Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

What is the HOTTEST REAL ESTATE MARKET in America?  A “top 20 hottest markets in America” list was just released by a big real estate organization… but I’ll tell you why their #1 market isn’t even close… and what part of the country absolutely is LIGHTING IT UP where real estate appreciation is concerned… and how YOU can profit from it, no matter where you live!  I’m Bryan Ellis.  This is episode 156.

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Hello SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you!

Ok, people, I get it!  You missed me!  Hehehehe.  Thank you for all of the nice emails so many of you have sent me in the last few days as I had to step back and focus on our real estate business a bit.  There are some crazy exciting things happening and it’s been so much fun to watch.  Carole and I have about 13 real estate transactions in progress right now and 3 of them are closing in the coming week alone.  So things are just crazy right now… crazy wonderful!

So… you want to know about the hottest market in America?

Well, the infamous National Association of Realtors – the organization famous for saying “it’s a great time to buy” no matter what’s going on the economy – releases a “hottest markets” list from time to time.

And I’ll tell you… as a matter of trivia, it is pretty interesting.  If you’d like to get a copy of that HOT MARKETS list, I’ll be happy to send it to you… just text the word HOTLIST with no spaces to 33444 and I’ll send it to you.

So here’s the thing:  The top HOT MARKET in America for October 2015 was, according to Realtor.com, Denver, Colorado.

Denver, in case you’ve never visited, is a beautiful city.  Really nice place.  I can totally see why people would want to live there, and why it’s an in-demand market.  I’ve got nothing bad to say about that city at all.

But there is something worth noting:

Denver is #1 on the Realtor.com list, sure.  And well deserved, I’m sure.  But here’s the thing:

Of the top 20 hottest markets in America, 12 of them – 60% - are in the state of California.

Now that alone is pretty amazing.  But let’s face it:  California is bigger than most countries in the world, so it’s not statistically improbable that there’d be a high concentration of hot markets there.  But let’s take it one step further to see where the REAL hottest market in America is.

As I said, 12 of the 20 hottest markets are in California.  But of those 12, 9 of them are concentrated in a small area of Northern California.  All 9 of those markets are within about 100 miles of each other.

So what you have is 9 blazing hot markets supporting each other… natural spillover causing great market strength in the broader area.

It’s all arguably a function of the astounding success of the tech sector and the venture capital business in and around Silicon Valley and San Francisco.  But that strength – ASTOUNDING strength, to be sure – is spreading the wealth in the markets of Northern California.

One of those markets is Stockton, CA.  Yes, THAT Stockton… the one that’s famous for crime problems and also for having gone bankrupt back in 2013.  Stockton is absolutely ON FIRE… and the investors who are making bank there just don’t seem to care about those things.

How hot is it? Well, just a couple of days ago, I got a market analysis report from Zillow about Stockton.  Bottom line?  Zillow has observed that Stockton has appreciated by 12% in the past year, and they’re predicting appreciation of 19% in the coming year.

That, my friends, is CRAZY awesome.  Imagine what it would mean for your portfolio if all of your properties appreciated by 19% in the coming year?  You’d be doing a happy dance, for sure!

I wanted to zero in on Stockton because it’s unique among many of the super hot markets in northern California. It’s unique because it’s large enough that there’s a lot of real estate activity – there are about 300,000 residents of that city – but small enough that there’s not much in the way of competition from BIG MONEY interests like hedge funds and other major capital sources.  And that means something really good for individual investors like me and you:  Serious opportunity.

Now stick with me here, folks, because this serious opportunity exists for EVERYBODY… not just those of you who are physically close to Northern California.

Let me give you an example of what my team in Stockton is doing RIGHT NOW.  As in… November 4… Wednesday of this week.

My team picked up a property in Stockton on Fairway Glen street for $137,000.  We’ll put about $12 grand into fixing it… and in about 100 days – barely even three months – we’ll have resold it for at least $195,000.  We’re confidently predicting a net profit of about $33,000.

Now this one isn’t one of our top 10 deals.  Not even close.  This one will likely yield about 22% cash-on-cash in 100 days.  Maybe more than that, because the fact is that the time between now and when we put the property back on the market is enough for property values to have been pushed even higher.

And here’s what I want you to understand:  This deal is one we’re doing for a CLIENT.  A client who will never pick up a hammer.  A client who will never see the property.  A client who, for all practical purposes, has no connection to real estate investing whatsoever… other than that she sees the clear opportunity to do very, very well by taking advantage of the scorching hot market there in Stockton.

And you know… you can’t really do this the same way in San Jose or San Francisco.  Yes, the markets are exploding there, too.  But the entry point for doing deals is SO MUCH HIGHER in those markets that it really precludes involvement from all but the most cash-rich among us.

Well here’s why I’m telling you all this, my friends:  Just yesterday, I opened 7 spots for new clients in the SDI Passive Property Flipping program.  For these clients, my team will FIND the great deals in the Stockton market, we’ll FIX the property to great resale condition, and will FLIP it to the next buyer… FAST!  Here’s something that’s cool:  Fully 1/3 of our deals in Stockton take a grand total of 90 days or less!  Yep.  Full life cycle from purchase to reno to sale and close of escrow.  90 days.

Now here’s the thing:  3 of those spots are already taken after less than one day of availability.  I suspect they’ll all be full within a week… maybe even within a day or two…

…and if you’d like to take advantage of the amazing opportunity to make VERY substantial gains in your portfolio from investing in a TRULY HISTORICALLY STRONG market… without getting your hands dirty at all, then here’s what you should do RIGHT NOW:

Visit SDIRadio.com/stockton right now.  There you’ll find a webinar that I’ve created that will tell you all about this program.  You’ll see a whole lot of case studies… not including the one I just mentioned to you, because that one is literally under 48 hours old… but you’ll see a LOT of case studies… all from the latter part of this year, so they’re all fresh, real examples.

You’ll see how the program works and learn whether you qualify for it.  But I respectfully recommend you go to check it out RIGHT NOW at SDIRadio.com/stockton.  We do have a “tour” event coming up in early December so that you can come out and meet the team if you’d like, but there’s a VERY VERY LIMITED capacity for that event.  So go right now to SDIRadio.com/stockton to learn more.

My friends…

Invest wisely today, and live well forever!

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You want great investment opportunities in the Golden State of California!  Well, we’ve got the great opportunities you’ve been looking for in Cali, and I’ll tell you all about them right now.  I’m Bryan Ellis.  This is Episode 155.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

Here we are on another glorious Monday!  I don’t know if you look forward to Monday like I do, but my friends… it’s got to be my favorite day of the week… Except for the other 6, which I also love!

