Kaaren is founder and CEO of uDirect IRA Services and was recently elected to the Board of Director of
RITA (Retirement Industry Trust Association).
IRAs (Individual retirement accounts) come in the form of traditional, Roth, SEP, Simple, spousal, and
inherited and they have different rules for contributions and disbursements.
Self-Directed means you choose the assets such as precious metals, real estate, notes, businesses, etc.
Not just investing in mutual funds and the stock market.
Two reasons to utilize and benefit from Self-Directed IRA accounts as a real estate investor:
1) For your own IRA to buy rentals, flips and other real estate
2) For you to bring investors into your real estate investing business with THEIR Self-Directed IRA
funds. You can ask friends and family if they have any retirement funds they might want to
invest with you (IRAs, 401(k)s, etc.)
When purchasing real estate in your IRA the IRA goes on title, not you. For instance it would say UDirect
IRA custodian FBO Holly McKhann’s IRA. Fbo stands for For Benefit Of.
You must set up your Self-Directed IRA before going into contract on a real estate purchase so there are
funds for your deal and so that the IRA can go on the contract and title. Remember you do not sign the
documents. The custodian signs on behalf of the IRA.
If you’re flipping houses full-time and you flip in a Self-Directed IRA it may be subject to UBIT (unrelated
business income tax). Consult with your CPA to learn if this applies to you.
You can learn much about UBIT rules in IRS Pub 598 at IRS.gov.
Prohibited transactions can disqualify your entire IRA account so learn what the rules are and follow
them carefully. Prohibited transactions include hiring a parent, grandparent or child (lineal
descendants) to work on your properties or sell them as a realtor. You MAY hire nieces, nephews,
uncles, aunts though.
For instance, if your IRA buys a house near the college your son goes to, your nephew can live in it, but
your son can’t. Your nephew can mow the lawn, but your son can’t.
Do proper due diligence on any companies you want to invest your Self-Directed IRA with to ensure they
have not committed crimes, fraud, etc. You can check them out through the SEC and googling “their
Kaaren’s two biggest advice points are
1. Save for retirement
2. Protect that money
Kaaren has offered a free book to our listeners called The Self Directed IRA Handbook by Mat Sorenson.
To receive your free book by mail, email her your name and shipping address at email@example.com
and type BOOK in the subject line.
Call Kaaren and her team at (714) 831-1866 uDirect IRA Services, LLC, www.uDirect.com
On this episode of Secrets to Real Estate Investing host Holly is joined by Raffy Boulgourjian. Raffy is a real estate attorney that is licensed to practice in state and federal court as well as the probate arena. Raffy says that real estate law found him; when he first graduated law school and started work his contacts were realtors and colleagues who also had realtors as contacts. He says that realtors would come to them and one realtor would refer him to other realtors and because of that he became a real estate attorney. Raffy’s firm is located in Glendale, California. Because the law is different in every state Holly advises listeners that while the solutions may be specific to California the problems are common and can apply to any state in the real estate arena.
Holly starts off by asking Raffy if an a buyer purchases a property from a seller that failed to disclose information about a property what is the opportunity in the eyes of the law. Raffy says that a lot of people think that California is a as-is state when it comes to purchasing properties but that is not the case. If there is something with the house the takes value away from the property then the seller needs to disclose it. Raffy advises sellers to disclose, disclose, disclose - put yourself in the buyer’s shoes. Raffy says that he sees case after case that go to litigation because of a seller’s failure to disclose. Raffy advises for all parties to do their due diligence so that they do not end up in these sort of situations.
Holly asks Raffy how a buyer can do more due diligence. Raffy says that a lot of times the problem that comes up is boundary lines. Raffy advises hiring a surveyor to get the plot lines so you know where your boundaries on and so that you don’t have to get to know your neighbors on the wrong foot. Holly asks if there is a specific time frame that show a increase in incorrect boundary lines, Raffy says that the older the home sometimes those have more incorrect boundary lines based on how many changes each owner of the home has made over time. Raffy says that a buyer should go down to the country reporter and do old fashioned research before you remove your contingencies because while some rehabs may look professionally done that doesn’t mean that they were legally done.
Holly asks what the opportunities are for someone who finds themselves in a position where the buyer failed to disclose. Raffy says that the buyer can often times cancel the purchase of the property or if the buyer has done their due diligence it is possible to possibly negotiate with the seller for a price reduction or something else that both parties can agree on. Raffy emphasizes that it is important to do the due diligence before the sale closes because it can be increasingly difficult to go back and get the seller to to change your agreement or compensate for the lack of disclosure.
