WS224: The Advantages Of Working With A Self-Directed IRA Custodian with Joey Eplite

RES 224 | Self-Directed IRA

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Investing through an SDIRA or self-directed IRA, your asset’s earnings can have a built-in tax break. Undergoing this kind of investment can be a tedious process which is why a self-directed custodian like Joey Eplite exists. Joey is a finance student at the University of Central Florida and a NuView consultant. He has helped many to invest in real estate with the IRA for tax-free growth. Joey talks about the benefits of using the services of an SDIRA custodian, the best time to contact a custodian, and what SDIRA custodians can offer that differs from other custodians.

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The Advantages Of Working With A Self-Directed IRA Custodian with Joey Eplite

Our guest is Joey Eplite. Thanks for being on the show, Joey.

It’s my pleasure. Thanks for having me.

Joey is a finance student at the University of Central Florida. He has helped hundreds invest in real estate and other alternatives with their IRA for tax-free growth. He has helped many in real estate syndication access IRA funds for real estate syndication deals. Joey, thank you again for being on the show. This is an important topic when you’re in the syndication business. I’m looking forward to weighing out the relationship between an IRA custodian or somebody like yourself and to somebody that’s a deal sponsor, and the things that a passive investor needs to know when using their IRA. First, give the audience a little bit more about who you are, what your focus is and how long you’ve been in the IRA business.

I’m still at the University of Central Florida pursuing a degree in finance. My primary interest in growing my wealth is going to be through real estate investing. That’s how I got involved with self-directed IRAs. I expressed my interest to my accounting professor. She pointed me to Glen Mather who’s the Owner and Founder of NuView Trust. I met up with him. It took me a little bit to grasp the concept of self-directed IRAs because it’s something that’s not spoken about a lot. I fell in love with the concept as soon as I heard about it. I went in with both feet. I’ve been with NuView for a few years assisting investors in taking their IRA out of the stock market and putting into alternatives like real estate.

I’d like for us to focus on that relationship between the syndicator and somebody like yourself that’s an IRA custodian. Is that a proper term for you?

I would say self-directed IRA custodian.

RES 224 | Self-Directed IRA
Self-Directed IRA: A lot of custodians are very passive and they’re very mechanical in the way that they operate.

Let’s talk about what that should look like. When should a sponsor contact somebody like yourself?

Typically, a sponsor will reach out to us. They’ve heard about the IRA component or accessing retirement funds for a real estate investment. They want to see what the custodian has to offer as far as having investors that already use their IRA to fund their deal. As a passive third-party custodian, we can’t solicit any investments and we can’t recommend or endorse any investments to our clients. The way that we offer our relationship to the syndicator is we have client networking events to get in front of our clients and mix and mingle with them. Be a point of contact for them for any of their subsequent investors that would like to use their IRA for the offering.

Let’s say I am doing numerous deals. I figured out I need to have some type of way for investors to use their IRA. Would it be beneficial to contact you before I have a deal or does it matter if I’m in the middle of one right now?

It’s a lot better to do it ahead of time due to the timeframes with transferring IRA money over to a custodian and processing the paperwork for the alternative investments. Since we have to keep everything in record and straightforward, it’s best to establish a relationship with a self-directed IRA custodian ahead of time. It’s going to help you learn about who you want to have that relationship with, depending on which custodian you choose and what they have to offer. It’s important to see what they’re going to offer you as far as the relationship standpoint so that you can have success in your real estate syndications.

What are some different things that a custodian could offer that we need to know about and that would differ from you to another custodian?

A lot of custodians are very passive. They’re very mechanical in the way that they operate. You just need to supply them with the paperwork. They will facilitate the transaction. They’re not going to take the time to get to know you for who they are and how they can help and offer more than facilitating a transaction for them. A good piece that you should look for in a self-directed IRA custodian is one that’s relationship oriented. In NuView Trust, we’re relationship-oriented here and that’s how we offer a relationship for those that are raising capital. We can have a direct point of contact that’s dedicated to the real estate syndicator. That way, when they’re bringing over any subsequent investor that wants to use their IRA, it’s a straightforward process. They’re always going to be able to reach someone.