Folks, a disproportionately large number of you, my dear listeners, live out in California.  And a lot of you who don’t live there would like the opportunity to invest there.

Today, I’m going to tell you about a way to do that that’s Simple… Safe… and Strong.  Crazy strong, actually.

Let’s start with a little example, shall we?

Just a few weeks ago, the SDI Flipping Team in northern California closed a very good – and rather typical for us – real estate flip transaction.

Will you bear with me for 30 seconds while I give you some numbers for those of you who are detail oriented?  Don’t worry… I’ll reduce it down to net profit and total duration in just a second.  Here are the quick details:  This house sold for $180,000.  We bought it for $121.  Put about $14,000 worth of rehab into it.

But for any deal, there are really only 3 bottom line numbers that matter – out-of-pocket investment, net profit, and duration.

And for this deal – on Houston Avenue in Stockton California – the total out-of-pocket was $135,500.  Total NET profit… after all costs… was $38,200… which is 28.1% cash-on-cash profit… and it all happened in a total of 45 days.

If you’re listening to this podcast on our website at SDIRadio.com, just scroll down to see a picture of this property – courtesy of Zillow – and a delightful little table showing those numbers:

Purchase Price:  $121,00Resale Price:  $180,000Out-Of-Pocket Costs:  $135,500Profit:  $38,200 (28.1% Cash-on-Cash)Duration:  45 days

Now here’s the thing, folks:

There’s nothing that’s unusual about that, for experienced flippers.

In fact, RealtyTrac releases a report each quarter about flipping activity in the United States.  The most recent such report is for the third quarter of 2015 – released just in the last few days – and what it shows is that real estate flipping is BIG…

…with over 43,000 flips completed in just the third quarter of this year.  That’s 5% of all home sale volume, but the really interesting stats are the average gross profit number – a whopping $62,122 per deal – and the average gross ROI – also a MASSIVE 33.8%.

So there’s huge results being generated in very large volume out there right now, if you’re in the right market.

So why are we focused on Northern California?

Well folks, it’s just a question of looking at the data.

Just this morning – November 2, 2015 – realtor.com released their latest list of 20 hottest markets in America… and almost half of those 20 markets for the entire country are… wait for it…

In Northern California!  Whether you’re talking about San Francisco or Sacramento or Stockton… that’s really where the action is.

Now, let’s be clear… this isn’t a low-dollar game.  The one region of Northern California where we focus is, I believe, the very best option available because the prices there are more affordable, but even so, you really shouldn’t even think about getting involved in flipping in NorCal unless you have a budget of at least $200,000.

But if you do… just think of it!

The example I gave you is just one of DOZENS my teams has performed this year… and that one isn’t particularly unusual.

We closed on another one just recently in Stockton… the #11 hottest market in America… And this one yielded a net profit of almost $56,000 versus an investment from our client of $176k… that’s a net roi of 31.7%!

That one took 150 days… but only because we had to evict a tenant from the property after we bought it.  But we knew that going in, and frankly… the numbers were just too good to pass up… and I’m glad we took it… 31.7% net ROI in 150 days?  I’d take it every single time.

So, my friends… some of you are looking for great investment opportunities in California?  Well, I’ve got you covered… but I’ve only got room for a grand total of 5 new turnkey flipping clients right now.

Never heard of Turnkey Flipping?  Well think of it like this:  You fund the deal.  You do nothing else.  And 3-6 months later… you get your money back plus a big, big payday.  That’s the bottom line!

Yes, there’s risk.  It’s entirely possible that California could break off into the ocean and you’d lose your entire investment.  And frankly, that’s one risk that I’ve not yet figured out how to hedge against.

But we have many, many very happy turnkey flipping clients and I’m so excited to offer you the opportunity to join us as a turnkey flipping client in the scorching hot markets of Northern California!

Want to learn more?  Then check out SDIRadio.com/norcal where I have a special webinar waiting on you with more information about this special opportunity.  Again, that’s SDIRadio.com/norcal… during that webinar, I’ll give you a WHOLE LOT MORE case studies, and I’ll give you a thorough introduction to the PROCESS we use for analyzing, selecting, purchasing, renovating and reselling properties.  You’ll understand where all of our efficiencies happen and why it’s possible for US to get great deals in a market that’s so hot it’s practically boiling.

So that’s all for today, my friends… check out SDIRadio.com/norcal for more info right away.  And remember:

Invest wisely today… and live well forever!

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Want a BRILLIANT way to find a high-quality tenant for your rental property?  This one is so simple, and so powerful, it’ll SHOCK you.  I’m Bryan Ellis… this is Episode 154.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

If you’re buying nice houses in nice neighborhoods as rentals, one thing is for sure:  You have a HUGE vested interest in making sure that you’re finding great, high-quality tenants.  In fact, when you’re buying into “Class A” type homes, the lower the concentration of rental properties versus owner occupants is for your target area, the more important it is that you find what I call “owner-quality” renters.

Good news:  I’ve got a brilliant and simple way to do that.

But here’s the thing – you shouldn’t be managing your own property, even if you live next door.  Let property managers do what they do, and you focus on building your portfolio.  So, maybe you should tell your property manager to listen to this episode for your benefit.  Just tell them to check out SDIRadio.com/154 to hear this concept.

So here’s the premise of the strategy:

In nice “Class A” type neighborhoods, neighbors aren’t exactly thrilled when they learn that a property in the area has become a rental.  We can all understand why… there’s the perception that more renters mean lower property values.  That’s not inherently true, but that is what many home owners think.

But there’s a GREAT way to use that to your advantage to find high-caliber, owner-quality renters at exceptionally low cost.

Here’s how it works:

First, get a list of every address in the neighborhood.  You can buy that from a data service, or you can just take an hour one day and write them down.  Either way is great.

Second, send a POSTCARD to every one of those addresses.  The postcard has one purpose:  To startle the other homeowners… to make them feel a bit of concern.  That will happen by using postcards of a particular color – I like neon colors – and by using very specific wording on the postcard.  Something like:  WARNING!  One home in our neighborhood is in danger of decreasing our property values, and it requires immediate action. Call this number for information – it’s just a recorded message for residents of NEIGHBORHOOD NAME only.  The idea is that you write a postcard that’s somewhat alarming because it mentions a threat to property values… but it’s also vague because it doesn’t say WHICH PROPERTY is the “threat”.

