Archive for August, 2014

Retire With A Second Home

Thursday, August 28th, 2014

Retirement Dream

What do you want for your retirement? What type of things do you plan on doing? Where do you plan on living? Do you want to go on vacations? There are so many things you can dream about when it comes to your retirement. For most of us though we want the best retirement that we can possibly have. There is a lot that has to happen for many of us to get to that spot where we feel very comfortable about our retirement. I for one know I need to continue to save and I need to continue to check my retirement plan to make sure it is where it needs to be for my current situation. I know that my life is still young enough that in ten years my retirement needs will more than likely be quite different than today and that is why continued retirement plan checkup is important. While I save and push hard to the best retirement I can have what am I really saving for? What do I want out of my retirement? What is my dream retirement?

I feel like my dream retirement is very reasonable and attainable as long as I work at it. So what is my retirement dream? My dream is to be able to have a second home somewhere I love to vacation. Somewhere whenever I arrive I just feel happy, excited and somewhere that re-energizes me. I want to be able to use this second home not just as a place I can vacation at whenever I want but actually live there half of the year.  

Is this crazy? It may sound crazy but one thing I realize is that with a little pain today I can attain those goals I want down the road. If I put off saving or making the appropriate sacrifices today then every year that passes my ability to create that dream becomes much less possible.

A perfect example is buying a new car. I don't need one, but I really would love one. My car has roughly 140,000 miles. It hasn't broken down yet nor does it constantly need repairs. So while I may have the cash to buy a new car I am not going to because it isn't a need yet. I am going to save that money, invest that money and do the things today that make the difference down the road. Trust me one of the biggest things I see today is that many people need instant gratification. With that people have a hard time saving ANY money. The point I am trying to make is simple, would you rather have a new computer today or a new car in 10 years. A new car today or another home in 10 years? Hopefully my point makes sense.

So beyond saving and sacrificing today what else can be done to ensure I have a second home by the time I retire? The smartest thing that I can do beyond sacrificing and saving is to use my retirement account to actually buy that second home. This is commonly refereed to as a real estate IRA. Basically your IRA instead of investing in stocks and bonds is invested in real estate (my second home for retirement). Now, there are some rules that make investing in real estate with your IRA a little annoying and that you must be aware of as to not avoid your real estate IRA. For example, while your IRA owns the real estate (again my second home I will use when retired) you cannot live in it, nor anyone in your family. Here are some of the rules you must know, A Real Estate IRA Allows You to Invest in Real Estate Through an IRA

Why should you use your retirement account? One, because you probably have money saved in this account and because it is smart to diversify outside of stocks and bongs. Now probablyl the biggest reason to use your IRA or 401k to purchase real estate is because you get the tax benefits that come with an IRA or 401k. If you would like to know all of the tax benefits that come from buying real estate through a retirement account feel free to contact us.

Once you have purchased that real estate inside of your IRA what should you do with it? We have just the advice for you. Read Maximizing Your Real Estate IRA to find out about the rules and how to get the most from your real estate IRA. Also, arguably the best thing you can do with your real estate IRA is to rent it out. Check out, Position Your Rental In Your Real Estate IRA To Stay Competitive.



Tuesday, August 26th, 2014


This document provides guidance on how to set up property management agreements for a property owned by a self-directed IRA account.

1. Document Titling – The agreement should be between the property management company (“The Company”), and American Estate & Trust FBO . Please note that it must not be in your personal name.

1.1. The titling on the signature block should read as: “As Account Holder”.

1.2. If the signature block is not prefilled, then you should fill in the titling as described above.

2. Document Signing – As the account holder you can sign the property management agreement on the signature line.

42-155347083. Items that cannot be contained in the agreement:

3.1. Personal guarantees – This would be any type of language where you, as the account holder, are making a guarantee that you will be personally liable or responsible for any debts or obligations. The IRA can be required to meets its own obligations but you cannot personally extend credit, collateral or financial guarantees that benefit your IRA account or its investments.

3.2. Power of Attorney – This would be any type of language where you attempt to assign a power of attorney for the IRA account over to the property management company. The Company can manage the IRA’s property but cannot have any control or discretion over the IRA itself.

3.3. Power to sue or litigate – This would be any language that allows The Company to sue on the account’s behalf.

4. Transmittal of the executed document – Upon completing and both parties signing the document, you will need to provide a copy to us.

