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                              Residential Real Estate Quickstart Guide
                              Invest in Residential Real Estate with a Self-Directed IRA
                              You	can	invest	in	almost	anything	with	a	truly	self-directed	IRA,	including	residential	real	
                              estate.	Equity	Trust	allows	you	to	take	advantage	of	the	wealth-creating	benefits	of	self-
                              directed	IRAs	(tax-free	profits	and	large	tax	deductions)	by	investing	in	what	you	know.	We	
                              help	our	clients	understand	and	use	the	powerful	advantages	of	self-directed	accounts	by	
                              delivering	education,	innovation	and	a	strong	commitment	to	individual	needs.

                              How it Works:
Contact Us.                       1. Open and Fund IRA
For	more	information	or	              •	 Contribute	to	the	account
to	begin	investing	with	an	           •	 Rollover/transfer	funds	from	another	custodian
Equity	Trust	self-directed	       2. Locate Property and Choose how You Want to Own the Property
account,	contact:
                                      1.	 Purchase	it	100%	
 Salesperson Name                     2.		 Buy	a	percentage	of	it
 Account Executive
                                      3.		 Buy	it	with	debt	financing	(in	the	form	of	a	non-recourse	loan)
 1-888-382-4727 x                 3. Complete Real Estate Direction of Investment (DOI) Form to Request
 email@trustetc.com                  Earnest Money
                                      •	 Make	sure	contract	is	titled	to	IRA,	including	undivided	interest,	
                                          if	applicable

                                  4. Equity Trust Processes Investment and Remits Earnest Money
Equity Trust Company
                                     to Designated Location
Since 1974, Equity Trust
                                  5. Submit Another Real Estate DOI to Request the Remaining
and our affiliates have              Amount of Funds
helped investors through              •	 Send	closing	documents	that	require	signatures
education, innovation,                •		 Include	lender	documents,	if	applicable
and a commitment to               6. Equity Trust Processes Investment and Remits Funds to Seller
understanding individual
                                  7. Property Owned by Your Equity Trust IRA
needs. As a passive self-
directed IRA custodian,
we offer self-directed
                               After the Investment is Complete...
IRAs and small-business                                                       enses f
                                                                                     or Upkee
retirement plans.

                                               $   Self-Directed Account
                                  Investor    Fund Your Equity Trust                                              Your Investment
                                               Self-Directed Account

 Equity Trust Company                                                     co
                                                                                    / Pr o f                      e   st m