Third, when owners in your rental’s neighborhood call that number, what they’ll hear is YOUR VOICE on a voice mail message – you won’t actually speak to them, they’ll just hear the voice mail –you’re your message will explain to them that you’ve bought that property and you’re fixing it up and will now be renting it out… and that it’s extremely important to YOU that you help to protect and enhance their property values.  Then you tell them you’re about to find a tenant, but what you’d REALLY like is a tenant that’s recommended by an existing member of the community, because you’ve found that tenants with a connection to the community are very responsible and act more like owners than renters.  And you’ll ask them to make a recommendation to you about anyone they know who might like to live in the area.

You might even sweeten the pot by offering a referral fee of some sort.

Then at the end of the message, they’ll hear a beep and they can let you know if they have a referral.

Pretty cool, right?

Now it’s REALLY important that the postcard and the voice mail message be very, very well written… I can’t stress this enough.  Using the wrong postcard verbiage or the wrong voice mail message could not only make the strategy fail, but could also put you in a very negative situation with the neighbors.

So if you’re interested… if you see the immediate value of finding a tenant based on neighbor referrals… here's a sample postcard and voicemail script that does this very, very well.

But as cool as it is to have the neighbors themselves find a tenant for you, that’s not the really cool part.

When you use the right kind of phone service for this, what happens is that the telephone numbers of the callers are collected… and the numbers that are cell phones are placed onto a list that makes it really easy for you to send a text message to everybody on that list whenever you want.  Thus, you’ll be able to easily find tenants again in the future… with just a simple text message… and you could use the same list to help find a BUYER when the time comes to sell that property!

Want a great option for this service?  Check out this service - it's cheap, effective and does the job really, really well!

Having an easy way to quickly communicate with the entire neighborhood instantly… well that’s OVERWHELMINGLY valuable for a landlord.

Now, again… I’d like to stress that you probably shouldn’t be doing this yourself.  Instead, ask your property manager to listen to this episode and have them do it for you.  But it’s a great strategy worth applying in your own rental property portfolio.

I hope you enjoy the resources I've provided to you today.  Of course, if you're a member of the SDI Discussion Group, you received this stuff directly via email this morning.

What?  You're NOT a part of the SDI Discussion Group?  There's a simple solution, and it's free!  Just text the word SDIRADIO to 33444 right now.  No spaces, no periods, just text the word SDIRADIO to 33444 and you'll get automatic access to the future resources automatically at no cost!

My friends:  Invest wisely today, and live well forever!

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Want a way to generate monthly cash flow that’s MORE PROFITABLE and LOWER STRESS even than a well-managed rental property?  How’s 12% per year - or more - sound?  I’m Bryan Ellis, and I’ll tell you how to do it RIGHT NOW in Episode 153.

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Hello SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

People, people, people… I’ve been getting a lot of notes lately saying something like… “Bryan… you used to talk a lot about real estate notes as the best asset class, and now all I hear you talking about is rental properties.  Aren’t notes still a good option?”

My friends, not only are high-quality real estate notes a good option, but they remain a MUCH BETTER FOUNDATION for your portfolio than anything else… including rental properties!

For those of you who may be new listeners, a note – also called a mortgage – is just a loan for which real estate is placed as collateral.  So let’s say you have $100,000.  You might choose to lend that to someone in exchange for a certain interest rate.  But in order to make it safe for you to lend, you require that the borrower place a piece of real estate as collateral that you can sell if the borrower fails to make his payments as agreed.  That’s a simple explanation of notes – they’re really just real estate loans.  No more than that.

And usually, when a person wants to invest in notes, what they’re looking to do is to find a note that’s been originated by a lender, and then the investor – that’s somebody like you – would look to buy that note from that lender in order to generate a good yield on their capital.

And do you know what?  That kind of deal DOES happen every day… but, generally speaking, not with individual investors.  Sure, there are individuals who have the connections to pull off good note deals, but that’s pretty rare.

But that doesn’t matter, my friends, because there’s a MUCH BETTER WAY.  And that way is to create your very own notes – with exactly the terms you want – from scratch!

Now my friends, I’ll quickly explain the process to you.  There are a few of you in the audience who are do-it-yourselfers and will take what I give you and run with it… and that’s great!  But for the vast majority of my audience who are true passive investors, you should listen in for a moment as well so you understand the process… and then I’ll tell you how to have it all DONE FOR YOU – totally passively – in just a minute.

So here’s how it works:

The basic idea is that you’ll buy a house, and then you’ll TRANSFORM that house into a paying real estate note.  How?  You’ll sell the house using a strategy called Seller Financing, in which the buyer – rather than going to the bank to get a loan – the buyer will give YOU a down payment, and then they’ll also make payments to you for years to come, just as if you were the bank.  When you do this, you’ve BECOME THE BANK and you’ve transformed your house into a cash-flowing note!

But what kind of house does this work best with?  Well, there are 3 simple financial standards you should look for.  Curiously, the standards are all related to RENTAL RATES.  Why?  What you’ll find is that by targeting RENTERS who want to be buyers with a special message – that message being “you can now OWN a property for what you’re paying in RENT – then you’ll find it quite simple to convert houses into NOTES… and that’s the whole goal.  Thus, all of the standards involve the prevailing market rental rate for the property in question.  We’re going to use the rental rate to BACK IN to what we charge the buyer when they buy the property from us via seller financing.

So standard #1 is Rent To Value, or RTV – just divide the value of the property by the monthly rent.  What you’re looking for is a number at or below 100.

Standard #2 is Rent To Price, or RTP – just divide the actual PRICE you’re paying by the monthly rent.  What you’re looking for is a number that’s no higher than 80, and the lower the better.

Standard #3 is Rent to Recurring Costs, or RTR – just divide the sum total amount that has to be paid each month to cover property taxes, insurance and any servicing fees by the monthly rent amount.  A good standard here is that recurring costs should be, at most, 25-30% of the monthly rent amount.

That’s all a bunch of mathematical gobbledygook at this point, so let’s look at a real deal.

So I’ve got a little house that’s newly renovated.  It’s worth $60,000 and I can buy it for $45,000.  Market rent for this house is $750.

So what I’m going to do is buy it for $45,000, I’m going to sell it for about 10% more than the cash sale price, so I’ll sell it for about $66,000.  I’ll ask for a down payment of about 10% - let’s say $6,000 – and then I’ll finance the rest of it – $60,000 – for the buyer in the form of a note.

But what will the interest rate of that note be?  That’s easy – we let the market tell us.  We already know the property rents for $750, and that we want to market this thing as being available for the same price as rent.  So all we do is take out the monthly cost for things like property taxes, insurance and servicing fees, and what we’re left with is the amount we can collect in principal and interest.

