Self Directed Ira's

There are a million posts about self directed IRA's already online. Most people by now already know what a self directed Ira is, but if you don't, here is a simple definition.

A self directed Ira is by definition an Ira account where you can make investments in non-publicly traded investment vehicles. Instead of being limited to stocks, bonds, mutual funds, etc., you can buy real estate, invest in tax liens, private placements, and much more.

So, what can't you invest in?

The IRS defines a prohibited transaction as follows: "Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of lineal descendant)."--Source IRS Publication 590

In other words, you can't make loans to yourself, your family, or buy real estate for personal use.

Why use a self directed IRA?

The number one reason for a self directed Ira is to invest in Real Estate. You can buy rental property, make high yielding loans on real estate to others, (deeds of trust), and of course join the millions of others in America making high returns in the fix and flip market.

How do I choose a self directed IRA company?

Although there are many to choose from in today's crowded market, I still prefer to go with companies that have been doing this the longest and offer the lowest fees. The annual fees and per investment fees can really get you so it is important to do your own research. I've found the following companies to be the best in my experience.

Equity Trust: http://www.trustetc.com/

Pensco: http://www.penscotrust.com/

Sterling Trust: http://www.sterling-trust.com/

How do I find good investment options for my self directed Ira?

My company offers deeds of trust and we work with a number of successful real estate operators who are looking for partners. Please review our website for more information.

www.equitycoalition.com

To learn more about self directed Ira's, I suggest going directly to one of the 3 Ira company links I posted above. There you will find lots of explanations and tutorials on self directed Ira's.

To your Wealth!

Russell Roesner

Equity Coalition President

San Francisco, CA 94121

415 680 3454

http://www.equitycoalition.com/

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Raising Money for Structured Real Estate Deals

As I'm sure you know by now, my focus is creating structured bridge financial transactions for real estate investors. This article will attempt to explain common industry terms and how a deal is structured. I can't count how many times I hear the term investor used to describe 3 different players in the same transaction. For example, is the investor the equity participant, is it the lender, or is it the real estate operator setting up the deal? Let's go through it step by step by describing a typical transaction.

Sponsor: The company or individual who is looking to raise money and has identified the real estate to be purchased or improved.
Investor: The money partner, sometimes an individual, sometimes a company, (private equity group) who is putting up the cash above and beyond leveraged or bank money. However, if 100% of the money needed to complete the project is debt, then the term investor might be used to describe the lender or debt partner.
Lender/Debt partner: The institution putting up the loan.
Structured Financial Transaction: Any deal structure where debt and equity are both used together to finance a deal.
Debt: The capital piece structured as a loan. It could be based on a percentage of purchase price (LTV or loan to value basis) , the future value once the project is finished, or it might be based on the cost to purchase in combination with the improvement costs and project expenses (LTC or Loan to cost)

The most asked question I hear is, “What does the equity share partner want in return for their money?” There are an infinite number of ways to structure a deal but I'm going to explain the two most common ways to calculate that number.
Pari Passu: Example 1: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.
Use Of Funds: $595,000 purchase price*$250,000 for rehabilitation*$90,000 for Real Estate Broker Fees*$15,000 for mortgage brokerage fees*$25,000 for interest reserves*$25,000 for legal costs. Let’s say the sponsor has secured a $600,000 loan and put up personal guarantees for that loan. There is now $400,000 still needed to cover the project.
If an investor brought in $200,000 total and the sponsor put in 200k of his own money, then the deal would be split 80/20. 80% going to the sponsor and 20% going to the investor. 600k bank loan credited to sponsor. 200k credited to sponsor. 200k credited to investor = 80% to the sponsor and 20% to the investor.
Pari Passu: Example 2: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.

Use Of Funds: $595,000 purchase price*$250,000 for rehabilitation*$90,000 for Real Estate Broker Fees*$15,000 for mortgage brokerage fees*$25,000 for interest reserves*$25,000 for legal costs. Let’s say the sponsor has secured a $600,000 loan and put up personal guarantees for that loan. There is now $400,000 still needed to cover the project.
If an investor brought in the 200k and the sponsor brought in 200k, the deal would be split 50/50. Why the big discrepancy? Some investors count debt brought into a deal as money contributed by the sponsor while others do not. In this example, the 400k remaining gets 100% of the deal so 200k equals 50% of the deal and the sponsor and investor split the deal 50/50.

Understanding the subtle deal points and perspective of both sides of a deal empower both an investor and a sponsor. If you are providing the service of helping raise capital for your clients, you earn your commission and placement fees by helping structure the transaction through understanding the deal points.