[bctt tweet=”One relationship leads to another.” via=”no”]

You want to ask an IRA custodian if they do any events that their clients are going to be at. Most of the IRA custodians don’t have any events like that. We do quarterly client networking events that our clients attend. We have sponsors for those events as well. That’s a way for us as a passive third-party custodian to get investors and get people offering products in front of each other in the same room since we can’t promote, solicit or endorse. We also stay in contact about, “What conferences are you attending? You ought to go to this conference over in Seattle, the PNWC Conference. That might be advantageous for you.” That’s how we offer a relationship for the real estate syndicators.

Let’s go through that timeline or relationship a little bit. Let’s say I have a deal. You and I have talked and I have an investor that says, “I’m going to invest with my IRA.” They’re going to contact you. Walk me through that a little bit. What’s going to happen with them? What do they need to know? Some of the things that are going to make this go more smoothly.

When the syndicator is contacting the IRA custodian to facilitate the transaction, they’re going to need to know what documents they need to provide us with to facilitate the transaction. I would ask, “Are there any disqualified parties involved with this transaction? What’s the deal going to be structured like? Is this an equity offering or investment into an LLC? Is there going to be a loan for this offering? How is it going to be structured?” That way, we can pull all the correct documentation together ahead of time before opening the account. Once the investor opens their IRA to fund the deal, they already have the operating agreement for the LLC in place, for example, to provide the IRA custodian. They will be able to fill out the corresponding purchase form with the IRA custodian to facilitate the transaction. All of the paperwork is in place from the first point of contact and everyone knows what they need to bring to the table as far as documentation goes. That’s going to make it go as smooth as possible.

Can I have all that documentation done but not bring my money out of their original place that it’s in or however it’s invested in my IRA? Can I have all this done? When I’m ready to invest in some real estate syndication and I’ve got all this set up with you, I can say, “I’m ready to do this.” Can I wait until the end to move that money?

The best thing to do is at least get the self-directed accounts set up and get together all of the documentation that you’re going to need for the transaction. Typically, it’s going to be LLC operating agreements. Since its investor is going into an LLC, the custodian is going to need to see an operating agreement or a subscription agreement for the entity. It’s best to get everything set up ahead of time. When you’re ready to pull the trigger with investing into the syndication deal, all you need to do is submit a transfer request to your current IRA custodian for them to transfer us the funds. Most custodians will pre-process the transaction for you. If you give them the LLC operating agreement ahead of time before you even have funds in your self-directed IRA for the transaction, all of the transaction paperwork is already going to be reviewed ahead of time. When the funds get to NuView from another IRA custodian, we could just pull the trigger and send the funds out for the investment.

Take us through that timeline. How long does it normally take? Should I set aside time as an investor or even as a syndicator to expect funds to be transferred?

RES 224 | Self-Directed IRA
Self-Directed IRA: The bigger the IRA custodian, the more mechanical the firm is going to operate.

It depends as far as getting the account set up and funded for an investment. Accounts are set up at NuView within 24 hours and transferring funds from an IRA custodian to another IRA custodian like NuView. It depends on the custodian that’s sending the funds. There are time frames. We will send the transfer requests out within 24 hours of receiving it and the ball is in the other custodian’s court to hand over the money to NuView. It takes around five to ten business days. That’s usually what I get as an estimate, but it could be as little as two to three days. It will make it a lot quicker if you contact your current custodian and let them know, “I sent you a transfer form to transfer some money. Can you expedite this?” Typically, they will transfer the funds over within a few days to your self-directed IRA.

What about fees? What is this going to cost us?

Account opening fee is $50. We have a $95 transaction fee for any purchase or sale of an asset. When we’re sending funds over to the LLC for the syndication deal, it’s $95. There are two options for our annual fee schedule. It can either be based on your total account value or it can be a flat fee of $295 a year per investment. If you’re opening your IRA and you want to get into one syndicate deal with your IRA, it would be a flat fee of $295 a year from the anniversary of the investment. That’s going to be the cost, $50 to open, $95 to funds and $295 a year.

How does a custodian make money?