In this case, that number is $612.50 per month.

Then, with the help of my trusty-dusty, handy-dandy financial calculator, I see that if I want to finance the amount of $60,000 and receive payments of $612.50 per month for, say, 20 years, then the face rate of that note will be a whopping 10.83%!

That’s right, folks… you’ll yield 10.83% for 20 years.  And that’s a BEAUTIFUL thing! But is that ACTUALLY right?

No, it’s not.  The truth is even better.  Because while the amount you’ve financed for the buyer is $60,000 – remember that the amount you actually have tied up in the purchase of the property is only $45,000!  So returning to my trusty-dusty, hand-dandy financial calculator, what I learn is that by collecting the same amount of money per month, but by having only $45grand invested rather than 60 – well, your annual yield goes up to an eye-popping 15.6%!

And remember – your capital is secured against the property.  If the buyer defaults – which is statistically improbable on any given deal – then you can sell the property on the open market or even just resell it to another owner financed buyer!  With these deals, the downside is not distressing, and the upside is simply BEAUTIFUL!

So, my friends:  Those of you who have been itching to do a really great real estate note deal yourself… but you’re having trouble finding a good note to buy… I’ve got great news for you!

I’m not introducing the world’s very first turnkey real estate NOTE investing program… and you’re going to love it.  My team will do all the work for you – we’ll find a great property that meets the parameters, perform the marketing to find a seller-financed buyer for you, and we’ll put it all together in a pretty little package so that you have to do virtually nothing other than fund the purchase of the property… and shortly thereafter, you end up with a note that can pay you – and pay you HANDSOMELY – for decades to come!

But we’re doing this as a test only.  I already know the strategy works… what we’re testing is whether it’s worth our time to offer this as a turnkey service.  So I’ll be taking on exactly 5 test clients, and two of those spots are already taken.

Want to know more?  Everything you need to know is in a short webinar at SDIRadio.com/noteinvesting.  Again, that’s SDIRadio.com/noteinvesting.  Go over and check it out.  If you’re looking for low-stress investments with a consistently high yield, you’ll love what you find there.

My friends, invest wisely today… and live well forever!

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There’s been a IMPORTANT RULING in federal court that’s big for owners of rental properties… and this one is all about MANDATORY GOVERNMENT INSPECTIONS of rental houses.  If you’re a prospective owner of rental property, pay close attention to this one.  I’m Bryan Ellis.  This is episode 152.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

If you’re a rental property owner with property located in a jurisdiction that has mandatory rental property inspections – particularly in the jurisdictions that FORCE the inspection and DEMAND that you pay for it, too – you know how much of a problem those inspections can be, with very substantial, very detailed, and sometimes very ARBITRARY standards which can cost property owners thousands of dollars, even for very well maintained properties.

Many locales even include CRIMINAL penalties for landlords who fail to comply with the inspection requirement.  That’s right… I said CRIMINAL penalties.  It’s a big deal.

But there’s a problem… a problem for jurisdictions that do this sort of thing.

You see, there’s this little thing called the Fourth Amendment to the United States Constitution.  That’s the one that guarantees the rights of citizens against unreasonable search and seizure of their persons, their papers, their effects and YES… their HOUSES without probable cause as evidenced by a warrant.

Now, I realize that some of the more bleeding heart types out there will immediately think that it’s a good thing for the government to be able to force their way into a home, without being asked or welcomed, and to inspect that property for whatever purpose deemed suitable by the government.  But I, my friends, am not a bleeding heart.  I think – and the law agrees with me – that you have rights as a property owner, and when a government forces its way into your property – particularly under the threat of criminal prosecution, and under the demand that YOU PAY for that forced inspection – well, then your rights against unreasonable search and seizure have been trampled for both landlord AND tenant.

Thankfully, a federal court judge for the Southern District of Ohio recently came to the same conclusion.

The case was called Baker vs City of Portsmouth, which was handled by the 185 Center For Constitutional Law on behalf of four rental property owners and one tenant.

The bottom line of this case is that, surprisingly but happily, the court did it’s primary job:  To protect citizens – in this case, individual investors like you and me – from unreasonable government encroachment.

Ahhh yes… you think this is a genuine public safety issue, don’t you?  It’s not, folks.  Here’s the deal:  The honest observer will see that these forced inspections have two purposes:  First, to generate revenue for the government – both directly by charging inspection fees, and indirectly by driving spending for repairs which is then subject to local sales tax – and second, to directly and substantially influence the “type of people” who live in an area.  Yes, that’s right… it’s incredibly easy to see where an inspector can harshly apply an arbitrary standard while inspecting the property of an “undesirable” resident, thus effectively forcing that tenant to reconsider where to live and/or own property.

Surely the government wouldn’t do that to you, an honest, decent individual investor… would they?

Well, now they definitely won’t in the city of Portsmouth in Ohio.  And frankly, it’s quite reasonable to see how this legal rationale could spread to other parts of the country as well… there’s just not a lot of gray area in this.

It was so cut-and-dry, in fact, that the judge in this case not only ended the unreasonable searches being performed by the city of Portsmouth, but he also allowed a related lawsuit to continue, in which landlords are suing the city for reimbursement of the inspection fees they’ve been forced to pay over the years… fees which were, as you’ll recall, enforced under threat of CRIMINAL prosecution.

But folks, don’t get too excited about this just yet if you live in an area with forced inspections or other encroachments against property owners.  The reality is that this case has absolutely no bearing on anyone other than the parties to the case.  Only if it reached the appellate court level with the same result would this ruling apply to the entire 6th circuit.  The only way to make it national would be for it to go to the U.S. supreme court with the same ruling.

Folks, this is why one of the standards I look at when choosing a local market for buy-and-hold real estate is the REGULATORY ENVIRONMENT.  Look, none of us like to think about statutes, regulations or law enforcement… but you’ve got to consider it.  Look at it like this:  What if you had the choice to invest in two basically similar properties… similar cost, similar yields, similar expectations… but one of them was located in a place like Portsmouth, where the local government is overtly overbearing and uses law as a WEAPON against its citizens?

Well, it’s obvious… you’d choose not to invest there.  You’d go with other options.  That’s why a KEY COMPONENT of choosing a good locale for your investing is to evaluate the regulatory environment.  The fundamental question is this:

Does the locale you’re considering view investors and business people as ALLIES or as ADVERSARIES.  Thumbtack – a cool service for connecting consumers with specific service providers in their areas – provide an annual survey that ranks relative “friendliness” of states and cities to small businesses.  The results?

