Entrust or Mid Ohio??? - Posted by Joe C. (AR)

Posted by Ron (MD) on August 26, 2003 at 05:57:01:

IB,

I’ve looked into that. You can hire a management company who can pay bills. The catch is that you can’t be an owner of the management company.

Good idea, though.

Regards,

Ron Guy

Entrust or Mid Ohio??? - Posted by Joe C. (AR)

Posted by Joe C. (AR) on August 21, 2003 at 18:36:51:

I want to use an IRA to help purchase a mini-storage facility. I know the ups and downs of these types of investments. My question is which offers the best value and consultation, Entrust or Mid Ohio? Anyone have any experience they’d be willing to share?
Joe C. (AR)

Entrust…one final clarification - Posted by Ron (MD)

Posted by Ron (MD) on August 23, 2003 at 20:11:25:

In the discussion below, it described (in excruciating detail) some service problems I’ve had with Entrust. I stand by those comments.

Along the way, I also said a couple things that I was less certain about (and that’s how I presented them). I want to address those two items briefly so as to be sure that I didn’t leave any incorrect impressions.

First, and foremost, I said that I thought there were differences in the legal standing of Entrust and Equity Trust that resulted in Equity Trust being the more secure of the two. I was told that by a manager at Equity Trust…it may or may not be true. Hugh Bromma says it’s not true. Hugh Bromma has always been honest with me. I’m no expert in this arena…I personally don’t know if one company is safer than the other. I will say that I’ve never been nervous about the safety of my funds with Entrust and that has nothing to do with my consideration of moving.

Secondly, I said in one post (where Hugh said that other companies do not always disclose all their fees) that my most recent statement had some fees that seemed high, but I didn’t remember if they were disclosed, or not. Hugh took that as an implication that I was saying that they were hidden, undisclosed charges. I honestly didn’t intend to make that implication. Hugh also explained why the fees were higher than I expected…and, again, I believe Hugh and his explanation makes good sense.

Bottom line, I remain critical of Entrust’s service (sorry Hugh), but have no personal knowledge of them being more or less secure than others. Also, there fees are disclosed and seem fair (although I haven’t recently compared their fees to other companies).

This has been an interesting thread…but it’s time to move on. I am disappointed that Equity Trust didn’t chime in and I do commend Hugh for doing so on behalf of Entrust.

Ron Guy

Re: Entrust or Mid Ohio??? ANSWERS? - Posted by Linda Simms

Posted by Linda Simms on August 22, 2003 at 18:35:59:

I find it interesting that we are getting all the answers below from Entrust-Hugh and none from Equity Trust-Dick Desich. How about it Dick, do you have any answers or reasons why your service has declined and your prices have gone up and believe me it has. Lets get both sides of the story. At least Hugh has the apparent concern to address the problems.

Re: Entrust or Mid Ohio??? - Posted by Joe C. (AR)

Posted by Joe C. (AR) on August 22, 2003 at 12:34:09:

Thanks for all the responses. Your information is very insightful.
Joe C. (AR)

Re: Entrust or Mid Ohio??? - Posted by Ken (NJ)

Posted by Ken (NJ) on August 22, 2003 at 08:44:43:

In reading the posts below, it seems that both have their issues, specifically in cutting checks. Entrust has a program for a self-directed, self administered 401k/profit sharing program. They call it an individual k. It only works for business owners who have no employees other than themself and their spouse. The nice thing about the program is that it is self-administered, so you have the checkbook. There should be no waiting for checks if you write them yourself!

I just signed up for this program and I will see how it goes.

Ken (NJ)

Re: Entrust or Mid Ohio??? - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on August 22, 2003 at 07:04:17:

I have accounts with both Entrust and Mid-Ohio (Equity Trust) and I am looking for a simplified way to get out of the Entrust and put it with Mid-Ohio. I guess that should tell you something about Entrust. I buy notes and partials with my IRAs. Everytime I buy one, I have to call Entrust and explain the whole process to another person. I never have to call Mid-Ohio. I send them a request. They cut a check. That is the way it is supposed to work.

Coming Soon - The Diversified IRA - Posted by William L. Exeter

Posted by William L. Exeter on August 22, 2003 at 01:19:46:

We are just about up and running, so keep Diversified Retirement Services Corporation in mind for your future self-directed IRA needs.

Re: Entrust or Mid Ohio??? - Posted by Ron (MD)

Posted by Ron (MD) on August 21, 2003 at 21:07:59:

Joe,

I’ve been with Entrust for a couple years and will be leaving them soon.

Their administration is weak…and they seem indifferent about it.