The custodians make money by the flat fees that they charge. They don’t take a percentage of any of the investments in the form of a commission or anything. We’re getting fees from our self-directed IRA service and asset maintenance. We have a little bit over 8,000 clients and $1.2 billion worth in client assets under management. We get clients who are performing transactions all the time, purchases and sales of all types of investments. That will face our $95 transaction fee. That $295 a year fee, that’s per investment based. If you were invested into two LLCs with your IRA, it would be $295 a year times two. That’s how the self-directed IRA custodian is going to make money. Some will have other fees for tax reporting and such. Our tax reporting fees reporting to the IRS is included in our annual fee of $295 a year.

What are some questions that I need to ask my custodian as a passive investor? How are they going to differentiate themselves from another custodian? What do I need to be asking them so I know this is somebody I want to work with?

[bctt tweet=”The greatest part of any business all comes down to relationships.” via=”no”]

I would ask them what is their experience with holding LLCs or real estate because some custodians might specialize in one thing over the other. I would ask them how long they have been around in the industry performing alternative investment custody. Sometimes you might be talking to an IRA administrator that’s performing the administrative work on behalf of another trust company that holds the assets. We have NuView IRA and NuView Trust. NuView Trust is the custodial bank for NuView IRA. NuView IRA does all the administrating and servicing for the retirement account. Everything’s under one roof. Some self-directed IRA custodians still advertise themselves as self-directed IRA custodians, but they’re using a third-party trust company to take custody of it.

It will make things go a lot smoother if everything is under one roof. I would also ask how many people are employed at the self-directed IRA custodian. The bigger the IRA custodian, the more mechanical the firm is going to operate. Some people might not be available to speak with when you would like to speak with them. Here at NuView, we have a little bit over 40 employees and we’re able to service over 8,000 clients. We’re able to offer more of personal service for our clients compared to other IRA custodians. You want to make sure that the IRA custodian you’re going to work with is going to be able to stay in contact with you and answer the phone when you need them because after all, it is your retirement account.

What’s going to be some common questions that you get from an individual that’s chosen to invest in a syndication deal?

It’s a brand-new concept to them when they find out that they can use their IRA for the offering. They know that there are some rules and guidelines. They want to know what the rules are. “What can I do? What can I not do? Am I able to even participate in this specific syndication deal with my IRA?” My primary role is educating and assisting with the onboarding of clients that have invested into the LLC. I will cover all of the education that’s needed for the client to move forward with their investment. They will ask, “Can I invest in this LLC? This is the name of it. Do you take custody of it? This is how it’s going to be structured. Can we do this? How long does it take to fund?” Also the costs.

You mentioned earlier about the structuring of the deal. You’re going to need to know the structure. Why is that important?

It’s important because if there are multiple investors going to the same deal, we want to make sure that we have the correct paperwork in hand before placed. When the investors arrive and suffice with the operating agreement, we can already have it approved on our platform and ready to go to send the funds out. That would be a reason to get everything together beforehand. We need to know if we’re able to facilitate the transaction. We need the operating agreement because we need to see who is involved in the LLC. We’ll know that there are some disqualified parties involved and so forth. It’s all about reviewing the documents and making sure that everything is within the IRS guidelines at that point.

RES 224 | Self-Directed IRA
Self-Directed IRA: Networking and attending conferences and REOs, that’s where you can have the most success.

It is serving as another security level, another eye on the documents or some more eyes. How involved can you be with the investor to say, “I don’t know about this offering or this looks a lot different than we normally see.”

As long as the LLC is a legally registered entity and it has an EIN, we’re going to be able to fund that LLC with IRA money. When the document gets to our transactions team and they are in the process of reviewing the operating agreement or subscription agreement, they’re going to make sure that there are no disqualified parties involved in the transaction. If there is, it would be a taxable event. We won’t even facilitate the transaction if it is going to cause a taxable event.

As a passive investor or a deal sponsor, what else should I be asking you that I haven’t asked you?

I would ask them if they can have a direct point of contact as far as sending investors goes. You want it to be an easy process for the investor as well. You want them to be comfortable with using their IRA money to participate in your syndication. It’s going to be very important that you have a solid direct point of contact at the IRA custodian that’s going to make the investor feel comfortable with the transaction and go forward with it.

What’s the hardest part of this whole process or transaction?