5. Payment of expenses – Fees and expenses can be paid from the IRA to the property management company provided that we have a valid Direction of Investment form, a copy of an invoice for the expense(s), and a copy of the completed property management agreement on file. You cannot pay IRA expenses, including property management fees, using your own personal funds. IRA expenses must be paid by the IRA, so be sure to leave sufficient cash in your account for future expenses.

6. Establishment of a petty cash account with the property manager – This can be accomplished by providing an invoice from the property manager, a valid Direction of Investment, and a copy of the completed property management agreement. The agreement should provide for periodic accounting of the petty cash.

7. What If The Company Will Not Allow You To Sign – In any cases where the property manager will not allow you to sign, you have two options:

7.1. Send the document to us with an Authorization to Execute form and we will sign, but only as your duly authorized agent, meaning you and your IRA will still maintain all rights and obligations with respect to the agreement. We will not have any rights or incur any obligations from signing the agreement on your behalf.

7.2. Inform The Company that it is your account, and that you have legal ownership and all rights and control over the account, much in the same way as you do over your checking account. Therefore, you have the legal capacity to enter into an agreement to hire someone to provide services for your IRA account.


8. What Not To Do:

8.1. Do not personally pay any fees or expenses, or personally guarantee your IRA’s debts or expenses, or personally receive any income earned by your IRA’s property. All income and expenses must flow to and from the IRA.

8.2. Do not hold property in one IRA and use another IRA to pay the property’s expenses or deposit its rental income. The IRA holding the property should pay its own expenses and collect its own income.

8.3. Do not hire a property manager that is directly related to you. The following persons or entities are not allowed:

8.3.1. You

8.3.2. Your spouseHappy family of five together at home

8.3.3. Your children and their spouses

8.3.4. Your grandchildren and their spouses

8.3.5. Your parents

8.3.6. Your grandparents

8.3.7. Any business or other entity (LLC, trust, etc.) that you own or control

8.3.8. Any business or other entity (LLC, trust, etc.) that the above parties own or control

8.3.9. Any business partner

8.3.10. Anyone whose relationship to you could lead to a potential conflict of interest or may affect your judgment in doing what is best for your IRA (sibling, significant other, best friend, etc.)

8.4. Do not forget to send us a copy of the fully executed agreement.

8.5. Do not assume anything. Call us before making decisions. We cannot provide legal, tax or other professional advice but we may be able to point out potential red flags that you can address with your chosen advisors, if needed, to prevent possible disqualification of your IRA.

©American Estate & Trust, LC – 2014

Jaclyn M. Grella
2. Document Signing – As the account holder you can sign the property management agreement on the signature line.


Tuesday, August 26th, 2014

It’s no secret that the Dallas / Fort Worth area is a playground for investors, so we went looking for a qualified professional to give you some much needed information.  In this article, you will meet Robyn Bullard of Red Phone Real Estate.  Robyn has over 30 years real estate experience and is not only a real estate investor, but a real estate broker and certified property manager as well.  Here is our interview with Robyn:

Tell us a little about your company.

I am a native Texan, and have worked in several areas of real estate for over 30 years.  All of my experience is in the Dallas/Fort Worth area.  I began years ago as an investor.  In the last 8 years, I decided to formally study real estate, got my license, then my Broker’s license.  I own my company and am also a Texas Certified Property Manager.  I have a small firm and am very hands on.  I know all my renters and owners.  They all have my personal cell, and I treat their homes as if they were my own.  I have very little turnover rate, as happy renters tend to stay, which is a savings for the owners.

Tell us some stats about you or your company.

I close an average of 5 million per year.  I am blessed to pick which people I work with, and it’s very important to me that we are like minded.  My average close on a listing is 30 days – from contract to close – however, my lender can get them done in 14 days.  In the Metroplex, homes are selling within an hour of being listed.  My average price is 250 – 500,000.  I have done deals that are 100,000 and well over 1 million.  My goal is to close 4 per month minimum without adding additional staff to slow the process.  Most all my transactions are residential, however I have closed land and multifamily.  My management company is strictly residential – from Burleson to McKinney – and Gun Barrel to Aledo.

Do you work solo, or are you part of a team?  Why is that beneficial?

I work solo.  I have agents working for me in case I need help, but I like handling my own business.  I want my clients to know they are well taken care of and I personally am working for them, not passing them off.  I have also worked with some very high profile clients where signing “non-disclosure” was necessary.  I can be very discrete when working without other eyes and ears.

How is your company different from others?

It’s not about the money – it’s about the client.

Are you and/or your company on any social media sites?

