How to Take Advantage of Your Self-Directed Individual Retirement Account

I recently had the chance to meet with some old colleagues and friends of mine. During our
get-together, I was asked what I do with my individual retirement account (IRA) money.
I shared with them what I do.

I took my IRA money out and, combined with my wife’s IRA, we now have a self-directed

IRA. We've turned this into a checkbook controlled self-directed IRA LLC, and with our IRAs,
we are the owners and managers of the LLC. We’ve been using this fund since 2007 and
invested in a rental while most of the money goes toward flipping homes.

By using our own IRA money for the last 10 years, we’ve been able to grow our nest egg

by 300%. We just filed our tax returns and we can see the assets between 2007 and
2017, which showed about a 30% increase each year. My friends were definitely excited
after hearing what we were able to turn our IRAs into.

If you’re looking to leverage your IRA into a good income, I’d love to speak with you and go over your options. We can talk about getting a return by investing some of your retirement money. I look forward to hearing from you.

How Has the Southern California Market changed in a Year?

The latest statistics are in for the Southern California market.

Here’s what we’ve been keeping an eye on.

Today I’ve got the latest numbers from our Southern California real estate market and I want to bring
that data to you. Our market is defined from Monterrey Park and Pasadena to the west, Rancho
Cucamonga to Eastvale on the east, and along the 60 and 210 freeways.

In summary, our real estate market is very healthy. Here are a few reasons why. For starters, our
unit sales have decreased by 4.75% in 2018 from what we saw from January to July in 2017. In
addition to that, the average price has increased by 6.43% from last year.

Last year in July, the average home sold for $633,000. Today, the average home is selling for
$665,000. That’s an 8.1% price increase in the summer market alone. This is partially a result
of increased demand. The average days on market has played a big role as well. We saw it drop
from 26 days last year to 18 days this year.

Another thing I wanted to bring up is our inventory levels. Our inventory is a measure of how long it
would take to sell all the homes on the market if no new homes were listed. This year, our inventory
has dropped from 2.87 months to 2.8 months.

That’s my real estate report in a nutshell. If you have any questions for me or want to know more
about the numbers for rental properties or the numbers in your specific area, I’d be happy to assist
you. I look forward to hearing from you soon.

The Merits of the Small Business Administration Loan

The Small Business Administration loan is a product that not many people know about, but it can help you to purchase a commercial property with a business for as little as 10% down. In some cases, the loan can be 100% financed. 

Under the U.S. Small Business Administration’s various SBA loan programs, you can borrow money for nearly any business purpose—including adding to working capital, purchasing equipment, refinancing other debts, buying real estate, or even funding the acquisition of other businesses.

SBA loans are favored by many because they have the lowest down payments, the longest payment terms, and they’re suitable for many different business purposes. However, these loans sometimes require collateral and paperwork can become lengthy. 

This loan is great for expanding your existing business or funding new business ventures.

The most common misconception about the SBA is that the agency lends money to businesses. The SBA doesn’t directly lend money to businesses, instead, you get SBA loans from a bank that participates in SBA financing. This loan is great for expanding your existing business or funding new business ventures.

There is a very good article at Fundera.com to explain these loans in further depth, or I know professionals that can speak with you personally about the merits of these loans.

Until next time - stay safe and stay happy!

What Is "Good Debt"?

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Very early on in my investment career, while I was still in college, I got an investment opportunity from a woman. She wanted me to give her $1,000, which she would pay back every month at 4%. I was intrigued, but my first thought was that it was a scam. So I asked her, "Why such a high interest rate?" She shared an eye-opener with me.

  
What this woman did every weekend was drive down to San Pedro to buy frozen shrimp from a whole-seller. She would then drive up to places like Fresno and Bakersfield, and sell them over the weekend in a refrigerated truck in a supermarket parking lot. 

For every $1,000 she spent on the shrimp, she made $400 in gross profit, more than enough to cover my measly split of $40 a month in interest. So I gave this woman my $1,000 investment from my student loans, and she is now a successful supermarket owner.

The lesson I learned here is that there is a big difference between cash flow and an interest rate. This is why she wasn't afraid to pay me a 4% interest rate, because she is going to make 400% profit in cash. She could make $1,600 a month, just from doing this, and only has to pay me back $40. A good debt is a debt that generates positive income. 

Bad debt, on the other hand, is the debt you are most used to hearing about. Bad debt is using your credit card for everyday purchases and not paying off the balance every month. That's how you go broke. 

If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!