LEAST friendly states are California, Illinois, Connecticut and Rhode Island, followed closely by New York, Massachusetts and Pennsylvania.

So, I have a question for you:  When you perform due diligence on a property, do you include an analysis of the regulatory environment of the target market?  If so, what factors do you consider?  This is episode 152, so go over to SDIRadio.com/152 to share your comments about this topic.  We’d love to hear from you!

My friends, invest wisely today, and live well forever!

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Today you learn why the “wealth building” model you’ve been taught about rental property investing is – well, it’s totally ASS-BACKWARDS – and I’ll teach you a MUCH SMARTER way that can yield you a portfolio of 15 reliable, high-yielding rental properties for a one-time investment of ONLY $150,000.  I’m Bryan Ellis… get ready to have you mind blown right now in Episode 151.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

I hope you’ll forgive my use of the mildly vulgar word in today’s introduction, but this one is worth shocking you to get your attention.

There’s a belief that’s pervasive… and it’s true.  The belief is this:  Rental property investing can make you wealthy over the long term.

That’s very, very true.  Folks, the advantages of owning rental real estate are almost too vast to mention… regular income, appreciation, tax benefits… it’s like the ultimate cornucopia of investment benefits.

But the way you’re taught to achieve it is, well… it’s totally backwards.  Here’s the prevailing ‘wisdom’ – and I use that word very loosely – on the topic:

Conventional wisdom tells you to go out and buy a house – ideally at below-market pricing.  You leverage your efforts by getting a loan to finance the property.  You place a tenant in the property, who pays rent, which you use to pay down your debt and to cover expenses like property taxes and maintenance.  And hopefully, you’ll have $200 a month or so left over after all expenses as your reward.

Then the hope is that one day into the future – probably 25-30 years into the future – the property will be totally free and clear of all debt, yielding you a substantial bump in income, and you’ll have an asset that you can then sell to finance your retirement.

Of course, you’ve got to do this 10-20 times in order to provide the kind of income and financial future you’ll need… and each time, it means shelling out another $100,000 to $150,000 to get a top-quality rental property.

Can this approach work?  Yes, it can.  But I know a whole lot of real estate investors… and not many who have had success with this approach.  The problem is that it takes SO LONG to get any benefit from doing this… it’s just terribly demotivating.  This is an example of a strategy that is very, very easy to sell rental properties to investors – particularly new ones – but it just doesn’t hold up under the strain of reality.  The payoff is too distant and too uncertain.

And frankly, it’s REALLY, REALLY dangerous.  If you’re clearing $200 or $300 per month… that won’t be enough to make a dent when an air conditioner goes out or a roof must be replaced.  You’ll go into the red very, very quickly.

The thing about rental property is this:  It does not make sense as a one-off investment.  The best scenario is to have a portfolio of multiple properties, all generating strong cash flow, so that you’re protected from the ebb and flow of natural variations in expenses like maintenance and vacancies.  But you can’t do that with one property only…

…and you can’t even do that with multiple properties, if they’re all leveraged and you’re only clearing a couple hundred dollars a month on them.

What’s the answer?

Do exactly the OPPOSITE of conventional wisdom… use the SDI Wealth Snowball strategy.

Using the SDI Wealth Snowball Strategy, you make a one-time investment into wise high-yielding properties… pay all cash for those properties… and you let the income generated buy you ever more property to repeat the process over and over… until some point in the future, when you have many, many properties… all free and clear, and all yielding a truly SUBSTANTIAL income… all as a result of a one-time investment.

This isn’t some wild, theoretical idea either.  Imagine this scenario with me:

You call me up and say “Bryan, I’ve got $150,000 available cash, and I’d like to build a large, very profitable cash flow portfolio from that money.”  Here’s what I’d do:

• First, I’d confirm your TIME HORIZON. If you have only 3-5 years, you’ll certainly get some benefit.  But if your time horizon is 10 years… or even better, 15-25 years, then you’re a great fit
• Next, I’d confirm your STRUCTURING. The SDI Wealth Snowball relies on certain tax advantages that are readily available to basically everyone… and the strategy assumes the accumulation of a very large portfolio of great value, and that you’ll want to pass that portfolio to future generations in a safe, favorable manner.  If your current legal structure can accommodate all of that, great!  If not, I advise you on how to make it happen.
• Finally, I’d confirm your FUNDING. This strategy requires $150,000.  Not $150,000 per property, but $150,000 total, one time, forever.  And it must be cash.

What’s possible using the SDI Wealth Snowball?  Well, here’s how it works:

We’d use your $150,000 to buy 3 high-quality, high-yielding rental properties that yield at least 8.5% net annual cash flow AFTER a very, very generous allowance for maintenance, vacancy, property taxes, insurance and property management.  So, after ALL of those expenses are handled – and handled with plenty of room to spare – you yield at least 8.5% annually.

If you heard me correctly, and you realized that I’m suggesting that you buy 3 DIFFERENT properties with your $150,000… and thus the average cost per property is only $50,000… well, you heard me right.  There are SEVERAL key markets across the country where very high-quality property can be acquired in that price range… and due to some very powerful advantages unique to these select local markets, there’s a huge preponderance of available renters.

Not all markets where you can buy a $50,000 property are the same.  Some of those places are downright dangerous and foolish.  But some of them – a few of them – are like absolute gold mines for investors who want to create strong cash flow.

So here’s the thing… with the SDI Wealth Snowball, all of your income is plowed back into buying more properties.  And with the EXTREMELY conservative model we use, it still takes only 4 years before your income has actually purchased ANOTHER ENTIRE RENTAL PROPERTY… at no additional cost to you!  Now you have 4 properties…  And then you get another free property somewhere during year 7 and year 10… and then about year 17… you start getting another free property EVERY SINGLE YEAR.

Where does this leave you?  After 25 years… that one-time investment of $150,000 is now bringing you an annual income of over $75,000 – and you own 18 different properties totally free & clear with a value of about $1,000,000… even if they haven’t appreciated by a single penny!

And my friends… there are 2 things I want you to know about what I’ve just told you:

• First, These estimates are CONSERVATIVE… truly conservative. If you saw the ACTUAL numbers rather than these hypotheticals, you’d be BLOWN AWAY.
• Second, this strategy leaves you with an overwhelmingly valuable portfolio which can PROFOUNDLY aid with your own financial needs… and is also very easy to pass down to future generations, and provide an amazing base of financial security for them as well!

This strategy, my friends, the SDI Wealth Snowball – it’s just proof that better thinking leads to better investing.