Many – Zillow, Trulia, Realtor, Pintrest, Facebook. Etc….

Robyn Bullard in white & red hands on hips

Do you have a blog or newsletter to keep clients informed?  What type of information is typically in your newsletter/blog?

No, I write for a couple of publications, so that’s all the time I have.  I personally do emails to my contact list to stay in touch, or pass along vital info.

What designations do you hold?

Right now – Texas Certified Residential Property Manager, and Texas Certified Leasing specialist.  I am working on GRI, Senior Specialist and others.  I think you can never learn enough about your business.

Is your company a family-owned business, part of a franchise, small business, etc?  Why is this beneficial?

I am a corporation just for my landlord’s protection and my agent’s.  However, I believe my small company feels like concierge real estate services.

What is your business philosophy?

Take care of your clients, and the rest takes care of itself.

What associations do you belong to?

NARPM, TAR, Metrotex

Tell us about your service area:

South – Burleson

North – Denton

East – Gun Barrel City

West – Aledo/Weatherford

What types of properties are being rented more frequently (commercial, residential)?

I only handle residential – and it’s booming!

What are the residential vacancy rates?

Almost non existent.  Rentals – like sales – are being fought over.  As long as they are priced right and in a decent area – they rent in just days.

What kinds of amenities attract renters?

Clean, fresh, non-smoking, allowing small pets, 2 car garage.

What is the average length of time it takes to rent a vacant property?

1 week

What is the average rent?

From  $0.72 to $1.10 per sq. ft.

What type of marketing do you do when listing a property for rent?

MLS, professional photos, and various rental sites that rank #1 on google searches.

Do you perform regular properties inspections?  What do you inspect?  Do you take pictures?  Do you send the pics to the IRA account holder?

I have a new program called snap inspect.  I have to say it’s fairly new, and I began using it in my own HOA.  So far I really like it.  There is huge controversy over whether a manager should/should not do inspections.  They tend to offend the renter, and they sometimes leave as they feel violated.  My goal is to keep them full and producing.  Turnover is never good for an owner.  And, if we do inspect, and find anything we cannot force any action as they must leave the home the way they found it – and they are not “gone” yet.  It would be like arresting a shoplifter before they leave the store. If I sometimes do if I feel something is odd.  I use the excuse that it’s renewal time and we have new codes to make sure the property is performing and up to code.  That usually works.  My renters have all been in their homes for years.  At least 3 and some 8.

What insurance is required?  What additional insurance do you recommend?  Do you work with an insurance agent?

The owner is required to have insurance that covers the dwelling, and me as an additional insured so I can handle issues if necessary.  The renters are required to carry renters insurance for their contents.  I have several agent references.

What is your tenant screening process?  How detailed is it?

I run a very thorough background search to include tenant rental history, criminal history, and credit history.  I am very conservative in who I rent to.  Again, as if it was mine.

What is the eviction process?  Do you have experience evicting tenants?

Sadly, yes, I have experience.  But, not with my tenants.  I have self-managed owners call me often (I am actually doing one right now) that have lost control of their rentals and cannot get the renter to pay or leave.  The process is specific in Texas – 3 day notice to pay, 10 day notice to vacate.  The courts are a bit stacked up, so it can take up to 3 weeks.  However, there are so many alternatives to this process.

I tend to know my renters well enough where they call me if they are going to be late or are in trouble financially.  Then we work out a solution.  I do not like to do this to anyone, and hate spending the money.  Most tenants just want to be heard and respected.

Robyn Bullard in white wagging fingerHow do you handle a difficult tenant?

1. You can usually tell if someone is difficult, and I don’t rent to them.

2. Carefully – and give them lots of attention – so they know I am paying attention.

3. We go by the lease – period.  That often takes care of things!

An example of this happens when someone comes from apartment living to a single family.  They are used to a staff waiting to get a maintenance call.  There is an adjustment period for them.  I have a handyman answer them right away – then they adjust.

What is the procedure if a tenant does not pay rent?

Day 3 – letter of default and notice to cure

Day 10 – letter to vacate

However, again, this is the legal path.  I prefer to call/text/email and just ask if they are okay.  This usually gets a quick response and I try to work through it before it gets ugly.

How often do you provide accurate financial statements? Monthly

How do you help with client determine how much rent should be charged?

I run rental comps no more than 60 days old, and no more than ½ mile from site.

How should the property be prepared for renting?