                                                                                               i t s f r o m I nv

                    Investing in Residential Real Estate FAQs
                    Q:      Can my self-directed IRA purchase real estate?                 To	sell	a	property,	you	need	to	request	the	original	
                    A:			 Yes,	your	self-directed	IRA	can	purchase	real	                   documents	from	Equity	Trust.	This	is	done	by	
                          estate.	One	of	the	main	advantages	of	a	real	estate	             completing	a	Sale	Direction	of	Investment	form.	
                          IRA	is	that	you	can	apply	your	knowledge	and	                    Once	the	property	has	been	sold,	all	funds	from	
                          invest	in	assets	like	raw	land,	single	family	homes,	            the	sale	must	be	sent	directly	to	Equity	Trust	for	
                          apartments	and	much	more.	However,	please	                       the	benefit	of	your	IRA.	This	ensures	maintenance	
                          be	aware	of	the	following	limitations	that	are	                  of	the	tax-free/deferred	environment.	These	funds	
                          considered	prohibited	transactions:                              will	need	to	be	sent	with	a	payment	coupon	stating	
                                                                                           what	asset	the	payoff	is	for.
                             •		 You	may	not	purchase	a	property	or	interest	
                                 in	a	property	which	is	presently	owned	by	           Q:   What if I don’t have sufficient funds in my
                                 a	disqualified	person	(this	includes	yourself,	           self-directed IRA to purchase the property?
                                 spouse,	ancestor,	lineal	descendant	and	any	
                                 spouse	of	lineal	descendant).	                       A:		 Generally,	you	have	two	options	if	you	can’t	
                                                                                           purchase	a	property	outright	with	your	self-
                             •		 Your	self-directed	IRA	can’t	purchase	real	estate	        directed	IRA:
                                 that	you	own	presently.	
                                                                                           •	 First,	you	can	use	debt-financing	in	the	form	of	a	
                             •		 Your	self-directed	IRA	may	not	purchase	real	                non-recourse	loan,	which	means	if	your	IRA	fails	
                                 estate	owned	by	your	corporation,	partnership	               to	make	payments,	the	lending	institution	can	
                                 or	LLC.                                                      only	come	after	the	property,	not	the	IRA.	Please	
                             •		 You	may	not	live	or	work	in	a	property	that	your	            note:	With	debt	financing	your	IRA	may	incur	
                                 self-directed	IRA	owns	such	as	your	personal	                unrelated	business	income	tax	(UBIT).	
                                 residence,	retirement	home	or	office.                     •	 The	second	possibility	is	purchasing	an	undivided	
                             •		 You	or	disqualified	individuals	cannot	perform	              (or	proportionate)	interest	in	the	property.
                                 work	on	the	property.	All	work	must	be	done	by	
                                 a	third	party.                                       Q:   May I use funds from my self-directed IRA to
                                                                                           renovate property and sell it at a higher price?
                    Q:      How do I title my investment?                             A:		 Yes,	you	can	use	funds	from	your	self-directed	
                    A:	     When	investing	in	residential	real	estate	with	your	           IRA	to	renovate	property	and	sell	it	at	a	higher	
                            IRA,	you	must	ensure	the	correct	titling	of	the	               price.	However,	your	IRA	must	pay	all	expenses	
                            supporting	documentation. The	correct	titling	is:	             associated	with	a	property	that	it	owns,	including	
                            Equity Trust Company Custodian FBO Account Name/               the	renovation	of	the	property.	Furthermore,	all	
                            Account Number IRA.	If	not	titled	correctly,	the	              proceeds	associated	with	the	sale	of	your	IRA’s	
                            processing	of	your	investment	could	be	delayed.	               investment	in	a	renovated	property	must	be	
                                                                                           sent	to	Equity	Trust,	for	the	benefit	of	your	self-
                    Q:      I plan on purchasing a property with my self-                  directed	IRA.	Note:	If	your	IRA	owns	a	percentage	
                            directed IRA that will generate rental income.                 of	the	property,	all	income	and	expenses	are	split	
                            What happens with the rental income and what                   proportionately	(e.g.	If	your	IRA	owns	50%	of	the	
                            happens when I sell the property?                              property,	it	receives	50%	of	the	revenue	and	pays	
                                                                                           50%	of	the	expenses).
                    A:	 All	income	generated	by	a	property	or	the	sale	of	
                        a	property	owned	by	your	IRA	must	return	to	your	
                        IRA	to	retain	the	tax-deferred	or	tax-free	status	of	         Q: What’s Next?
                        the	investment.                                               A:	 Keep	in	mind	that	you	need	to	keep	your	
                            Rental	payments	are	sent	to	Equity	Trust	Company	             personal	funds	separate	from	your	IRA	
                            for	the	benefit	of	your	IRA.	The	checks	or	money	             investment,	whether	depositing	funds	or	
                            orders	are	titled,	“Equity Trust Company Custodian FBO        paying	expenses.	
                            Account Name/Account Number IRA.”	Once	received,	             All	income	must	be	submitted	with	a	deposit	
                            the	checks	or	money	orders	are	deposited	into	your	           coupon.	In	addition,	a	Bill	Pay	DOI,	Recurring	
                            account.	All	checks	must	be	sent	directly	to	Equity	          Bill	Pay	DOI	or	eVANTAGE	Bill	Pay	Wizard	must	
                            Trust	Company	and	include	a	payment	coupon.                   be	used	to	pay	expenses	related	to	your	IRA	

©2011 Equity Trust Company ®. All rights reserved.                                                                                         ET0001.01 Rev. 1/11

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