There’s no such thing as a passive investment. If you value the money that you earned and if you value what you’re

doing, you’re always going to be checking up on that asset sponsor because people want to build wealth. The more rental properties or real

estate you buy, the harder it can be to qualify for loans. You don’t have to be a billionaire to do this.

I think it’s such a fantastic tool where you get power and control of your own retirement funds which you’ve worked

hard to build retirement. It has to be in layers. It’s not just one thing.

performing finance. Welcome back to the Hybrid Real Estate Professional Podcast. The show where we

help you build a life of abundance through real estate and small business investing without compromising what matters most to you. Today’s guest is

Karen Hall, CEO and founder of UDirect IRA Services, founder of Orange County’s

Real Estate Investor Association, and one of the most respected voices in the world of self-directed retirement accounts. Since 2009, Karin has helped

thousands of investors take control of their retirement funds and use them to invest in real estate, private lending,

and other alternative assets. She’s also the author of self-directed IRA investing published by Bigger Pockets

and a regular speaker at industry events like BPCON. Beyond her business success,

Karin is a generous leader who uses her platform to give back. She serves on the board of the Council on Aging Southern

California and supports causes that help others build stronger financial futures. Karen holds the keys to life-changing

knowledge about how to take control of your retirement accounts and start investing on your own terms. Karen, welcome to the show.

Thank you, Erin. I really appreciate it. Selfishly, I’m really looking forward to learning a lot more about one of the

best tools available to real estate investors, which I myself have not utilized yet, retirement accounts. But

before we get into the technical stuff, would love to just get the cliffnotes backstory on how you got into real

estate. How does anybody get into real estate? you start doing something else and you think I want to make some real money and

how do I build actual wealth and you think you find it you find real estate or it finds you either way. So that’s

how it was for me because for a while I was a radio announcer and that’s what I did. I started in college and just kept

going for a long time but then again unless you’re doing the morning show or something like that didn’t really pay

very much and so then got into the real estate space and that was some time ago moved different things was an actual

realtor did mortgage loan servicing loan origination and other things property management too and but then great

recession right and I had to find I couldn’t be a loan officer I was going to sell real estate then and so I got

into self-directed space and after a couple years of that I opened my own company. So that’s your direct IRA

services. Wow. Yeah. So you’ve really hit across all the different domains. You did lending, you did property management,

you did transactions as an agent. What was I I guess that was a lot of exploration and seeing what you like and

what you don’t like. And then like you said the the economy kind of decided for everyone that when the downturn came and

some tough decisions had to be made. But in that in that pre-recession chapter, was there any one particular domain that

you worked in that you enjoyed more than others? I don’t know. I enjoyed them all differently for different reasons. Radio

was fun and I got to do I got a lot of free tickets to go do fun things like a whale whale cruise in Seattle, things

like that. Super fun. That’s that’s much different. But when I got especially into mortgage loan origination, that was

really such a deep education because that’s when I read Think and Grow Rich

and I was like, “Wow, this is how I do it.” It was boom. It just the whole thing I could see it and I do this I can

do this and I can get from here to there and I could see the path and with loan origination it was really a path to

making the be the best money I ever made up to that time. And I had learned so much all the jargon, all the but also

about the professionalism and also looking at the the 1040s of the people

who were getting mortgages, how are they acquiring wealth, what’s on their tax return and and what do I need to do? How

do I emulate these successful people? And so that taught me a tremendous amount. So love origination was it was

like I would have felt boiler room man but at the same time great education

about finance and and just the whole world of money. Yeah. No, I bet you you get a whole

there there’s the story people tell in public and then there’s what’s on their actual applications and how people get

approved for loans, how they continue to qualify for financing. Especially the more rental properties or real estate

you buy, the harder it can be to qualify for loans. So, I’m sure you learned really behind the scenes how to how to

make it all add up. And I I think of it as kind of like skill stacking, right? You spent time as an agent. So, you

learned how to communicate with whether it’s investors or or normal kind of home buyers and and then loan origination.