Fresh is best!  I find that a home will attract the renter that looks like the home.  If the home is not maintained, then the renter will not take care of it.  It should be clean, neat, and free of damage or non-working items.  I have an inspection list to work through when someone starts.

How long does it take to process an application?  How is it processed?

1 day – if all the phone numbers are correct.  I do them personally and have a service that I subscribe to that provides all the information.  Then I make calls to verify all the info.  I am strict on the application being legible and complete.  Also know, that I follow Texas law and cannot forward those to any owners.  I do provide basic info and like when someone helps make that decision to rent.

Because I am an individual, I do have an agreement with another Broker – many many years of experience – that will step in if anything happens to me.  This is vital for a small firm.


How do you find service providers?  Is it the client’s responsibility to find providers?

It the service is caused by the renter – they must do the repair.

If the house just has something fail because of age, then I have licensed professionals do the work and take the money from rent next month.  However, the owner is ALWAYS informed of any upcoming repairs.  I like to have them signed off on before I hire a subcontractor.

What are you looking for during an initial inspection of the property?

I have a specific list I can provide.  Mostly safety and health issues.  As well as any conditions that would prevent fast rental or failing to get good quality renters.

Do you recommend seasonal maintenance to the client?  Do you have vendors to help with the maintenance?

I have a couple of recommendations.  I like when my owners buy Home Warranty.  It can prevent big surprises like hot water heaters or air conditioners.  It helps keep expenses predictable.  I do have vendors – but if we use home warranty companies  – they provide the licensed, insured professional to do the work.

How are clients informed when a repair needs to be quoted or done?

Email, call or text.  Whatever you prefer.  Most of my clients or managers, I know well enough to call and follow with email.

How do you handle an after-hours emergency?

I have a handyman ready to do whatever we need….however, there are few things that must be done in the middle of the night.

Please share some of your client’s testimonials.

I have not asked for testimonials.  However, I have a lovely set of responses on Zillow from my clients that will tell you who I am and how they feel working with me.

Do you have references potential clients can call? Absolutely.

Why do you recommend using a professional management company versus self-managing a property?

I don’t even know where to start this one.

For me, it’s business.  For them it’s personal.  Being removed from the home is freedom according to my owners.  They want to take their time to buy and sell other properties, not calling on a broken toilet.

A professional company is much less likely to get into trouble legally than an owner.  With our documentation and record keeping, and knowledge of fair housing, the owner is so much safer.

What repairs or upgrades do you recommend to get the biggest “bang for your buck” before a property is rented out?

Paint and carpet.  Fresh kitchen and bathrooms.  But, pain and carpet/tile/faux wood are the 1st thing.

What improvements are not worth the time when renting a property?

Real wood floors, expensive tile bathrooms or entries,


Just a word – I do not adjust my pricing or policies for anyone.  My goal is win/win.  That’s between renter and owner.  I am held to a strict code of ethics, which include policies and procedures outlined by the State of Texas.  I want us to all make money and stay out of trouble!

Personally, I feel real estate can be a great investment.  If we have another 2007/2008, you still have something besides a piece of paper.  It may be worth a bit less, but you still have something!

Questions for Robyn:

Red Phone Real Estate

5700 Granite Parkway, Suite 200

Plano, Tx.  75024

[email protected]

Phone 469-324-9312

Questions for an IRA Specialist:

Jaclyn M. Grella

Investing Your Retirement In Your Startup

Monday, August 25th, 2014


Are you looking to start your own business and are wondering where to get the capital? I bet you never thought it was possible to invest your retirement into your own startup. This is very possible and it is done through what we call a mysop. This is done with a self directed 401k and through a C-Corp. If you are looking at this option or want more information please contact us today and our professionals will inform you and guide you on how to invest your retirement into your own startup.

If you already have set up your msyop account and are doing the best you can to make sure your startup succeeds we have some great tips to help you succeed as a startup. These tips come straight from one professional who knows how to take a startup and make it a very, very powerful company. You may have heard of this man as he is the owner of the Dallas Mavericks and goes by the name of Mark Cuban.

