52 of 53 people found the following review helpful:
3.0 out of 5 stars
Informative but not Objective, March 21, 2007
This review is from: How to Invest in Real Estate With Your IRA and 401K & Pay Little or No Taxes (Paperback)
Written by the top officer of Entrust, whose business is to manage self directed IRAs, this book is not to be taken as an objective analysis of the benefits and drawbacks of buying real estate within a self directed IRA. Although never actually lying (I'm sure Entrust's attorneys made sure of that), it avoids the topic of fees and lack of control, that are involved in maintaining any real estate investment within an IRA. It also doesn't mention any of the costs of setting up an LLC with one or more members. Setting up an LLC is a likely scenario and was, in fact, recommended to me, by Entrust. Buying real estate within an IRA is very different than doing the same investment outside of an IRA. Given the fees involved with this type of investment, what would be the minimum investment recommended to absorb these fees/costs and still realize an acceptable return? No answers here. Examples of returns are unrealistic in today's more normal market conditions. The author does make some good points, and the concept is really great. But buyer beware. I was so disappointed to come to the conclusion that buying a $350K investment property, using the required non-recourse loan with a higher rate, and setting up an LLC with 2 members (the bank and my IRA) was too complicated and restrictive. This book is an excellent starting point, but the drawbacks either aren't mentioned, nor fully addressed. Basically, the author is selling. Remember what he does for a living. Get your highlighter out and read carefully!
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16 of 17 people found the following review helpful:
4.0 out of 5 stars
What this book is...., August 12, 2009
This review is from: How to Invest in Real Estate With Your IRA and 401K & Pay Little or No Taxes (Paperback)
I read the above review and I just had to object. This book is not about teaching you HOW to invest in real estate, or the mechanics you should follow. That subject is left to other books you should read. The proper way to invest in real estate is a decision ultimately handled by you and your attorney, but if you've bought investment property before its understood that the property is held in its own LLC. Investors that are unfamiliar with this concept need to continue to educate themselves with books, mentors, and their attorney.
There are fees involved with using your IRA to invest, but they are usually much less than the fees involved when investing in mutual funds. Front loaded funds take a chunk right away and back end funds take fees through out the life of the investment. I don't personally have an Entrust account (mine's with Security Trust Company) but I set my dad's up with Entrust. He was amazed to see how cheap it was.
If an investor has a basic concept of investing, then this book shows you how to use your IRA as a source of funds to do the investing. It illustrates how to use the IRA as either a private lender or an equity partner and the requirements for both. I have been investing in real estate with my IRA for two years and it is no more difficult or complicated than working with a private person. There are specific guidelines you must know about, but that's why you buy the book.
The review above say, "it avoids the topic of fees and lack of control, that are involved in maintaining any real estate investment within an IRA.".
This is simply nonsense and sounds like someone who has not invested before. Mr. Bromma, or any other author for that matter, couldn't possibly offer advice about fees since that differs from custodian to custodian, just as it does from mutual fund to mutual fund. As far as lack of control, most investors move TO real estate because of the INCREASED amount of control. How much control do you have over a fund manager's choice in the stocks and bonds they select? On the other hand, how much control do you have over the contractor you use for the house you're rehabbing?
"It also doesn't mention any of the costs of setting up an LLC with one or more members. Setting up an LLC is a likely scenario and was, in fact, recommended to me, by Entrust. Buying real estate within an IRA is very different than doing the same investment outside of an IRA."
The first line, again, cannot be answered by the author, because the cost to start an LLC is dependent upon the state and attorney you use. In Chicago the number of members has nothing to do with the cost of the LLC set up, but may increase the amount the attorney charges you for your operating agreement. Buying real estate is inside your IRA is NOT DIFFERENT NOR MORE DIFFICULT than doing it outside of it.
"Given the fees involved with this type of investment, what would be the minimum investment recommended to absorb these fees/costs and still realize an acceptable return? No answers here. Examples of returns are unrealistic in today's more normal market conditions."
Again, the author cannot answer these questions because: 1) he doesn't know the fees you'll pay, 2) he has no idea what kind of investor you are, and 3) only you can decide how much money you need to make in order for an investment to make sense. Returns in today's market can BE ANYTHING and are DETERMINED BY THE DEAL....there is no such thing as UNREALISTIC RETURNS FOR A MARKET...only for the deal.
"I was so disappointed to come to the conclusion that buying a $350K investment property, using the required non-recourse loan with a higher rate, and setting up an LLC with 2 members (the bank and my IRA) was too complicated and restrictive. This book is an excellent starting point, but the drawbacks either aren't mentioned, nor fully addressed."
Buying a $350k investment property doesn't mean anything othere than that's what was paid for it. The bank illustrated in this review is charging a higher rate and asking to be put in the LLC. First, I've NEVER had a bank say they wanted to be in an LLC with me. That would mean they own part of the building, which banks don't want to do..they'd have to show it on their balance sheets as an asset and be entitled to income and depreciation, and a project they don't control. If that bank requested this, that was THAT BANK....its not a realistic example of what you'll find elsewhere. I would also be interested to hear the specific reasons why it was 'too complicated' and 'restrictive'. The IRA is the member in the LLC, but YOU control your IRA....its no different thatn any other form of investing.
If you're interested in investing in real estate with your IRA I suggest you ignore the reviews and read the book yourself. Then do some due diligence and google 'self directed IRAs' and start reading. Entrust and Security Trust Company are the two I've been invovled with (although STC is MORE expensive, which is why I put my dad with Entrust).
Educate yourself and learn what you can from everybody.
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2 of 3 people found the following review helpful:
3.0 out of 5 stars
How to invest in real estate with your Ira and 401k, January 25, 2011
This review is from: How to Invest in Real Estate With Your IRA and 401K & Pay Little or No Taxes (Paperback)
The paper work required to be able to use this plan was not included. I spoke to the publisher, McGraw-Hill. They said if I brought the book there was a CD included which gave the required paper work structure. I had purchased the E book for my IPad
Now, I need to buy the book to get all the information.
Bought the book no CD! In the end the book was informative, but incomplete without the key structure to make this plan work!
Frank
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