How does that feel to you, my friends… how would you like to invest a sum total of $150,000 – not 100 grand here and 100 grand there every few years, but $150,000 one and only one time – and then in just the right amount of time for your situation, you have a portfolio of many, many properties producing strong cash flow with absolutely no debt… suitable for funding your retirement and perfectly structured for building multi-generational wealth for your family…

...well, if that’s a worthy outcome for you, and if you’d like to learn more, check out my FREE webinar on this program by visiting SDIRadio.com/snowball.  Again, that’s SDIRadio.com/snowball.  I’ve got some EXTRAORDINARY options available right now that will simply blow your mind.  So if you’ve got $150,000 and the thought of building a grand portfolio of cash-flow producing assets appeals to you, without ever investing additional money beyond $150,000, then check out my special webinar at SDIRadio.com/snowball right now… you’ll be very, very glad you did.

My friends:  Invest wisely today, and live well forever!

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Want to know what a REALLY sexy rental property cash flow deal looks like?  I’ll profile one for you right now… and tell you how to find deals like this little jewel for yourself… maybe even this exact property!  I’m Bryan Ellis.  This is episode 150.

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Hello, SDI Nation.  Welcome to the podcast of record for savvy, self-directed investors like you!

My friends, there’s great wealth to be built by owning alternative assets – you know, assets other than those your financial advisor would sell to you.  Nothing wrong with a good financial advisor, they certainly have their place, but I’ve observed that almost exclusively, the only thing they’ll offer you are assets that come from Wall Street.  But is there a better way?

The answer is, without a doubt, YES.  I’d like to give you a REAL example today.  And you’re going to want to pay close attention to this for two reasons:

First, it’s a GREAT case study of a particular type of cash flow-generating asset that has a place in nearly every portfolio… quite certainly, including yours.

And Second, this particular asset is actually AVAILABLE right now… and if you’re in the market for an EXCELLENT turnkey rental property, I respectfully suggest you listen very, very closely.

This is a property located in an older neighborhood in the southeast.  The property itself was originally built in 1920, though it’s silly to suggest that the property itself is that old, as it’s been almost entirely newly renovated in the last couple of months.  Every major system – you know, the stuff that is expensive to replace – all of that stuff is NEW.  It is, in fact, in excellent condition… it’s even warranted for an entire year for the next owner.

Another thing about it is that it’s OCCUPIED with a paying tenant.  The rental rate is $700 per month.  After the most primary expenses – Property tax, insurance and Property Management and maintenance – the net is right at $6,000 per year.

And versus the TINY purchase price of $49,900, that creates a NET of about 11.7% PER YEAR.  And hey… for all of you legal beagles, I’ve got to stipulate:  That’s a projection.  Your results could be much better.  Or much worse.  Who knows… I guess it’s possible that this property could break off into the sea and never be seen again…

…Though from what I hear, that’s a lot more likely to happen to you folks out in the People’s Republic of California!  Speaking of your Californians… I’d like to ask you something:  How much will just the DOWN PAYMENT of your next California property cost you?  A WHOLE LOT MORE than the measly $49,900 of this property.  That’s just the down payment.  And are you going to make a 11.7% cash flow on that money?

You know the answer – the answer is NO.  Of course, I know what you’re hoping.  You’re hoping that real estate prices continue to scream ever higher, even though real estate price in LA and San Diego are perilously close to the highs they reached during the bubble, and they’re already there in San Francisco.  My friends, it’s time to think a bit broader.

Here’s something amazing to consider:  At 11.7%, it takes less than 6 1/2 years to get your ENTIRE INVESTMENT back out.  And for you pessimists out there, go ahead and add in the Murphy’s law factor that says that anything that can go wrong will go wrong, and you’ve still got 100% of your capital investment back in 7 years.  And after that, what you have is an asset that STILL generates substantial cash flow every single year – while you do nothing whatsoever to manage it, other than reading the statement from your property manager from time to time.

Plus, one of the most beautiful things about this deal is that it’s what’s called a “Section 8” house.  The long and short of that is that it means that the rents you receive each month are actually paid directly by the government.  And it’s on time, every time, 100% of the time.  Your rents are paid like clockwork.  There’s no variability.  For more information about that program, check out episode 144 of this show, available at SDIRadio.com/144.

I like this deal.  It makes a LOT of sense.  But there’s only one exactly like this… and if you’d like to learn how it can be yours, the time is now!  It’s a massive projected cash yield of 11.7% versus the tiny investment of only $49,900 on a property that’s totally newly renovated with a maintenance warranty and a paying tenant in place, then here’s what you should do, and should do RIGHT NOW:

Go to SDIRadio.com/consultation and make an appointment to talk with me… right away.  This one won’t last long.

Invest wisely today, and live well forever!

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Find This Episode - and All Resources - here:

https://SelfDirected.org/podcasts/investor-talk/big-lie-ira-not-limited-using-non-recourse-loans-episode-149

Interested in borrowing money in your IRA to do bigger deals?  Have you been told you’ve got to use a Non-Recourse loan?  THINK AGAIN… It’s just not true!  In fact… I’ll tell you why even some “Non-Recourse” loans don’t even qualify for use in an IRA.  I’m Bryan Ellis.  I’ll tell you the brutal details RIGHT NOW in Episode 149 of Self Directed Investor Talk.

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Hello, SDI Nation!  Welcome to the podcast of record for SAVVY self-directed investors like you!

There’s been a whirlwind of activity here at SDI Headquarters.  We’re doing a lot of great deals with our clients and we’ve got a couple of really, really solid multifamily properties that, frankly, are truly solid deals – one of them a 5-unit building in the $250,000 price range and a 12-unit building around $800K.  Both fully renovated with highly reliable cash flows and double digit cap rates… a beautiful, beautiful thing.  Plus, you might recall a couple of weeks ago when I had 19 GREAT fully turnkey single-family properties available for purchase, and all 19 of them were snapped up within about a week?  Well, one of those is available again due to an unfortunate situation for the former buyer… and this is a good one!  Get this – the pro forma suggests you can get a solid 11.5% cash-on-cash return AFTER factoring out property taxes, insurance, management fees and even maintenance expenses!  And this property will only cost you $49,900 to get into it… that’s not the down payment, that’s the entire price!  So some really, really awesome opportunities available right now, for a very brief time.

If that sort of thing gets your attention – as well it should – then let me know – and quick!  Just go over to SDIRadio.com/consultation and set up a time to talk with me.

My friends… there’s a rumor going around.  This one is pervasive.  It goes something like this:

If your IRA borrows money, it must use a “non-recourse” loan.