Preferred Return: Many sponsors offer a preferred return to their investors based on an annual percentage. This is the investors guarantee. All profits beyond the preferred return can be sliced and diced based on negotiation. Some sponsors keep 100% of those profits. Some do a split.

There again are many more deal points when structuring a real estate investment but the Pari Passu and Preferred return examples are a great place to start. Remember, if a sponsor is looking for investment capital and is asking for more than a lender will loan, typically more than 60% LTV or LTC, then the investor who brings money to the table to bridge that gap deserves a higher return than the bank. If the sponsor is asking for equity, they will have to pay for it.

To your Wealth!

Russell Roesner

Equity Coalition President

San Francisco, CA 94121

415 680 3454

http://www.equitycoalition.com/

Linkedin Profile

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Speed up your computer-Really!

I'm not a tech blogger but I found something so unbelievably helpful to my business, I had to share it. Up until now, I thought that the speed of my internet connection and ram were the main factors in how fast a web page would load. Friends, this is not so! The browser you choose to use is big factor and some hog more memory than others.

Each browser comes free and with default settings. Just out of the box, here are the rankings from my research. From fastest to slowest on average:

• Safari
• Opera
• Chrome
  
• Internet Explorer
• Firefox

I know there are other browsers out there but these have all the add-on stuff we want and are the most supported. If you are in business online for whatever reason, you need your browser to work quickly. I never knew you could get into the code of your browser and make it faster and customize it easily. Now, here is the tip of the year as far as I'm concerned. The following link will take you the MakeTechEasier website to configure Firefox. I followed their easy directions to make Firefox faster. The result?

After reconfiguring Firefox following the FREE directions, not only does Firefox run 5 times faster, but my entire computer runs faster and so does Internet Explorer. Maybe I just got lucky, but using MakeTechEasier to make one browser faster seemed to speed up all the programs on my computer in general since all browsers take up so much of your operating system resources.

This will take you 10 minutes. As a disclaimer, I do not work for or advertise for any company I promote on my blog. Using their configuration tricks, I've just made my business much more efficient.

I hope this helps you as much as it helped me.

To Your Wealth!

Russell Roesner
Equity Coalition President
San Francisco, CA 94121
415 680 3454
www.equitycoalition.com
Linkedin Profile
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MAKE IT EASIER TO PROSPECT ON SOCIAL NETWORKS: USE SIGNATURES AND A TEXT GRABBING TOOL

We all should be using business and social networks to be prospecting for investors and clients but once you find someone or they find you, it can be difficult to exchange contact information and tedious to use webmail within the social/business networking system.

Do you find the WEBMAIL interface on Linkedin or other networking sites to be inefficient, the inbox search function to be terrible, find it tedious to constantly ask people for their contact info or give them yours, and just don't have time to add people to your contact database? Here are some tips!

1. First and foremost, always include your signature in every single email you send out to anyone you ever want to hear from again. A default signature can be created in any email program you use whether it is Outlook, Gmail, Yahoo Mail, etc. It is 2010 and I receive business emails every single day from people who do not have their contact information at the bottom of their message. Not only do I find it frustrating but I immediately question their level of competency as a business person. Be professional and use a signature!
2. Every word processing program such as MS word has a multiple item clipboard today. Always have a customized signature available on your clipboard with not only your contact info, but a message stating: "To insure we can continue to build a valuable business relationship, please include your contact information when you respond to me." Keep your clipboard minimized all day as you work and have the signature available to paste into every social and business networking outbound message you send. (We are all in a hurry and don’t want to type it all in replying for instance to a message on Linkedin) Since these sites don’t want you to leave, you have to make an effort to communicate offline and they know that. Beat them at their own game!
3. If you don't have a signature and text grabbing tool, its time to get started. I use a great time saving free software program called copy2contact which lets you grab, review, and save new contacts and appointments in just seconds. It works with Salesforce, Blackberry, Outlook, NetSuite, and Palm Desktop. Linkedin also has free productivity tools where you can get a text grabber, and create a beautiful signature with professional graphics. I think these free tools are an EXCELLENT free find! Click on the "tools" link at the bottom of any Linkedin page to find them another time.
4. I have all my webmail on Linkedin filtered and forwarded to a folder called Linkedin within Outlook so I can grab peoples signatures and send my signature whenever I reply.

IT IS TIME FOR THE MADNESS TO STOP! PLEASE INCLUDE YOUR CONTACT INFO/SIGNATURE IN EVERY MESSAGE YOU SEND OUT ON BUSINESS NETWORKING SITES AND ON ANY EMAIL YOU SEND!