Then, I’m sure that informed you very well into what you got into, which is the the insurance or the self-directed

IRA space. Well, it did corporately because what do the people that open IAS, what do they invest into? It’s real estate. And if

it’s not single family, it’s multif family or it’s they need and they’re building wealth. So mortgages are a path

to wealth building and to understand how how all that works. So yeah, it’s all been wealth building for a long time and

so it just it just dovetailed really. Yeah, absolutely. So you mentioned that the the recession was kind of a line in

the sand, maybe a turning point. Can you talk about kind of like So I think I saw you you founded UDirect in

2009. Yeah. Yeah. So, what was that period of kind of 2008 2009 like? Sounds like you did some

self-reflection, some discovery, and then came out of it with a with a a great business that still exists today.

No, it was pretty crazy. So, at that time, single mom, two kids, lost my job and mortgage like, okay, what are we

going to do here? So, it was just one foot in front of the other and sort of put it together. When I opened UDirect,

I had a negative net worth. Yay. And I quickly corrected that. But, it was there was a minute. We I think we all

had a minute during the recession where we learned things and we learned it was survival is like what do I do? How do I

take all my skills because you’re right I literally was skill building. One thing that I really wanted in my life is never to be stuck without enough skills

to get a job to always be employable. But now I’m an entrepreneur. So now I I’ll never be employed again. It’s

great. Now I’m totally unemployed and I love it. And it it’s a great way to to

really help people understand what they can do to build wealth and also not just so it’s like serving two functions. One

is having wealth today so you can live a good life. That’s beautiful and wonderful. But it’s also building wealth so that when you can’t work that you’ve

built something for yourself that’s there for you for later. And that is incredibly important. It’s important to

me for myself. It’s important to me to help other people to understand this and to be prepared.

Yeah. But there’s a huge education component because what’s interesting is I’ve always thought of liquidity versus

illquid investments. So real estate by nature once you buy a property if you tie up a large chunk of your equity in

the home it can be relatively inaccessible compared to stuff like stocks. But there’s another element that

I haven’t thought as much about that I’m sure you think about all the time which is the retirement account wall. Most

people contribute to a retirement account in some form or another through their employers, but not a lot of people

spend time thinking about where that money is going and and in a way it is

also illquid or at least there’s a penalty to access it. So, I guess my the

question that leads me to is when you’re working with investors, especially maybe people earlier on in their careers, how

do you educate them on kind of like what what belongs on which side of the retirement wall and how to think about

that accessibility of their money? Yeah, it’s so I should say that we’re not financial advisors just like for the

lawyers don’t give financial advice at CPAs or attorneys or anything like that. We provide self-directed IAS, but there

are there are two walls, right? There’s the there’s the personal wall where you’re going to be using the money for put bread on the table, pay your

mortgage, whatever you’re going to do personally. Then there’s retirement money which is tax protected. It’s a

special bubble and you don’t the whole point of this money is to save for

later. It’s all this is the later money. So you’re right. It’s I liked how you say well then because it really it should be. It really should be. I mean

sometimes we need to break in break the piggy bank. I get it. That’ll happen with a lot of people’s 401ks. But which

reminds me that with a 401k where you work or a self-directed say solo 401k if

you’re self-employed with no full-time employees, those kinds of accounts actually let you break into them without

breaking the bank because you can take a plan loan from those kinds of accounts of $50,000 or 50% whichever is greater.

And you have to pay the account back over five years. So, there’s still a way you can have personal access to those

accounts, but with a regular IRA, you’re absolutely right. If you if you break the bank, you’re going to have taxes and

penalties if you’re under if you’re under a certain age, 59 and a half, and so forth. So, but I think when you when

you invest using a self-directed IRA, the reason you’re doing it is is for the intention of saving for later with the

intention of this is not my today money. This is my later money. So when you you go into it with that in mind, you’re

going to be looking for asset classes that are going to meet your objective. And so that’s that’s what we do. We help

people to actually do that and to understand how it works and how it doesn’t work and what what the rules are

because that’s it’s pretty important. Yeah. I think there’s kind of layers to it, right? One is figuring out and

understanding how much money you might need to save for retirement to live the lifestyle that you want to live. That’s

kind of a more of a calculation of how much to contribute. But then where where I think a lot of people stop thinking

about retirement accounts is okay, I’ve set aside my 15% or 20%, whatever the number is

and it goes into my employer 401k and it gets invested in some target fund that I don’t really understand. It just

has some retirement year attached to it and you just don’t think about it, right? I’m guilty of that. I think a lot

of people probably just kind of trust that these target funds are built to optimize for whatever retirement year,

but really don’t understand what’s inside them and what what you provide is a is a way for people to self-direct

their investments and they can do things lend private loans or invest in syndications. You’re going to educate

me. This is the part where you’re going to start educating me on all the different options available to people. But I think with that comes also a responsibility.