Holly asks Raffy to speak on houses with title issues. Raffy says that he sees a lot of properties with leans on them; often times the title preliminary report will show various surprises that no-one say coming. Properties that have title problems will often have to be seen in front of a judge to get the title fixed but it is more important to get the property title cleaned up than to let it go otherwise you will not be able to sell the property.
Holly mentioned that sometimes investors will come across kids living in the home of relatives that have passed away, she wants to know how Raffy will get through that situation. Raffy says that when this situation happens the family will not be able to refinance the house if you they do not have the title which will require the family to go to probate court which is a lengthy process. Raffy says that probate court is necessary for situations like this and he goes over some solutions for people who find themselves in this sort of situation.
Holly asks Raffy to discuss how bankruptcy can be an opportunity for investors to take advantage of. Raffy advises both buyers and sellers to be cautious of properties that are in bankruptcy and to make sure you have authority to sell the property. When buyers are interesting in buying a home from someone having financial difficulties it is important to know that the seller is allowed to sell their home because sometimes the home owner may not know that they are in bankruptcy and the purchase will not be allowed to go through.
Holly asks Raffy to discuss evictions because sometimes landlords do face this problem when they need to get people out of a property. Holly asks Raffy what are the different options to landlords when they have this problem. Raffy says that landlord/tenant law is a very technical area of law. Law makers have strict guidelines for eviction and must be followed exactly. While the attorney fees might be painful Raffy says that it is vitally important to get the proper guidance when dealing with these sorts of situations. Holly shares are experience that her husband had with an eviction where he thought he had all of his ducks in a row but when he got to court he found out that because he had an LLC that owned the property that he was not allowed to represent himself in this situation and had to get an attorney.
If you are interested in getting in touch with Raffy you can call for a free consult because he wants to make sure he is able to help you before you decide to pay him. He wants to evaluate the situation before a fee structure will be discussed. Raffy also wants to advise that all of the information discussed on today’s podcast has been a broad discussion of situations that might occur but it is important to always get legal guidance when you find yourself in any situation such as those mentioned today.
On this episode of Secrets to Real Estate Investing host Holly McKhann shares her journey into real estate investing. Holly is excited to share her knowledge and experience about real estate investing journey that she has experienced in the past 7 years. Real estate investing has allowed for Holly’s husband to quit his job in the corporate world and had afforded Holly with not having to go back to work in corporate world. Holly has set out to do this podcast so that she and her guests can share their various experience and education with listeners who are interested in starting the journey to real estate investing.
Holly asks why do you want to start in real estate investing? Is it for freedom? Financial freedom, lifestyle freedom? Whatever it is Holly is ready to help guide you and help to get you educated. Holly will have various guests; lawyers, realtors, investors, bankers, etc. will all be on the show to help listeners learn the ins and outs of real estate investing and the multiple facets of the business. All of the guests will help to guide you on a personal or professional path and they are happy to help and share their journeys.
Topics that Holly will cover are house flipping, land lording, raising capital, investing, how to invest with various types of funding, etc. Holly says that real estate investing has allowed her and her husband to pay for 4 college educations for their children because real estate investments have a lot of tax free incentives.
Holly and her husband have purchased over 200 homes in Southern California; they’ve dealt with remodels, water damage, fire damage, they’ve added and removed rooms from homes, in all of the years that she has been in real estate investing Holly has seen all sorts of homes in her flip journey and she has even built homes from the ground up.
Holly has an accounting degree and worked as a CPA for 5 years right out of school. Holly mostly dealt with taxes which she says has really been helpful in understanding taxes and other financial situations that her flips encounter. Holly’s husband’s background is in civil engineering, he worked for various different cities before he started working for home builders. This is how he got into real estate because he really loved being apart of all of it when he was a civil engineer. Holly and her husband were married 11 weeks after they met and they bonded over house flipping right off the bat. Holly says that when she had her first child she quit her job in the corporate world and when her first youngest started kindergarten she started getting involved with real estate; she started with bookkeeping. At that time her husband had successfully completed one land flip that allowed her husband to quit his job. With the money that they made from land they went to a seminar on mobile home flipping and decided to get into the business and purchased their first place in Moreno Valley. While this first deal wasn’t the perfect deal she said that it was definitely a learning experience but they decided to stick with it and they kept on their real estate journey.
Holly shares how her and her husband did their first 100 houses and how when things got tough with investing how she turned to networking to help find deals through relationships. Holly also shares some of the financial strategies that they have used to get homes. In 2014, Holly decided to get her real estate license when they started to get a lot of deals from wholesalers. She decided to do this so that she could get in there and gain some extra commission on the deals that she was interested in.
Holly is excited to bring the best experts to you to discuss the topics that matter most to, you, the listeners. If you have any topics that you would like to hear discussed do not hesitate to email your requests in to Holly.
