Today’s REI Classroom Lesson

In today’s Classroom, Jack Shea discusses different approaches to utilizing your Self-Directed IRA.

REI Classroom Summary

From car title loans to real estate commissions, there are various buying strategies that can help your SDIRA grow and set yourself up comfortably for later on in life.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the FlipNerd.com REI classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.

Jack: Hi, my name’s Jack Shea, and I’m hosting the REI class today. I will be talk about some buying strategies for your IRA account to hopefully turbocharge your IRA with some more profitable investments and things that I do and many of my friends and clients do.

Mike: This show is sponsored by passiverental.com.

Jack: My website is jackshearealestate.com. That has information about trusts and options and IRA checkbook control and other information, so take a look at that when you can.
As far as IRA investing, I have my money in a corner bank with a checkbook trust which many thousands of people do and you can do that, and I have talked about that on FlipNerd before. But since I have a rapid access through funds on nights and weekends I can make a deal with, for example, a tradesmen, I buy receivables from tradesmen.
Probably in your town is an air conditioner contractor or certain guys that have not been paid and they don’t have a staff of collection people and their wife probably sends out issue bills. I buy receivables from tradesmen probably for about for a 25% discount. But I don’t exactly buy them at the time, I auction them. I might auction $20,000 worth of receivables for a few hundred dollars from my RB. And then I send out some standard letters and they’re kind of oDesk or Fiverr people or a teenager can send these out, so you can do that too.
Another strategy that I use is buying real estate commissions, realtors commissions. As a licensed broker, I have done that and I’ve been solicited by companies that buy these nationwide. I had already done it, but asked the fellow how does that work? And he explained it to me, which is sort of the way I did it. Only I think my system sold better.
Anyway, typically a realtor has a $4,000 commission. They’ll sell you the commission today for $3,000. It’s sort of like an H&R Block buys the tax return at the moment and they collect it for six weeks later. So usually the deal closes, and if it doesn’t, there are some safeguards you can put for yourself.
The group that buys them nationally I was surprised to find that since I’m only a sample of one, he says that we have a 90% repeat business. So once people start selling their real estate commission they often repeat the process and I introduce some brokers to that that have twelve sales people and they buy most of them, their commission, they’ll sell it today to maybe pay bills, kind of like the tax return people. So you can do that, it’s not complicated, and it cranks up, legally, the return on your IRA account.
Another strategy that you see around your town on billboards and advertisements is car title loans. These are hard money loans where people need a couple thousand dollars for whatever reason, an emergency, and it’s done. I’ve seen offices with car title loans. Well, I knew car title loans. This gives me the car title. How much do you need? I usually know these people. I don’t solicit for that publically. But you probably know some people.
Maybe some of your tradesman, they have an urgent need and they’re willing to pay these 18 and some percent interest. So there’s a few standard procedures that may be passing under your nose, especially with a checkbook IRA, you can act on a Saturday or evening right then and make a deal. The idea is that it could be cold and lonely retirement is crank up that IRA so you’ll have a little more enjoyable future.
So thank you for your time, we will be talking again.

Mike: Passiverental.com is your source for turnkey, done for you rental properties. If you’d like to be an investor and not a landlord, please visit passiverental.com to learn how to purchase cash flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting passiverental.com.
Please note that the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
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Jack Shea
I have been investing in real estate, notes and personal property for over 25 years. I use trusts in every deal: options in many and IRAs and 1031 exchanges whenever possible.