I do rehabs in my IRA and I often have to get checks from them to pay contractors. Two years ago, I could fax a request to them and be pretty sure that they would mail it out the same day (and certain that they would mail it by the following day). My last checks didn’t get mailed until the fifth day. When I complained, the explanation was that they’ve grown and now, since they are bigger, they aren’t as responsive…their new performance standard is 3-5 days. Not the kind of explanation a customer likes to hear. Equity Trust (i.e., Mid-Ohio sends out checks within three days).

Another problem is that they only give you a statement quarterly. If you make a special request, they will print out the prior month and fax it to you. I have fairly frequent transactions, so it’s important to me to reconcile monthly…especially since several of my statements have contained errors. When I point out an error to them, they act “put out” by it. Again, not the reaction a customer looks for. Entrust planned to have online statements in June 2002…still not available. Equity Trust has online statements, so you can check your account anytime.

If you have fairly frequent transactions (e.g., issuing checks, etc.), I think Equity Trust’s fees are considerably lower…but you should check that yourself…I’m not 100% certain that’s true.

I think there are also legal differences between the two, where Equity Trust provides better security for your funds.

I’ll be curious to see others’ opinions on the two…maybe I’ve just had a string of lousy luck with Entrust…but I doubt it.

Ron Guy

Re: Entrust or Mid Ohio??? - Posted by Linda Simms

Posted by Linda Simms on August 21, 2003 at 19:11:39:

I have had accounts with Mid Ohio or now Equitly Trust for several years. They do fairly good, but sometimes you have a hard time getting them to understand what you want and getting them to do it. Dick Desich the main guy is OK but he has gotten a little out of line since he has begun to think he is the Guru of IRAs and is offering seminars like any other Guru at a price and not paying too much attention to the customers. Howerver, their prices have been pretty goood although they have gone up, up, up. I do not know anything one way or the other about Entrust, but if their prices and services are competitive I would give certainly give them a good look, and I am getting more and more dissatisfied with Equity Trust.

Re: Entrust or Mid Ohio??? - Posted by Linda Simms

Posted by Linda Simms on August 21, 2003 at 19:09:49:

I have had accounts with Mid Ohio or now Equitly Trust for several years. They do fairly good, but sometimes you have a hard time getting them to understand what you want and getting them to do it. Dick Desich the main guy is OK but he has gotten a little out of line since he has begun to think he is the Guru of IRAs and is offering seminars like any other Guru at a price and not paying too much attention to the customers. Howerver, their prices have been pretty goood although they have gone up, up, up. I do not know anything one way or the other about Entrust, but if their prices and services are competitive I would give certainly give them a good look, and I am getting more and more dissatisfied with Equity Trust.

Thanks for the information - a few questions - Posted by Stephanie

Posted by Stephanie on August 26, 2003 at 08:29:13:

Ron,
This was an excellent thread on IRAs and your experience with Entrust. I do have a few questions that I hope you can answer. I have visited the Entrust and Equity Trust web sites, read all the info they offer on doing deals in the IRA but I still haven’t set up my IRA since no one in the customer service department of either company has adequately answered my questions. I want to do some wholesale and retail rehab deals within a Roth IRA or SEP IRA but am confused as to how to get all the money I need for the deal into the IRA. My understanding is that I am limited to a $3,000 contribution per year in a Roth. Now that is fine if I am only wholesaling a deal to another investor but what about doing a rehab deal. On a rehab I usually need about $40,000 to buy the house and do the repairs. How can I do this if I am only allowed to contribute $3,000. I could lend the money to my IRA but that is illegal according to Equity Trust. They said I could borrow from another source but then I have to pay a UBIT tax (which I don’t fully understand). It seems to me that unless you already have an IRA with a lot of cash in it to cover the purchase and rehab costs, then it may not be possible to do a rehab in the IRA. Any insight you can provide would be appreciated. Also if you do your deals in the IRA, do you have use for any other entities such as LLCs or corporations. How have you structured your business using these entities? I have used a corporation for my rehabs but don’t see the need for one if I use an IRA. Can you draw a salary from your IRA or should I keep my corporation? Sorry this is so long but I am really confused and have been unable to get unbiased advice from Entrust or Equity Trust and my CPA never heard of doing deals in the IRA. Thanks for any help you can offer, you seem very knowledgeable.

Stephanie

Re: Coming Soon - The Diversified IRA - Posted by rm

Posted by rm on August 22, 2003 at 16:43:30:

Based on the posts on this thread, you should have an easy time outshining your competitors.

Re: Entrust or Mid Ohio??? - Posted by Brent_IL

Posted by Brent_IL on August 22, 2003 at 19:22:56:

Ron,

Isn’t it nice when a “valued” customer is told, “we will happily accomodate your move to another vendor.”

Life is short, but condescending attitudes irritate me. I?d put effort into pulling every account I could, including friends, acquaintances, and other folks who respect your judgment. Petty? Yes. Personally satisfying? For me, it?s another yes.