Holly started this podcast so that you can see that it is possible to do this business with little to no education in the public or private systems, this podcast will show you people who have had great success in the real estate business even when they thought that things might not work out for them initially.
Holly challenges you to take action now and get an accountability partner and let them know everyday what you are doing and what you want to get completed for that day and have them help to keep you on track.
On this episode of Secrets to Real Estate Investing host Holly is joined by Mike Hambright. Mike is the founder of Flip Nerd; he knows all about flipping, land lording and wholesaling. Mike is a real estate investor who primarily invests in Dallas, Texas. Mike has been investing for about 8 years and before his real estate journey Mike and his wife were part of the corporate world. Mike and his wife started this journey and Mike says that they ramped up really fast buying hundreds of houses and rehabbing them. Mike and his wife also started Flip Nerd in addition to their real estate investing. Mike says that now when people ask him what he does that the answer is getting longer because he finds himself wearing many hats. Mike says that the basis for his success is networking and this has helped him to see what else is out in the world of real estate and he enjoys sharing that with other people. Mike also uses his website and his networking to help educate other people on real estate investing. Holly and Mike agree that you don’t know what you don’t know when it comes to real estate because there are so many niches in the business. Mike adds that although it is a varied field there is a basic fundamental of wanting to add value to your houses and to the relationships that you meet along the way.
Holly asks Mike to share how he has built his network and why his network is so important to him. Mike shares that even before real estate investing he was always the guy that would coordinate happy hours or other get togethers with friends and colleagues. Mike prides himself on being the person that brings people together and he says that he really loves it and he has used the love for entertaining to help build his network in real estate. Mike mentions that he is a huge believer in real estate clubs and says that he went from attending the clubs to becoming a sponsor of a real estate club so that he could meet new investors. Mike was once part of a large club that only had meetings once a month and he began to ask himself what was he to do with the rest of the month? Because of that he would have rehab seminars and he would invite a bunch of people to the house so that they could see the progress of the project. Attendees would visit the property 3 times during the rehab so that they could see the transformation and also a allow people to get engaged in a real life project. These live rehabs made their way onto the internet and shortly after they started the podcast to share with even more people. Holly says that she also remembers asking people from her club to come out and check out the rehab that she was working on. Holly says that it was so much fun and it allowed for the people who attended to share knowledge with each other because no matter how long anyone has been in this business no one knows every facet of the business.
Holly and Mike discuss how real estate clubs are very beneficial and they are a great way to get a low-cost education as well as a great way to meet new people and find out what they are interested in, what they are doing, and what their level of experience is. \
Holly asks Mike how networking has helped him to buy houses. Mike initially started going to clubs and networking to meet other people but over time networking has evolved and has allowed him to meet people who can connect him to deals. Mike says that if you continue to go to meetings and continue to talk to people and build your business and network you will begin to build a reputation and people will start to remember you and they might call you up one day and have a deal that they think you are a great fit for. Although it may sounds negative it isn’t meant to be Mike says that you need to go to a club meeting with an agenda; you need to know what you are looking for and who you want to meet. Mike says to view the meetings as a way of planting seeds because you never know when it’s going to come back to you. Holly agrees because she had a similar experience that someone she met a while back called her up with a deal she thought Holly might be interested in. While Holly wasn’t interested in the deal it was the seed that she planted with this individual that made her call Holly.
Mike says that when you become a real estate investor even though you become increasingly busy it can become lonely which is why you need to network because it helps you to stay grounded and engaged in the community. Holly mentions that when she is networking she likes to let people that she meets know that if they help connect her with a deal or someone who has a deal that she offers them compensation and that has helped her a lot and it shows the people she is networking with that she isn’t just thinking about herself she wants to share the wealth and the good information with her network.
Holly asks Mike if he has any advice for those who are new to networking Mike advises listeners to go to an event and get out of your comfort zone and ask some questions and meet some people. While real estate clubs can be overwhelming remember that it isn’t about shaking everyone’s hand and filling your cards with pockets. Make sure to keep your conversations and connection quality because in the long run that will be more beneficial. Holly agrees and says that networking should be about quality and not quantity. Mike says that the most important part of networking is the followup; whether it is monthly or quarterly to help keep growing your relationship and to keep your conversations fresh in their minds. Holly says that she will reach out to people that she met to tell them about books that she read, or swapping educational information; something to keep the relationship active.
If you are interested in getting in touch with Mike and find out more about what he is doing you can check out his website www.FlipNerd.com - his website offers educational information and also allows you to connect with other like minded people in the real estate world.