If you have other tips to add, please be my guest. Please consider becoming a follower of my blog as well.

To your wealth!
Russell Roesner *President*Equity Coalition*415 680 3454*San Francisco, CA

Linkedin Profile

http://www.equitycoalition.com/
http://findinginvestors.blogspot.com/

How to appear Legitimate in Todays Market

In today's world and yesterday's world too, a large part of business success has rested on the old saying that "Its perception over reality." If you are trying to raise capital or for that matter do any other form of business these days, you have to pay attention to how others perceive you by your online presence. This article goes over the basics of how you can legitimize yourself or at least not sabotage yourself by appearing professional online.

Email: I receive a number of people sending me opportunities to invest or financing inquiries from people with email addresses ending in Yahoo, Google, Hotmail, etc. If your email address is not connected to your own domain name, it shows me that you are probably working from home and have not developed your company enough for me to take you that seriously. To take it a step further, if you are using web mail, then it means you don't have a website either.

Domain Email: You don't even need a website to have a domain name and email service. I use namecheap. For $9.69 year, I can register a domain name. For $3.95 a month, I can have an email only account with up to 10 mailboxes using my own domain name. It is easy and takes an hour, even for a beginner. Go-daddy and Laughing Squid have similar plans.

Website: As I often do, I'm going to tell it like it is........If you don't have a website you do not have a company today and you will not be taken seriously by people you contact. An adequate website can be created in half a day with many web-hosting companies. Network Solutions has a program called image cafe where you can choose from 100s of canned website templates depending on your business focus. If you can use Microsoft word, you can do this. Many people without a website think they have to hire a web designer and spend months planning it out. I was one of those people 2 years ago. Let me give you a simple tip. Start off with a simple website, even if its just one page functioning like an online business card. You can build upon it over time. The point I want to drive home is that having your own URL and website is required today and is very easy to do.

Linkedin: When someone contacts me for the first time via email, Linkedin, or even a phone call, I look them up on Linkedin. It is absolutely essential you create a rich Linkedin profile about yourself. When someone I don't know does not have a detailed Linkedin profile or no links out to a website, I move on.

Again, its about perception over reality. You may not be a big company but if you have a website, a real email account with your domain name, and a rich and detailed Linkedin profile, you create an air of legitimacy that will help you win business and gain clients in today's market.

To your Wealth!

Russell Roesner, President
Equity Coalition
2440 Cabrillo Street
San Francisco, CA 94121
415 680 3454
www.equitycoalition.com
Linkedin Profile
Blog

Update about Linkedin

From by previous articles, I've shared how to market for investors and business on Linkedin. I hope that by now you have built up your Linkedin contacts using these techniques.

I left out a key tip that is extremely important. Did you know you can export your contacts on Linkedin to a CSV file and import contact names and email address' directly into Outlook or any other email program?

Sending messages to your connections on Linkedin is extremely time consuming because you have to manually checkmark each name you want to send a message and are limited to 50 messages at a time. The drawback here aside from the time it takes is that many great contacts do not check their Linkedin messages very often. However, the opposite holds true as well because some people will not open your message directly through a regular email but may open it on Linkedin.

My suggestion is to use both techniques when you have a marketing piece to share with your contacts.

How do you export your Linkedin Contacts?

1) Click on the contacts tab on the left of your profile page.
2) Go to the bottom and in VERY small type is a link that says "export contacts"

The rest is self explanatory.

To your Wealth!

Russell Roesner
http://www.equitycoalition.com/

Know your Audience

I receive investment opportunities via email and especially through Linkedin everyday. I would say that 90% of the people asking me for money didn't take 5 minutes to read my profile or do any research on my firm at all before they asked me to help them.

The number one offense in asking for money is to approach someone about an opportunity they clearly have told you they do not want. All one has to do is usually google a firm or managing partner's name to find their profile on Linkedin or their own website.

If you are raising capital for renewable energy or films, and you approach a firm that exclusively funds high tech or real estate, you not only will most likely receive no response, but you will be mentally noted as someone who does not know what they are doing. Almost every investor I know has an elephantine memory for the names of those that approached them with bad ideas, wrong ideas, or inept presentations.

Never spam on business sites like Linkedin. You will be remembered by the few people on Earth who might have the money to fund your deal as someone they do not want to do business with. I've had fund managers remember me from 5 minute phone conversations or emails going back 7 years and they base their time and interest in me on that phone call or email.

My positive advice to you is to always research your prospect or company. The more homework you do, the more likely you will be successful today and the less likely you will close a door that could have been open in someone who could help you in the future.

To your Wealth!

Russell Roesner
http://www.equitycoalition.com/