The hardest part of this process is getting the funds from the current IRA custodian and transfer it over to the self-directed IRA custodian. You would think that the most difficult part of this is going to be funding the transaction. That process is pretty straightforward. The processing time here at NuView for that is two business days. The other IRA custodians like Morgan Stanley, Schwab, or Fidelity don’t like seeing money under management to leave. They will sit on your transfer requests for as long as they possibly can before they released the funds over to NuView. That’s the hardest part because sometimes it impedes the process if there’s a specific closing day and they reject the transfer form for whatever reason. If you didn’t dot your I’s and you didn’t cross your T’s, they will reject the transfer request. You’re going to have to request the transfer be sent all over again. That’s the hardest part of the whole process. If everything is done right in the first place, it’s pretty smooth but it is tough to transfer money from an IRA from one place to another.

[bctt tweet=”It’s important it to serve others and most importantly, our clients.” via=”no”]

What’s been the one thing that’s contributed to your success this far?

It’s the networking that I’ve been able to do here while I’m at NuView. Being at UCF, there are a lot of networking opportunities there. It’s being involved here at NuView, attending all these conferences and all these REIAs, real estate investment associations all over Florida, and we’re expanding all over the nation as well. That’s where we have had the most success and has contributed to my success as well. One relationship leads to another. That’s the greatest part about this business. It all comes down to relationships.

What’s a way that you’ve improved your business that we can apply to ours? Anything you’re doing to improve your business. Maybe it’s even being on podcasts or anything you’re doing to increase your business.

We’ve started focusing on being the number one provider of education when it comes to self-direction. Podcasts are something that we started focusing on more and also webinars and in-house educational classes right here in our office in Central Florida. Every other week, we started hosting an in-house educational event for our clients to get to know more about self-direction. We also have guest speakers come into our office as well to talk about specific investments that are possible to do with your IRA. That has helped us expand throughout the community. We also broadcast those educational events on our Facebook page as well. We are starting to do webinars weekly as well as podcasts. We’ve been reaching out to people that host podcasts and getting on their show. We hope to start our own podcast soon and get a nice room set up with some microphones, headphones, and have fun with it. That has been the number one thing that we’re focusing on, expanding it through podcasts, webinars and in-house educational events.

Is there a way that you like to give back?

Here at NuView, one of our core values is serving others. We found our own charity called Chair the Love. We donate wheelchairs to those that are in need over in third-world countries. I know Jason and Glen, a lot of the missions that we go on for that, they will go out and take hundreds of wheelchairs over to Ecuador for example. They will go to a school there or a small part of the community and those people need help. They can’t even get access to a walking cane. It’s touching for us to go over there and be able to put them and wheel them over in a wheelchair and see the joy on their face when they receive that. It makes an impact on us as an organization as far as servicing goes. We realize how important it is to serve others and most importantly, our clients.

That’s a great mission. They definitely need a guide that are concerned with them in that way. Joey, how can the audience get in touch with you and learn more about what you’re doing?

I can be contacted anytime right out my desk. My number is (407) 519-9175 or you can email me directly at [email protected]. I can be reached anytime and you can also visit our website as well as contact our office.

Joey, thank you very much for being on the show. I appreciate your time, expertise and experience. I appreciate you sharing how we can use our IRA, if we’re a passive investor, if we’re a deal sponsor, what that should look like, and working with somebody like yourself that’s a custodian. I hope the audience will reach out to you as they need that as a passive investor or as a sponsor. I hope you all will go to Life Bridge Capital and connect with me. I’m happy to help you in any way I can if you sign up on there. You can also go to our Facebook group, The Real Estate Syndication Show. We can all learn and grow our businesses together from experts like Joey. I hope you’re sharing the show. I will greatly appreciate it.

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About Joey Eplite

RES 224 | Self-Directed IRAJoey Eplite is an IRA expert at NuView Trust Company, a Self-Directed IRA Custodian in central Florida. In pursuance of a bachelors degree in Finance with an interest to grow his money in Real Estate, Joey got involved with NuView Trust to learn how to grow Real Estate investments including syndications of all kinds tax-free, as well as educate and assist other’s on how to use their retirement funds in order to purchase Real Estate and take advantage of retirement accounts when syndicating deals while staying within the IRS Rules and Regulations.

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