You ever heard that one?  It’s almost true… but very, very wrong.

For those of you who may not know, a “non-recourse” loan is one in which the lender’s only recourse if the borrower defaults is to foreclose the property.  The lender isn’t allowed to sue the borrower or take any action other than to foreclose the property.  These loans aren’t generally available at local banks or big lenders.  They’re the domain of specialty lenders who cater

That’s the reason that the “non-recourse” fable is so prominent among self-directed IRA custodians and account holders.  You’re not allowed to use your IRA as collateral for a loan or other extensions of credit.  To do so is a prohibited transaction, and would totally blow up the account.

But nowhere in the tax code – that I am aware of – is there any indication that the only loans that can be utilized by an IRA are non-recourse loans.  What is clear is that neither the IRA itself nor the owner of the IRA is allowed to accept liability for such loans.

But that leaves… oh, let me see… nearly EVERYBODY ELSE IN THE ENTIRE WORLD!  Here’s what I mean:

What if you could get some unrelated third party to acquire financing for a deal in your place?  Maybe a close friend or a business colleague would serve as something of a “credit partner” and allow you to essentially “rent” their credit from them.  You’d do something like pay the third party a fee, and in exchange, they’d get a loan for your deal that is more favorable or more legally compatible with your IRA than anything you could get yourself.

In that case, the loan is absolutely NOT a “non-recourse” loan.  The lender could take the property – which is pledged as collateral – if your IRA defaulted, but that lender could also pursue judgments or other recourse.  But that recourse would be against the CREDIT PARTNER, and not against your IRA.

So there you have it:  Use of a full-recourse loan that does not violate the requirements of your IRA.

And this isn’t just a neat idea without practical value.  Here’s a simple example of why:  Most non-recourse loans that are suitable for your IRA are more expensive than the same loan would be if it was a normal full-recourse loan.  Additionally, non-recourse loans can have some unusual terms and penalties that are not standard fare in full-recourse loans.

Thus it’s entirely plausible that it would be cheaper or otherwise more favorable for an IRA owner who needs funding to pay an unrelated third party a fee for them to acquire conventional full-recourse funding for the asset on behalf of the IRA.  Frankly, it’s not much different than paying points on the front end of a loan to make the loan cheaper over its lifetime.

And you know, that’s not the only reason that you might consider avoiding non-recourse loans.  There’s another, more sinister, reason.  That reason is called a “carve-out”.

A carve-out is an exception to the “non-recourse” nature of a loan.

In other words, it’s possible – and rather common these days – for a loan to stipulate that the lender can’t pursue claims against the borrower… except for certain situations.  Those situations are called “carve-outs” or “bad-boy guarantees”.  They are exceptions for which the non-recourse provisions no longer apply.

Historically, carve-outs have been used to reclaim the ability to take action against the guarantor of a loan in the event that the guarantor commits an illegal act or fraudulent act, or if the guarantor does something to impair the lender’s claim against the collateral.

But increasingly, carve-outs are being used for very broad issues that, frankly, are, in my humble but entirely correct opinion, so vague as to put borrowers in real danger.  For example, I’ve got a loan document in front of me this moment from North American Savings Bank, a non-recourse lender, which stipulates that the loan is non-recourse… unless the borrower is involved in “waste committed or permitted on the property”… and there is also recourse against the borrower for any fees involved in the loan which are neither principal nor interest.

Why does this matter?

Even though these things are contingencies, they still represent an extension of credit by the IRA, as the IRA is committing to cover those expenses in the event it is required to do so.

Why does it matter if your IRA extends credit?

That one is simple:  That’s prohibited… yep, the good ole prohibited transaction… the one that irreparably blows up your account and subjects your account to Armageddon-like taxes, penalties and interest… all because you took out a “non recourse” loan which, it turns out, wasn’t really non-recourse at all.

So that little trick I told you at the beginning, where your IRA pays a 3rd party credit partner to get a conventional (and cheaper) loan to finance your deal… well, that’s sounding smarter and smarter all the time, isn’t it?  Because in that case, your IRA is just paying a fee to your credit partner… but not signing on the dotted line for any loans with questionable terms that could blow up your account.

And one more word of warning:  Generally speaking, you’re going to have to pay a proportionate amount of income tax from your IRA for any profits made from leveraged transactions.  So, for example, if you do a deal for which you acquired a 90% loan, then roughly 90% of the profits will be taxable to your IRA.  But with one simple change, you can probably eliminate that tax burden entirely.  What is that change?  Convert your account to a self-directed 401k instead, and suddenly, the income tax liability on the debt financed portion of your deal probably goes away entirely!

That’s all for today…

My friends, invest wisely today, and live well forever!

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STOP THE PRESSES!  I was WRONG about investing in Gold in your retirement account!  Yes, I made a rare error, and I’m here to correct the record.  But WAIT A MINUTE… you’re going to be surprised about HOW I was wrong… and you’ll learn something very valuable in the process.  Plus, you’ll hear about an EXTRAORDINARY multi-family investment property opportunity.  I’m Bryan Ellis.  You’ll get it all right now in Episode 148.

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Hello, SDI Nation.  Welcome to the podcast of record for savvy self-directed investors like you!

Yes, you heard it right:  I screwed up.  Sort of.  But people… not a single one of you caught my error.  What’s up with you people?

Hehehehe.  It actually took the watchful eye of the venerable expert Mr. Tim Berry, IRA & 401k attorney extraordinaire out in Phoenix.  Tim, thanks for catching my error… but don’t you have better things to do than listen to this little podcast?  Ha!  Of course you don’t… because this is the PODCAST of RECORD for savvy self-directed investors!  Seriously Tim, thanks so much!

I’ll get to that error in about 10 seconds, but first:  Hang with me until the end, particularly if you’re interested in enjoying HIGH cash flow.  I’ll tell you a bit about some multifamily property investment opportunities that involve VERY high cash flow, substantial equity from day 1, and physical structures that are totally newly renovated… all in a locale that’s very, very stable!  Doesn’t get much better than that, so stick with me.

So here’s the error I made about investing in gold through your retirement account:

All of the stuff I told you about the restrictions on investing in gold through your IRA is totally true.  If you buy gold in your IRA, its got to be 99.9% pure.  And if it’s a coin, basically it has to be a government-issued coin like the American Eagle or Canadian Maple Leafs.

You can’t just go out and buy gold willy-nilly in your IRA.  I wasn’t wrong about that.

What, did you think I was FUNDAMENTALLY wrong about what I told you yesterday?  Ha!  Don’t be silly.

