By: Matthew R. Rasche
A lot of people are struggling with how to invest for their retirement. I have had clients come to me and say that their retirement fund has been set back 10 years. They don’t want to work an extra 5 years to re-fund their retirement and are looking for a better way of doing things. I often explain to them how they can use a portion of their retirement funds to invest directly into real estate and bypass Wall Street by using a self directed IRA.
The first concern my clients have is, "I checked with the company that services my IRA and they won’t let me buy real estate. I can only hold stocks, bonds and mutual funds." Most of your typical brokerages will not let you hold Real Estate. Real Estate is considered an "alternative asset" when it comes to retirement accounts. There is a special "Self Directed IRA" which is designed to hold alternative assets; primarily real estate. Not many brokerages offer these types of accounts because they can’t make commission off of anything which isn’t a typical Wall Street product. There are several very good brokerages which offer Self-Directed IRAs for real estate.
Keep in mind that opening a Self-Directed IRA does not mean you have to close your current IRA. You can transfer as much or as little as you want to your new account. For Example, if you have $500,000 in a traditional IRA at XYZ brokerage and you want to invest $150,000 in real estate, you can just leave the other $350,000 at XYZ brokerage and maintain your current assets. However, if you rolled your entire IRA over to a Self-Directed IRA you can still own all the traditional assets you’d like. A self directed IRA has all of the features of a traditional IRA with the added ability to hold alternative assets.
Everyone knows that the closer you get to retirement the less risk should be in your portfolio. Depending on your current needs, you may be looking for long term appreciation or immediate cash flow from a rental property. Working with a good Real Estate Broker and attorney you can clearly define your objective and find a property that meets your needs. Owning cash-flow property in an IRA offers a great stream of revenue which often times can create better cash flow than an annuity or stock dividends.
Just like a traditional IRA, all appreciation and cash flow are tax deferred. Always work closely with the company servicing your Self Directed IRA to ensure compliance during the transaction. If the transaction does not comply with the self Directed IRA requirements it is possible you will lose the tax deferral as well as incur an early tax liability. Due Diligence is the name of the game.
My clients also will say, "I’d love to invest in real estate through a Self Directed IRA but I don’t have enough money to buy an entire property." This is another common concern of many of my clients. A great way to take advantage of Real Estate in a self directed IRA is through Fractional Ownership.
Fractional ownership is a type of situation where multiple investors pool together their funds to make one larger purchase. For Example:
Joe and 4 of his friends each invest $50,000 from their self directed IRAs to buy a $250,000 4-flat rental property. Now Joe and his friends each own a 20% interest in a cash flow property. By pooling together funds and buying properties for cash there is no dilution of returns.
Real Estate is a logical addition to many retirement portfolios for 4 key reasons.
It is totally transparent - Real Estate is a tangible asset and is not subject to the same volatility or vagary many traditional Wall Street products are
It offers strong cash flow - Many income properties are generating between an 8% and 10% annual cash return
It can be acquired at bargain prices - With many landlords needing to liquidate properties, today’s market offers great opportunity to acquire real estate at below-market prices In today’s uncertain economic times, having a portion of your retirement invested in Real Estate will give you greater diversification and greater returns.
It acts as a hedge against inflation - With the fear of inflation looming over the economy, real estate has always acted as a hedge and performed well in times of high inflation
Author Resource:- Matthew R. Rasche is Broker/Principal of Portfolio Real Estate Brokerage, Inc. for more information or to ask any questions please comment below or visit http://www.MyPortfolioRealEstate.com
Credits to: Broker/Agent Social Website
Thursday, September 10, 2009
U.S. Bankruptcy Judge's Ruling Could Change Foreclosure Laws Nationwide
Published on Friday, August 14, 2009, 3:08 PM Last Update: 3 day(s) ago by Kimbrough Gray
Category: All Articles » REO's and Foreclosures
Mortgage Electronic Registration System (MERS) has been used by lenders nationwide to track mortgages via the system's database. Lenders who are members of the program are represented in the enforcement of a promissory note secured by a mortgage. A U.S. Bankruptcy Judge in Nevada ruled earlier this year that MERS could no longer represent lenders foreclosing on homeowners in bankruptcy unless the actual loan document could be produced.