Once you have self-directed, you need to understand the risks of all the different you’re taking control of that.

So you you’re kind of in control of your own destiny in certain ways that you might not be if you just relied on that

target fund. So if you have any thoughts around just that kind of responsibility that it takes to run an account like

that, too. You’re going to be investing in the future. We say invest in what you know best. So for somebody like me and like

thousands and millions of other people in America who were in the mortgage industry, you understand notes for one thing. You probably also understand real

estate. So real estate and notes and then also syndications which we can get into kind of a hybrid of all those but

if you understand a mortgage if you understand notes a lot that’s what our account holders invest in right so my

and this was by the way really helpful in a grassroots level of like raising people back up after the great recession

after COVID a lot of people lost businesses and how are they going to get back so a lot of self-directed IAS

invested in these you know businesses to help people build themselves back up

after after an economic downturn because like my IRA, your IRA could have a debt

or equity position in someone’s business, make a loan to them or be an equity partner in that as well. Then there’s syndications. That’s the number

one asset class. Something to learn about what a syndication is is it’s really an agreement and it’s it’s a way

for people who are raising capital to legally raise that capital. So it consists of an operating agreement,

subscription agreement, which is really the contract. And so that’s the the

paperwork, but what you’re investing in is an underlying asset. It could be multif family or, you know, whatever. It

could also be self- storage. It could be lots of different things, business buildings, strip malls, that kind of

thing. So there’s an underlying asset with the syndication. So what you want to do is really, if you’re investing in

syndications, is really dig into two things. One is well the person raising

capital how are they doing? You want to check them out. You all that’s really three things you want to really review the document. What does it say? Because

most syndications don’t have a guarantee of paying you back. So you the third

thing you really have to also analyze before you invest in the syndication especially with retirement money is the

underlying asset. So you’re going to you know understand well okay say it’s a say it’s a multi-g building but what market

is it in? How’s that market doing? has the employment base in that market. So there research to be done on different

levels so that you educate yourself. You make an investment based in on what

you’ve learned from your research and and then you self-direct because when we invest in a mutual fund or something

like this, we don’t know who even the person who’s in charge of that. I assume

it’s not typically one person. I’m sure it’s the committee of sorts, but who knows how to calculate a PE ratio?

Seriously. So, do people really know stocks, bonds, and mutual funds better than they know real estate and notes?

And that’s when the self-directed ILA piece comes into play. Yeah, I think it’s such a fantastic

tool. And the cliche Spider-Man quote with with great power comes great responsibility comes to mind where you

you get power and control of your own retirement funds, which you’ve worked hard to build and contribute to.

But there’s also the responsibility, like you said, of really knowing who you’re investing with. If you’re doing a syndication, do you understand who the

sponsor is? Do you understand their business plan, the market they’ve chosen? And and also, do you understand

the mechanics? Right? They might have a rock solid business plan, but if they have a a structure that’s not going to

work for you, the distributions don’t start until year three or four, and you need well, I guess in retirement, you

probably don’t need cash flow right now, but there could be different things in the way the deal is structured that might not align with your goals. And so,

that responsibility does ultimately fall back to you. So, I do I think it’s a it’s an incredible tool, but then then

you have to be willing to be a little more active with how you do due diligence on the things that you do

choose to invest in. I love that active, man. I just love that because well, like a friend of

mine, someone who I know, she invested with the self-directed IRA and it didn’t go well for her. She didn’t discuss it

with me, which we’re friends, she’s talked to me, but it didn’t go well for her because she thought, “Oh, it’s a passive investment. Oh my gosh. If we’re

going to take something away, there’s no such thing as a passive investment. All it means is that you’re not talking to

the tenants. You’re not building the building. You’re not toilets, termites, and tenants. You’re not dealing with that. But there is no passive

investment. If you value the money that you earned, and if you value what you’re

doing, you’re always going to be checking up on that asset sponsor, getting the the reports, looking at

them. Is this performing as it’s supposed to perform? And do you have the right to look at financials? How is it

doing after you invest? After you do your initial due diligence, is it continuing to perform? So, we talk about

active investments. Well, they’re all active because we have to keep on top of all of our investments to make sure that

we’re minding the store, so to speak, right? Yeah. I shy away from using the P word because I think it’s a very misleading.

