You would be treating your investors to well. The people that you want to attract are those that are looking for above market returns with little risk. Offer to much and they will be more skeptical. Find one that has more money then work with him for a participatory profit.
Have you seen the ads of the stock brokers for roll over accounts? These are the people you want to get to. Unfortunately, you can’t advertize like they can since you don’t have the securities license, the budget nor the product. Most people have IRA’s in the 20-30K range if any unless they did a roll over. There are the retirement planning seminars, the industry retiremant publication or even flea markets. Then there is networking.
You cannot access investors IRA accounts, but they can, if they have a self directed IRA acct, standard or Roth, with an IRS approved custodian. If so, they can direct the custodian, with some exceptions to invest their IRA funds with your investment opportunity, if it meets the criterion. If they have a self directed IRA, this is a relatively easy process and funds can be invested if just a few days. However, if they have such an account, they are likely to be experienced investors and know what returns and security they can expect on their investments. You will probably have to have a substantially good investment that can be verified to get them to do it. We use our IRAs to make investments. What type of investment and what are the particulars you have in mind? We may be able to help. E-mail us. For background try www.mid-ohio-securities.com.
Re: How do you access investors IRA accounts? - Posted by LennWa
Posted by LennWa on December 05, 1999 at 23:58:50:
Tony:
You may very well know there is more to an IRA than at first glance.
The investors that will be able to invest in Real Estate with an IRA must have the type labeled Self Directed. If you take funds from another type, the investor will have tax and penalties to deal with.
Also read the fine print even in a self directed IRA—others here on the board can add to this. I belive that the investment has to be bought in the name of the IRA — so that if you bought it in a pardnership you would be in violation of the rules of the IRA. I personally have some question as to how an invester could use or profit from an IRA that is not his personal IRA without stepping over the guidelines setup by the US gov. on running an IRA. The owner of the IRA could not take profit from the investment untill he or she reached the correct age to draw out funds.
Just a few things that came to mind for you to consider.
You have a great idea here — How about instead of IRA funds, Find people with bank cds that are getting 3-4% maybe 5% and show them much bigger returns investing in real estate with you.
The New Year is almost here and now is a great time to talk to someone about this because they will be rerolling it back into a new 1 year cd— and just may save them some early withdrawl fees.
Hope this helps.
LennWA
Look under "How to Articles on this web site or click on banner for Mid-Ohio at top of this posting site, or go to the web site we gave you. Mid-Ohio will be happy to tell you all about them.
You are comparing apples with organges. IRAs are Individual Retirement Accounts set up by an individual for income after he or she retires. How much you can contribute yearly and income tax rules vary by type of account, standard or Roth. CDs are normaly Bank or Credit Union Certificates of Deposit that you can invest in at anytime at a set rate of interest. Normally you pay tax on the interest. This is a simplefied answer, but several other rules may apply. The great thing about IRAs is that with a self directed IRA you can invest the money tax free while its in the standard account and defer the tax payment, until you take it out and with a Roth, not owe any tax. You have the control instead of some broker or bank or mutual fund. Churning your IRA funds tax free, gives much more to invest and makes quite a difference in your rate of returns and over all profits. In fact a big difference!!
would you suggest market to people with IRA’s to invest in my Rehab projects? - Posted by Tony James
Posted by Tony James on December 06, 1999 at 11:56:33:
I am a rehab, Flip, and rent properties. I’m looking for a way to get captial fast so I can close deals faster instead of using Mortgage companies…do you think marketing to private investors with IRA’s or CD’s would be a good way of getting investors?
Possibly! Advertise for what you want and what rate of interest, or rate of return you will pay. If you keep it up around 12% to 15% you may get some takers.
How and who would you suggest advertise to? - Posted by Tony James
Posted by Tony James on December 07, 1999 at 09:45:17:
I was thinking more on the lines of 23% yeild. 15% interest only payments on a short term (12-18months)investment. 8% in escrow for prepayed seasoning. 60-70% LTV on the property. Investor gets money in escrow at closing. For example…
$66,900 House Value after fix up
60% LTV
$40,000 Purchase Price (with investors funds)
$3,200 in escrow for prepayments/seasoning
$500.00 12 month payments ($6,000 after year, or at closing)