But here’s where I wasn’t exactly perfect, and honestly, I shouldn’t even be surprised.

Here’s the deal:  All of those restrictions apply to buying precious metals in your IRA.  Exactly like I said.

BUT… as is nearly always the case… a self-directed 401k is better than a self-directed IRA.  Why?  Those restrictions apply to a self-directed IRA, but if you’re using a self-directed 401k, then you could let your 401k buy gold bones and let the dog bury them in the back yard for safe keeping.

Yep… that’s right:  The Self-Directed 401k lets you have astounding flexibility when purchasing precious metals... and a self-directed IRA does not.

So if you want to be an investor in precious metals, your options when using a self-directed IRA are severely limited versus using a self-directed 401k.  I didn’t know that before yesterday, though I’m really not surprised to find another CLEAR EXAMPLE of the superiority of self-directed 401k’s over IRA’s.

And folks, if you don’t yet have a self-directed 401k and you think you don’t qualify to have one, go back to Episode 141 of Self Directed Investor Radio to hear exactly what those requirements are, and how nearly ANYONE can comply with them with just a small bit of effort… effort that is TOTALLY worthwhile.

BUT… and this is huge:  Not all self-directed 401k’s are created equally.  It depends profoundly on the specific words used in the plan documents and here’s something I’ve observed:  A whole lot of the self-directed IRA custodians who also offer self-directed 401k’s actually draft their plans in such a way that the limitations of IRA’s actually apply also to their 401k’s as well.  Yes, folks, it happens… and it happens VERY frequently.

That means that it’s POSSIBLE for you to have a self-directed 401k and STILL not get the flexibility it offers because the language used in your plan, as drafted by your custodian, imposes IRA-based limits on your account rather than allowing you the full range of freedom that’s available in a 401k.

My advice:  Don’t use the wrong kind of 401k!

Where can you get the right kind of self-directed 401k that offers all of this flexibility… and practically makes you a financial genius at the same time?  Hehehehe

Just check out SDIRadio.com/best401k.  Again, that’s SDIRadio.com/best401k.

My friends… I don’t often get things wrong.  I’m almost always right.  Just ask me.  I’ll confirm it for you.  Hehehehe

But I got this one wrong, and I’m happy to have had the chance to correct it for you.

Folks, that’s all about Gold investing.  Honestly, it’s not my favorite topic anyway, but it’s important.  But what IS a favorite topic is building consistent, reliable CASH FLOW and WEALTH through REAL ESTATE!

So how would you like to own – or possibly even partner with me in ownership of – a GREAT multi-family property that has excellent and highly reliable double-digit net cash flows, is totally newly renovated, and is potentially available at FAR below it’s appraised value?  Well, that opportunity exists and is very real.  I’ll be sending information about it to my TOP PICKS list tomorrow, so be sure to get on that list right now if you’re not on it already.  To do that, just text TOPPICKS to 33444.  Again, text the word TOPPICKS – spelled TOPPICKS with no spaces to 33444.  You’ll be glad you did!

My friends:  Invest wisely today, and live well forever!

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GOLD!  No matter how expensive or cheap gold is, there’s always a lot of conversation about investing in it through an IRA or 401k.  But the IRS says you can’t use your IRA to invest in collectibles, which includes metals and coins.  Is it even possible or legal to buy gold in your IRA or 401k?  I’m Bryan Ellis.  I’ll tell you the answer right now in Episode 147.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you!

It’s always easy to stir up conversation and find out what a person’s world view is by bringing up the topic of gold investing.  Gold is the one asset where many otherwise intelligent investors are wholly willing to completely ignore declining value just because of the feeling of security offered by ownership of the asset.  It’s as if Gold occupies some rarified plain of uniqueness among asset classes.

And you know, I’m not really going to argue with that.  I’m not a total brainwashee to the whole “gold” thing… but I certainly see the point of those who are.

Having said that, there’s a curiosity – more of a technicality, actually – that you need to know about if you’re interested in using your retirement account to purchase gold.

The technicality is that, technically, you can’t really do it.  The IRS specifically includes bullion and coins in the definition of the term “collectibles”.  And collectibles is one of only two asset classes specified as wholly unavailable to retirement accounts, with the other being life insurance.

And if you can’t buy gold in the form of bullion or coins, how will you buy it?

Fortunately, there are exceptions.  Those exceptions are rather specific, but not unreasonably restrictive.  Here’s the gist of it:

If you want to buy bullion – specifically, gold, silver, platinum or palladium – the purity of the bullion must be equal to or greater than the level required by public exchanges like COMEX or NYMEX, which is measures about 99.9%… in other words, very, very pure bullion.  If it meets that standard, then your retirement account is allowed to purchase it.

And then there’s the question of gold coins.  The rules are fairly rigid here as well.  By and large, government-manufactured gold coins are acceptable.  For example – American Eagles, Canadian Maple Leafs and Australian Nuggets.  But the purity standard still applies.  For that reason, some popular government-issued gold coins, including the South African Krugerrand, which has a purity below 92%, does not meet the qualifications.

But that’s not the end of the story.  Now that your retirement account has purchased bullion or coins of the appropriate purity, the next big question becomes:  Where are those assets physically housed?  Do you get to take possession of those items, such as to store in a home safe or safe deposit box?

Folks, this answer certainly isn’t going to make you happy if you’re one of the many people who have an inherent distrust in either financial institutions or the government – which certainly includes me.  The answer is that – with only one exception – if you own coins or bullion, they must be physically in the custody of a trustee, which will likely be the custodian of your self-directed retirement account.

I hate to burst your bubble on that one, for those of you who like the idea of stashing a lot of gold at your home in the event of a systemic collapse.

But there is, as I mentioned, one exception.  The exception is that if your retirement account purchases a specific type of gold coin – American Eagles – then those coins can be held by you personally at your discretion.  So, bottom line:  If you want to use your retirement funds to buy gold and you want to hold that gold in your home safe or otherwise, then you must purchase American Eagles.

As an aside, have you ever looked at an American Eagle coin?  Those coins are absolutely stunning, just an absolutely magnificent design.

There you have it, folks… the rules for investing in Gold or other precious metals in your retirement account.  I think there absolutely is a place for Gold in the portfolio of most investors, though I prefer other hard assets more, such as real estate.  But Gold certainly has a place.  And if you’re in the market to buy some gold, I do have some suggestions for you concerning a good, reputable source for making those purchases.  Just check out SDIRadio.com/gold for that information.

My friends, invest wisely today, and live well forever!

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