On this episode of House Flip Masters Holly is joined by guest Bob Donnell. Today’s guest Bob Donnell is not a real estate investor but Holly finds that the strategies and ideas that Bob has will definitely help with your real estate business. Holly says that Bob has had a lot of hardships in his life but has used those hardships to learn and become a successful human being that is able to teach others on how to be successful as well.
Bob shares that he was raised by a single mother who was diagnosed with cancer when he was 15 - so he was on his own pretty early in life. When Bob was 15 his mentor asked him “what do you want to be when you grown up?” Bob says that he wasn’t really sure at that time. His mentor told him that he could either learn an industry or a product or he could learn about human behavior which would help him to learn industries and product as well. The past 30 years Bob has learned human behavior and has discovered why people do things and why they don’t do things. Bob says that this learning has helped to shape who he is and how he interacts with people.
Holly tells Bob that as real estate investors we need to have certain interactions to make a deal happen, she gives examples of the more difficult situations like getting tenants to move out, or not having enough money for a deal and asks Bob how with one of those topics real estate investors can better communicate to the individuals that they are dealing with. Bob says that all of the situations that Holly mentioned can be dealt with in the same fashion. Bob says that there are 3 components when we deal with business and life. The first component being that we need to under psychology and why people will or won’t do something, this is not mindset this is about your entire psychology; belief system values, etc. Secondly we need to master the art of connecting - we need to engage with people to a point where they want to stay engaged. The third component is the art of intervention, or influence the buyer or seller and to help them to understand why you want them to go one way and not the other. Bob says that sometimes intervention can be confused as manipulation but in the way that he presents it he does not teach on manipulating anyone.
Holly asks Bob to share how she might get an investor to invest with her when she needs to approach them at a networking event. Bob says that the best way for her to approach someone with a great opportunity would be to first and foremost understand that they are humans first and second understand your agenda and that it doesn’t matter to the person that you are going to approach. Bob says that the quality of your connection will be made in the quality of questions that you ask, if you ask basic questions you will have a basic connection. Bob says to make criteria for each area and person in your life and then formulate questions to ask based on those criteria. If you meet someone who does not meet those criteria then they are not worth you asking those questions. Bob says that when you are at a networking event you don’t want to tell the movie you want to tell the trailer because there is nothing worse than someone who just spews information all about themselves to you and others. Bob says that he does not like to set up time for people who do not meet his specific criteria and he will kindly tell them that maybe the conversation they are having is better suited for someone else. Holly says that she likes to thank people for explaining what they are offering or what they are looking for and tells them that she will go through her rolodex to find someone that might be a better connection for that person.
Holly and Bob do a role play where they meet at a party so that listeners can see how Bob would approach someone and start a conversation. Bob says that he does not like to go down the path of what do you do and he will try and stop that from happening as soon as possible. Bob says that a good question begets better question. When you ask a good question you will find out something new about that person which will lead you to another question. When you ask the right questions you get the right answers, a lot of people walk away from network events with nothing because they did not connect well with the people that they met. Questions need to be relationship currency orientated if you don’t have enough relationship currency to ask the questions you want to ask then you should not ask those questions.
Holly asks Bob to share a story from his background that he thinks could be beneficial and helpful for someone trying to grow and start their real estate business and they are in contact with someone who might be of a higher education or caliber than they are currently. Bob says that when he was 23 he was in a situation with a gentlemen who made 6 million dollars the year before and he remembers walking up to the man and asking him if he could buy him breakfast one day. Bob and this man went to breakfast and the man tells Bob that he knows why he asked him to breakfast, he said that Bob wanted to know about how he made the money that he made; Bob corrected the man and told him no he really didn’t he wanted to know who the man had to become in order to make that money. The man says that he has never been asked that question for. Closing their breakfast Bob said that he told the man he wanted to work for him one day a week for free, he just wanted to be around this man to see how he lives his life. The first day that he showed up the man and Bob got into the car and went to Downtown Los Angeles to discuss whether Bob should buy a certain company. The man tells the CPA in the meeting to explain to Bob why the man should or should not buy this property and why. When the CPA is done with that, the attorney is asked to do the same thing and he does. Every day that Bob worked for this man for 6 months was similar. He was learning something every day that he worked with this man. In the end Bob ended up being a partner with this man on a few properties. Bob says that this opportunity showed him that if there is someone who wants to teach you then you need to shut up and listen to them because they education that you are getting will be unlike anything you have ever learned before.
If you are interested in learning more from Bob you can always reach out to him by email or phone call and set up a 20 minute strategy session so that he can find what your goals are and setting up a behavior to get you to those results. Bob also offers online learning on the components that he discussed in today’s episode.
You can find out more about what Bob has to offer by visiting his website