Brent

Ron (MD)- question - Posted by DavidV

Posted by DavidV on August 22, 2003 at 19:04:49:

Hi Ron. E-mail me at SRV@cableone.net I have a question for you off of the board.

David

Re: Entrust or Mid Ohio??? - Posted by Hugh

Posted by Hugh on August 22, 2003 at 12:01:36:

Your account has been with us for many years.
All uninvested funds with all Entrust companies throughout the United States are in FDIC insured accounts. How can you say that others provide better security of your funds? FDIC insurance is the best you can have. It is simply untrue that anyone provides better security.

Although some errors are inevitable, in this case the statements have always reconciled. Sometimes it is a difference of accounting for items from one month to the next. That means, that items may be outstanding over a month or quarter end. If all items clear the account will have no outstanding items, just like your checking account.

We also make sure that ALL fees are disclosed, which others don’t.

As far as service. everyone who has a problem can e-mail management, or call me on my personal cell and discuss any issues at any time.

Re: Entrust or Mid Ohio??? - Posted by Rich Desich

Posted by Rich Desich on August 27, 2003 at 16:32:29:

If I could please I?d like to briefly explain some of the challenges that face those who offer real estate IRA services.

Real Estate investing means so many things to different people. To some real estate investing means single family homes, to others it means mobile homes, while others see it as raw land.

If you can imagine all the different styles and techniques available just on CREonline alone and compound that by all the different rules/forms used by various states and counties around the country (as well as those investments outside of the US) there is really no “standard” investment.

Adding to that complexity are rules and regulations that govern retirement accounts.

All these factors combine make offering real estate IRAs a very challenging service.

Having said that, there are no excuses for mistakes made by those of us who offer the service. But mistakes will inevitable occur in a complex environment. What defines a company is how they respond to those mistakes.

Speaking for Equity Trust I can tell you that we place client service as our highest priority. We have a dedicated staff that works extremely hard to make sure things go right (which they do the vast majority of the time)and when they don?t they do whatever is necessary to address any issues that might have occurred.

As a firm we are constantly working to provide the best service possible to our clients.

To that end I would be more than happy to speak to any member of the CREOnline community on any topic with regard to our firm or self directed IRAs in general.

I can be reached at (440) 323 5491 (extension 109)

Re: Thanks for the information - a few questions - Posted by Ron (MD)

Posted by Ron (MD) on August 28, 2003 at 19:59:19:

Stephanie,

UBIT is a big problem in a Roth. If you need $40k for a rehab, but have to borrow 90% of that…then 90% of the profit is subject to the UBIT (Unrelated Business Income Tax), which is 39.6%…kind of takes the fun out of doing a deal in a Roth.

Also, it is hard for the IRA to even get a loan. You can’t lend to it (it’s against the rules). You can’t personally guarantee the loan. The IRA can borrow the money, but it has to be a non-recourse loan, meaning that the only collateral is the house being financed.

When I buy houses inside my IRA, I put them into a land trust, but there is no other entity (e.g., LLC, etc.) Again, the UBIT comes into play. If your Roth owns an entity (e.g., a corp, etc.), the profits from the entity are tax free to the Roth…if the entity has already paid income tax on it’s profits. So, if your Roth owns a c corp, the corp pays regular income taxes on its profit, then the Roth gets what’s left…tax free. However, if the Roth owns an entity that is a pass-through entity (e.g., an LLC), then that entity doesn’t pay taxes…all profits “pass through” the the owner (i.e., the Roth). If this happens, then the Roth has to pay UBIT on the income that was passed through to it, without first paying taxes.

Bottom line, you have to be careful of the UBIT. When I first set up my IRA with Entrust (a couple years ago), the customer service rep at Mid-Ohio never mentioned UBIT…but the Entrust rep did. It’s important that you talk with someone knowledgeable about things like UBIT.

I said I put my IRA properties in a land trust (one property per trust). This increases my privacy (the public record shows the trust as the owner, rather than "Entrust Administration for the benefit of Ronald Guy account #XXXXX). Also, it may provide some separation among the properties within my IRA if there is a lawsuit related to one property.

Finally, you can draw a reasonable salary from your IRA for services rendered…however, you generally don’t want to do that. As you’ve figured out, it’s hard to get capital into the IRA, so you want to avoid draining it out through a salary.

Ron Guy

Re: Coming Soon - The Diversified IRA - Posted by William L. Exeter

Posted by William L. Exeter on August 22, 2003 at 17:31:19:

Thank you for your kind comments. We look forward to continuing to support this thread and working with the investors.

Bill Exeter

Re: Coming Soon - The Diversified IRA - Posted by William L. Exeter

Posted by William L. Exeter on August 22, 2003 at 17:22:29:

Thank you for your kind comments. We look forward to continuing to support this thread and working with the investors.

Bill Exeter