Many real estate books and all that. And you know, there is such a thing as passivity, but I

think truly passive 100% passive income more or less doesn’t exist because at

some point you’re making a decision, you’re doing due diligence, or like you said, you’re doing follow-up and and seeing things through. One interesting

element of that though that I really appreciate about having something like a self-directed IRA or investing in

syndications, if you’re an investor yourself and you’re on a journey to grow and evolve, investing in other people’s

deals and watching how they build their business plans, having that consistent quarterly communication. So again,

there’s the way people talk about their projects on the internet when they’re just musing on Instagram, but then when it actually rubber meets the road, those

quarterly updates where maybe they had to make a difficult decision or a pivot in the way they approached it. Like these are incredible learning

opportunities, too. And I’ve invested passively in a couple deals and now we’re actually putting together our first syndicated offering.

And the lessons I learned as a passive investor really informed how we approach communicating and even structuring the

deal that we put together. So there’s, you know, tons of educational benefits in addition to whatever financial

outcome you might be looking at. Well, since you’re putting together this syndication or this deal now, and so one thing I’m sure you learned is get fixed

debt, right? Yeah. Because we’ve had a lot of black swans, I mentioned the recession on edge and co. Well, what about the rates going up

in 2022? So one of the things that self-directed IRA world what you need to know is that if there are any expenses

of the IRA owned assets those expenses have to be paid for by the IRA. So in the case of syndications a lot of our

account holders had capital calls and we almost never saw capital I’ve been in this business about 20 years. We have I

mean rarely saw capital calls like we did since 2022 mid mid year 2022 I would

say. And so that’s it’s one reason why you want to leave idle cash in your IRA account because whatever asset you have,

if it has an expense, the IRA has to pay that expense. And so that was one black

swan med I’m sure you learned from, right? Oh yeah, absolutely. So you we’re using an SBA loan for our project and it’s all

there’s no balloon payments or anything that’s going to force refis at inopportune moments and yeah, we

definitely saw a lot of projects that had that floating rate debt and it was like a time bomb. Yes. and know a lot of investors that

were had capital calls and you know that stuff I I take it very seriously the idea of being a steward of other

people’s money. I know just about any operator hopefully does that and if not

they they should take it seriously but you know it’s a big responsibility and I think from the other side of the table

as an investor looking at an operator you have to basically make a judgment call like do I trust this person to even

if they have a great deal a bad operator can ruin a great deal if they’re not responsible you know detail oriented and

have command and control over the situation and able to make decisions so it is it is a big thing to try and

evaluate valuate and especially if you’re a newer investor and you don’t necessarily know what to look for. Today’s episode is brought to you by the

remote real estate academy, the community I launched last year where I personally coach investors and empower

them to buy rental properties anywhere in the United States. My business partner Nathan and I have a collective

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how you can build your own portfolio and start accessing the life-changing benefits of real estate investing

starting today. Go to remoterrealestateacademy.com for more info or better yet shoot me an

email at aaronaramine.com with subjectline ra and I’ll throw in a

special bonus for podcast listeners who join the academy. Now let’s get to the show. It’s one thing I’ve noticed too

about your company and and even some of the others I’ve seen. There’s a ton of education, right? A lot of the these

custodians and self-directed companies put on webinars all the time. They’re they’re showcasing like how to analyze

deals. And I find that really valuable. It’s a great It’s a great asset as well.

I think I’m interested to know cuz like you and I, we run in real estate circles. We’re around a lot of people

that are actively doing this on their own. Do you find a lot of customers that

are just working W2s, don’t really have an active interest in building a business, and they still want a

self-directed account, or what’s what’s kind of the mix that you find? Yes. Yes. Because people want to build wealth, right? And they’re looking for

ways to build wealth. And now the with the internet exploding more and more every day, more information out there,

it’s like how how do we do this thing? And then maybe it’s a meetup, maybe somehow you’ve heard about heard about something like I’ve been active in in

Bigger Pockets and that’s we published the book subject diary book bigger pockets is one of the ways that people

have found alternative assets, but there just so many different ways. So you start looking. It’s like I’d like to build wealth for my family. How do I do

this? Well, alternative assets are going to come up at some point and and then you’re just going to dig into that and

learn more. Does that address your question? Absolutely. And I think so you held up your book. I know we’ll make sure we

link to that. I’ I’ve been reading through it and it’s a great guide, tons of information, very comprehensive

overview. I know we can’t pack all that into this interview, but I’m wondering at at the highest level if we can just

talk a little bit about the types of accounts because obviously there’s a big difference between a a solo one 401k, a