Mark Cubans 12 Tips For A Startup To Succeed

  1. Only start the company if it is something you are obsessive about and love.
  2. Exit strategies means that you aren't obsessed about it enough and probably shouldn't start it.
  3. Hire those who have a passion and love for your company.
  4. Sales cures all. If you can be good at something, strive to be good at sales. Make sure you know how your company actually makes money and then know how to actually make the sales.
  5. Know your core competencies and make sure they are simply great. When it comes to your core competencies make sure you strive to be the best at them. To be the best you have to have the best and you have to get the best. Outside your core competencies, hire people that fit your culture but aren't as expensive to pay.
  6. Do lunch. It gives you some time to actually get out and talk. If you and your team truly like your job you will find a way to work as much as possible. Lunch is another great way to talk work with the team without it being so worky.
  7. Get rid of the offices. Open offices keep everyone in tune with their surroundings and it helps to keep a high energy. Nothing should be private in a startup, except the bathroom. This is also a great way to stay clear of hiring exceutives who aren't completely about the success of the startup. If the person demands a corner office, to fly first class or a personal secretary, they aren't for you. If they won't go on sales calles, they aren't for you. You want someone that will help inspire the company not pollute it.
  8. Use what you know. It is important to take advantage of the technology that you know. If an employee is used to a Mac, get them a mac. If they are used to a Windows PC, get them a Windows PC.
  9. Keep it simple and flat. Managers in a startup aren't good. Managers reporting to managers will only push your startup to fail. If you get beyond the startup phase, if you have managers reporting to managers, it just creates politics.
  10. Don't buy swag. It isn't worth it. Only employees should be wearing swag. In general, nobody wants to wear your companies swag, especially if they don't even work there.
  11. Don't hire a PR firm. This can be done easily yourself. If you are obsessed about your startup then you will be obsessed about the culture. You are more than likely already reading the publications that you should be listed on. YOu are already watch the shows, podcasts or visit sites that you want to be listed on. Send them an email. They would rather be hearing from the founder instead of a PR worker.
  12. Make the job fun for all employees. Whatever you do make it a place that everyone wants to come and work at. If something big happens, celebrate it. Share the wealth, it does wonders to the workers. That could mean handing out $100 bills to salespeople when record sales are broken. Whatever you do make it fun and exciting for everyone.

These are some great tips from a great businessman. Your startup is going to be able to succeed much better if you follow these steps. Hopefully you are on this path already to creating the best company you could dream of. Maybe you aren't though and maybe you are stuck at trying to find how to fund your startup. Remember, you can do it through your retirement accounts. Let us show you how to invest your retirement account into your very own startup. It could change your life forever.


Want to Invest your IRA yourself? A Self-Directed IRA LLC is Right for you!

Thursday, August 21st, 2014


Have you ever thought that you could do better in the market by investing your IRA funds yourself rather than trusting your IRA funds to a financial advisor? This is a common problem and one that can be very justifiable. There are many times that financial advisors just don’t put in the same effort as if it were their own money. Sometimes they just don’t have your best interest at heart. Many times you are the best steward over your own retirement and your retirement accounts. If you have had this problem before why not start investing your IRA yourself? If you aren’t comfortable doing all of it why not invest some of your retirement yourself?

The best way to start investing your own retirement into things you want is through a self-directed IRA with checkbook control.

The process of setting up a self-directed IRA with checkbook control is very simple to do.

Including the following:

  • Setting up an IRA account.  This can be done online here
  • Completing a Transfer Request form that will be sent to your current custodian to request the funds.  This form will be emailed to you upon completion of the IRA account but can also be found here
  • Filling out an IRA LLC application.  This application can be emailed to you upon request
  • Once IRA funds have been receiving from your previous custodian you must fill out a direction form directing the IRA funds to be sent to the LLC.  Here is the link to the Direction Form
  • Once the Direction form is completed the funds can be wired to the LLC and you are free to choose the investment options of your choice

Once the IRA funds are in the LLC you are free to choose the investments of your choice. The most common investments that clients invest in through the IRA LLC are real estate, private placements, tax liens, trust deeds, loans, and other non-traditional investments.

Rules and limits

Keep in mind there are certain rules that apply to investing with self-directed IRAs. Prohibited transactions are one of the biggest things to be aware of when investing in your retirement account. Prohibited transactions apply to your investments inside of an IRA LLC as well. One of the biggest prohibited transactions that we see being abused is people trying to invest their IRA with related parties, also known as disqualified persons. A disqualified person includes you, your parents, and children, but in-laws are a gray area. To be safe I wouldn’t do any dealings with in-laws either. What this means is you or a related party cannot give or receive a benefit from your IRA LLC funds. All transactions need to involve nonrelated parties. Check out the following links for more information about prohibited transactions and disqualified persons.

If you have any more questions about the IRA LLC feel free to call, email, or comment below.

Author: , Self-Directed IRA Professional
[email protected]