Typically, a mortgage note goes through several iterations of sale to different mortgage lenders, which makes it difficult to produce original loan documentation. When lenders begin foreclosing on homeowners in bankruptcy, the original note is often not available.
MERS is a program that was initiated by several lenders over 20 years ago to simplify the complicated mortgage process. The system is designed to track mortgages and any associated sale of the note via a central database. Over 60 million mortgages are currently monitored by the program. Lenders who are members are represented by MERS throughout the foreclosure process.
Although the bankruptcy judge's ruling presents a roadblock for lenders in the foreclosure process, it is not the first time MERS was challenged in court. The same ruling was handed down in a Florida court; however, the company eventually won on appeal.
For homeowners who owe more than their home is worth, or are unable to pay their mortgage payments, the ruling may only delay proceedings for about a month or more. In attempts to further assist homeowners in default on their mortgage, a Nevada state representative introduced legislation to allow homeowners in financial hardship to ask for arbitration in their mortgage default process. This would overstep service providers like MERS, and require mortgage lenders to be involved, instead.
Even though it was handed down in Nevada, bankruptcy attorneys in other states have voiced appreciation in regards to the ruling. One noted Houston attorney stated that the new law could have a nationwide impact on the ability of lenders to enforce mortgage loans. In addition, it throws some negotiating leverage onto the playing field that was not available before for homeowners in foreclosure going through bankruptcy.
A deluge of complaints have been filed against service providers in regards to aggravating the excessive number of foreclosures initiated in the past two-and-a-half years. On the other hand, MERS argues that its services enable a broader range of home lending options for homebuyers.
The program maintains current mortgage information and ownership, and avoids the astronomical millions associated with recording fees, along with the associated paperwork. MERS officials noted verbiage from one Florida court decision that stated the program was "innovative."
Will the decision hold up? Regardless, as in the Florida case, MERS immediately appealed the judge's decision.
The bigger question, however, is whether the ruling will catch fire in other states. Also, it will be interesting to see if the Nevada statesman's proposed bill will be cause for pause for legislation in other states across the Union.
With all the twists and turns we're seeing in the courts of late, anything could happen.
Ki's company is located in Central Austin. He maintains a website allowing buyers to search for homes in the Austin MLS. He has worked with Austin real estate for almost 10 years. His site has information and graphs on historical interest rates.
For information purposes: Taken from: Broker/Agent Social Website.
Category: All Articles » REO's and Foreclosures
Mortgage Electronic Registration System (MERS) has been used by lenders nationwide to track mortgages via the system's database. Lenders who are members of the program are represented in the enforcement of a promissory note secured by a mortgage. A U.S. Bankruptcy Judge in Nevada ruled earlier this year that MERS could no longer represent lenders foreclosing on homeowners in bankruptcy unless the actual loan document could be produced.
Typically, a mortgage note goes through several iterations of sale to different mortgage lenders, which makes it difficult to produce original loan documentation. When lenders begin foreclosing on homeowners in bankruptcy, the original note is often not available.
MERS is a program that was initiated by several lenders over 20 years ago to simplify the complicated mortgage process. The system is designed to track mortgages and any associated sale of the note via a central database. Over 60 million mortgages are currently monitored by the program. Lenders who are members are represented by MERS throughout the foreclosure process.
Although the bankruptcy judge's ruling presents a roadblock for lenders in the foreclosure process, it is not the first time MERS was challenged in court. The same ruling was handed down in a Florida court; however, the company eventually won on appeal.
For homeowners who owe more than their home is worth, or are unable to pay their mortgage payments, the ruling may only delay proceedings for about a month or more. In attempts to further assist homeowners in default on their mortgage, a Nevada state representative introduced legislation to allow homeowners in financial hardship to ask for arbitration in their mortgage default process. This would overstep service providers like MERS, and require mortgage lenders to be involved, instead.
Even though it was handed down in Nevada, bankruptcy attorneys in other states have voiced appreciation in regards to the ruling. One noted Houston attorney stated that the new law could have a nationwide impact on the ability of lenders to enforce mortgage loans. In addition, it throws some negotiating leverage onto the playing field that was not available before for homeowners in foreclosure going through bankruptcy.