SE IRA, and the various types of self-directed. So maybe just a a quick overview of the menu of options people

might have. Vick, you can a way break it down into two categories. Are you self-employed? Are you not self-employed? So if you’re

not self-employed, then you can have a traditional IRA or a Roth IRA if you’re

not self-employed. And these accounts have uh for 2025 have a contribution

limit of $7,000 if you’re under 50, $8,000 if you’re 50 plus. the $1,000 the

difference they call it the catchup contribution because you’re a little older you need to catch up

and that’s and that’s those are the same limits as a traditional IRA that’s not self-directed correct

that is a good point because guess what an IRA is an IRA whether it’s self-directed or or not doesn’t make a

difference is a good time to tell you that this is the 50th anniversary the 50th birthday of the IRA and it’s always

been self-directed not really a different thing it’s just what are you going to put in that bucket the typical

IRA it’s stocks tax, but a self-directed IRA, it’s alternative assets. But an IRA is an IRA. It’s the same thing. The

rules are the same. The tax codes are the same. It’s just a different asset in that bucket. So, there’s the traditional

and the Roth, which is really the newest kind of retirement account for an individuals. Even that is years old. But

if you’re self-employed, there’s the solo 401k. Now, a lot of us that worked the jobs with the 401k. We know what

this is. It’s a retirement plan. Solo 401k or any 401k has two buckets. the employer portion and the employee

portion. So if you’re self-employed, you’re both. And so the cap to to contribute to a solo 401k is the lesser

of 25% of your income up to a cap of $70,000 a year can possibly be tax

deductible. Talk to your tax person. So you could put that money away, give tax break now, and then you’ll pay tax on it

later when you retire. So that’s the silver 401k. So you’ve got that. You’ve got you could use that employee portion

as Roth and put money after tax in then it comes out tax-free. That’s great with the SOA pay. Also again you can borrow

money from it if you needed to. And lots of bells and whistles with that kind of plan if you’re self-employed. Now

another one is a SEP a simplified employee pension. That’s most of these things are acronyms, right? So

simplified employee pensions. And now this is if you have a company with

employees, you can have a SE and the SE will be can be in effect for all of your

employees and all the companies you own. A lot of people are buying businesses these days like buying small businesses

from baby boomers who are retiring. So a SE IRA could be for all your businesses is called a control group. And again,

the contribution is the lesser of 25% of your income up to a cap of 70,000 for

this particular tax year. I’m talking about a lot of numbers and things like this. So, I should it’s a

good time to mention that before you jump into this and make these decisions, discuss this with your competent tax

advisor because that you’re it’s a team. You want them on your team. Hey, I’m going to be doing this. How much can I

contribute? What is my correct 25% like which one should I choose? Which account type is best for me? These are questions

you ask your tax advisor and they’re going to be your partner in this. They’re going to make sure you get your tax break. they’re going to put that on

your tax return to make sure that that really happens. And so they’re going to be on your team with you helping make

these accounts work to your highest advantage. So we covered the traditional the Roth SE that okay, there’s a simple

IRA. Of course, it’s not simple because that’s what the government calls it, right? Savings incentive match plan for

employees. It’s an acronym and it’s not very popular. We hardly do them at all. It’s just the SEP just is so much better

than the simple IRA, but they’re around. And then there’s also an HSA. You could self-direct a health savings account.

So, if you’re working somewhere that gives you the option to have a high deductible health plan, HDHP,

you can have a health savings account that goes with that. And you can use that health savings account to invest in

alternative assets, self-direct, right? And what else is there? There’s also an inherited act. someone passes away and

you receive their retirement account like and so that can also be self-directed.

