were Alabama, Florida, and Texas. 5
Most Popular Plan Types Investing in Real Estate 70.00% 60.00% 65.06% 50.00% 40.00% 30.00% 20.00% 10.00% 18.07% 15.66% 0.00% Traditional IRA SEP IRA Roth IRA The majority of clients investing in real estate hold Traditional IRA plans (65 percent), followed by SEP IRA (18 percent), and Roth IRA (15.7 percent). 6
Top 3 Plan Investing in Real Estate The locations in which account holders invested are much more varied than where they lived. Some focused on buying locally, but 34.3 percent of total clients invested in property outside their residing state. 34% of Real Estate IRA investors invested outside of their residing state. 7
Where Traditional IRA Owners Invested A majority (39.5 percent) invested in California real estate. Other 18% Florida and Alabama were distant runners-up, at 9.3 percent. Five other states Mississippi, Nevada, Illinois, Georgia, North Carolina each held a 4.65- percent share of investments. MS 5% IL 5% GA 5% NV 5% NC 5% FL 9% AL 9% CA 39% 8
Where Roth IRA Owners Invested MI MI- 8% DC D.C.- 8% AZ TX CA TX- 8% AZ- 15% CA- 23% California- 23% Arizona- 15% Washington- 15% District of Columbia- 8% Hawaii- 8% Michigan- 8% Texas- 8% HI HI- 8% WA WA-15% 0% 5% 10% 15% 20% 25% 9
Where SEP Account Owners Invested IN- 7.69% AZ- 7.69% MI- 7.69% D.C.- 15.38% CA- 46.15% TX- 15.38% 10
Popular Real Estate Types in IRAs We found that segmenting IRA account type yielded interesting results. While the majority of all three types (Traditional IRA, SEP IRA, and Roth IRA) were investing foremost in single-family housing; multifamily housing, commercial property and vacant land were highly variable. Vacant land appeared to be more popular with Roth (27.3 percent) and Traditional IRAs (33.3 percent), while multifamily property was highly favored by SEP IRA holders (46.2 percent). 11
Traditional IRA Real Estate Types 46.67 % 33.33% 17.78 % 2.22% 12
Roth IRA Real Estate Types 45.46% 27.27% 27.27% 0% 13
SEP IRA Real Estate Types 46.15% 7.69% 46.15% 0% 14
Real Estate Investment Price $200k-$300k 16.41% $300k-$400k 7.46% $400k+ 4.47% Less than $100k 47.76% Nationwide, most (47.8 percent) self-directed IRA real estate investors were spending less than $100,000 on each investment, while the average investment was priced at $154,851. $100-$200k 23.88% 15
Real Estate IRA Center To find out more about the importance of diversifying your retirement account with real estate, visit the Entrust Real Estate IRA Center. For more than 30 years, The Entrust Group has provided account administration services for self-directed retirement and tax-advantaged plans. Entrust can assist you in purchasing alternative investments with your retirement funds, and administer the buying and selling of assets that are typically unavailable through banks and brokerage firms. These assets include residential and commercial real estate, secured and unsecured notes, limited liability corporations, precious metals, mortgages and more. Entrust does not promote any investments. Rather, Entrust provides the administration, information, and tools to make self-direction straightforward and compliant. We help you get started quickly and stay with you every step of the way. www.theentrustgroup.com/realestate 16