A deluge of complaints have been filed against service providers in regards to aggravating the excessive number of foreclosures initiated in the past two-and-a-half years. On the other hand, MERS argues that its services enable a broader range of home lending options for homebuyers.
The program maintains current mortgage information and ownership, and avoids the astronomical millions associated with recording fees, along with the associated paperwork. MERS officials noted verbiage from one Florida court decision that stated the program was "innovative."
Will the decision hold up? Regardless, as in the Florida case, MERS immediately appealed the judge's decision.
The bigger question, however, is whether the ruling will catch fire in other states. Also, it will be interesting to see if the Nevada statesman's proposed bill will be cause for pause for legislation in other states across the Union.
With all the twists and turns we're seeing in the courts of late, anything could happen.
Ki's company is located in Central Austin. He maintains a website allowing buyers to search for homes in the Austin MLS. He has worked with Austin real estate for almost 10 years. His site has information and graphs on historical interest rates.
For information purposes: Taken from: Broker/Agent Social Website.
Friday, September 4, 2009
How do you react to change?
Managing Your Mind
By: Gillian Butler, Ph. D and Tony Hope, M.D.
By: Gillian Butler, Ph. D and Tony Hope, M.D.
Recognizing that you can change
Different people respond to differently to pressures for change. I like this book because it gives so many examples on how to do things better, and become a better person for yourself, your family, and friends. The authors gave an example of five caricatures, which reflect specific patterns that people use when dealing with change, and/or conflict. They said, there are five caricatures which help us recognized certain elements about how we cope with change by developing a particular style of response. Each of these five styles has both advantages and disadvantages according to them. I am writing them down so you can analyze and see if you follow any of these patterns when reacting to change.
The five caricatures are:
1) The Sage - Is the person who seeks after knowledge and reads all about it.
2) The Traveler – They assumed that because we are constantly on the move, we must be going somewhere.
3) The Drifter – Retire from center stage, give up the struggle, and allow themselves to be carried wherever the current takes them “they go with the flow”.
4) The Ostrich – Has two characteristics: it hides its head in the sand and it has a powerful kick. Refusing to accept the inevitability of change can lead to both of these reactions
5) The Conductor of the Orchestra – They take control and set out to make things happen.
Think about these caricatures to think about whether to enlarge your repertoire of styles for making changes.
On this journey, we can use all that we know to give ourselves more options and better chances of helping ourselves to change.
CONDITIONS for CHANGE:
1. Understand the Present. If there are aspects of the present you do not like, you can start to plan how to change, but if you pretend these aspects do not exist, you will NEVER change.
2. Do NOT be burdened by the Past. The past cannot longer be changed. The past is an information bank from which you can learn. But it is not a web in which you are caught.
3. Accept the Uncertainty of the Future. An attitude of openness and confidence is needed for the future as well as for the past. The future is outside our control, and the unexpected is a continual possibility.
Friday, July 31, 2009
Credit Card New Legislation
I am posting this article for those people who like finance and those who are working in becoming debt free. Our Priority number one should be: staying informed and being awared of APR ratings in credit cards, or any kind of financing. It is important to know how we are going to be financially able to afford paying back, knowing when, and how to accomplish this in a time frame, I believe is important.
These Rights Don't Come for Free
I think Ben Stein is right on track. I believe that people have to use their brains, and start logically thinking if 1 plus to is 1, then 2 plus to 2 must be 4!
I love this Great Nation, there is no other one like AMERICA. Otherwise, people from all over the nations would be going somewhere else to live, to work, to obtain medical benefits, etc. If America is not good, then why so many people choose to come here instead of EU, Cuba, China, Nicaragua, or Venezuela.
Good Article Ben, I like the title, so I am not changing it.
credits to: Ben Stein and yahoo finance
I love this Great Nation, there is no other one like AMERICA. Otherwise, people from all over the nations would be going somewhere else to live, to work, to obtain medical benefits, etc. If America is not good, then why so many people choose to come here instead of EU, Cuba, China, Nicaragua, or Venezuela.
Good Article Ben, I like the title, so I am not changing it.
credits to: Ben Stein and yahoo finance
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