I have so many questions but that was a great overview. So a couple clarifying things on the solo 401k and then also

the SE IRA. So solo 401k you mentioned you have to be self-employed. A lot of people such

as myself hence I told you at the top I was going to be a little selfish and get some answers for myself too here but

my wife and I have an escorp right that it pools I have some coaching income. She does some consulting. We have

various forms of real estate income pooling into there, but I still have a full-time W2 job. She is going to draw a salary from that

escorp, but technically she’s fully self-employed. My question to you is A, I’m assuming she can qualify for a solo

401k, but B, could I or or is am I disqualified from that option because I

have a traditional employer? Yeah. So, two things. I’ll answer your question. The other thing is talk to

your tax advisor. This is a tax question. Yes. But it So, here’s the thing. So, say it you your wife has a business. If there’s

a business where you’re both the owner, right? Whether you have a a 401k, I mean

a W2 job on the side, you’re still the owner of this company, this company is the sponsoring company of the plan. The

plan sponsor is the company. So, if if you husband and wife are both owners of that company, you can both participate,

but you want to talk to your tax advisor making sure that you’re making the right contributions. So,

Got it. And then for the SE IRA, did I hear you correctly that it has a similar contribution limit which is higher? It’s

not constrained by the $7,000 per year that a traditional IRA is it was the 25% or 70,000 whichever is greater.

Exactly right. Yeah. The SE IRA, think of it like like a traditional IRA on steroids. But hey, here’s something new.

New and not new. At the end of 2022, this is kind of a mindblower really for me. I can’t believe everybody isn’t

jumping on this, but at the end of 2022, the Secure 2.0 passed. the last minute of 2022. All right. At that time, what

this cur 2.0 said is that you can now make Roth contributions to SEP accounts,

SE and simple accounts. So, say for example, you make enough money, you could put in 70K a year into a SE IRA, a

simplified employee pension. You could do them with pre-tax dollars, get a tax break perhaps, talk to your tax person,

or you could put in after tax dollars and have that money grow taxree for life, Roth tied dollars into a SE and

you’ve been able to do that since the end of 2022. People don’t know this. You know it now. You can do this and you’ve

been able to do it for a while. So, a lot of people are like, “How do I stuff a Roth with taxfree dollars?” Well, here’s a new way. You You probably heard

of the backdoor IRA or the backdoor Roth. All that means is you contribute to a traditional IRA and then do a Roth

conversion. And when you do a conversion, you pay income tax on every dollar you converted. Okay? So that the

way to build a Roth. Well, the same way is to have a SE IRA, be self-employed, have a SE IRA and make Roth

contributions to it. You could do that too without without doing the backdoor IRA conversion thing. Now, I know I

covered a lot. That’s a lot of technical data for your audience. I’m sure is following but that’s why we’re here like

talk to us what do you want through you know what is your what is your structure and then tell us about your assets you

know that’s the most important thing no I I appreciate the the detail and I think it’s something like you said most

people don’t even know I have a cursory overview I’ve been reading your book but a lot of this is relatively new

information for me too even though I’ve been investing in real estate for seven years and I’ve been contributing to retirement accounts for 15 years

and it’s just stuff I didn’t know and it’s one of those things where Again, I’ve hit a we’ve talked about this a

couple times in this interview. It is a responsibility. So, it’s an additional thing you have to pay attention to, right? If you’re going to

if you’re going to open up one of these accounts, there’s no sense in doing it if you’re just going to invest in the same Fidelity target fund that you had

with your traditional employer plan. So, it’s one of those things where if you make the decision to do it, you

got to be willing to do that due diligence and really understand like how are my how are the funds in this account

being allocated? Am I too overly indexed on one asset class? Is it all on

Dogecoin or or am I spreading it out and and building? This is your retirement. It’s your nest egg. So there there is a

responsibility element. And and also to your points you made a couple times. This should be personalized and

discussed with your own tax professional, your financial planners, whomever you trust and whoever’s on your

team to for your situation because all of this stuff is individualized context.

It’s like taking advice from one person who has a very different lifestyle and set of circumstances not necessarily

going to help you. So I think it’s helpful to hear the different tools available though. Yeah. Think of it when you were talking

it makes me think of like a garden and you know you plant a garden and you don’t have to attend each plant every

day. You can go live a life but if you don’t pay attention to them sometimes it’s everything’s going to die. So just

think of it as a garden where it doesn’t require all your time. It just requires some of your attention. And it’s

probably a good idea to set aside time like, hey, this is my set aside time to focus on my assets and I’m going to take

an hour on a Saturday or something or whatever day, whatever you want. And this is this is a day I’m going to tend

this garden, this IRA or I’m going to be working over here on I’m building my personal savings, whatever it is. But

there are things we have to tend to in life. As adults, we have responsibilities and like with great power comes great responsibility like

you said. And so your retirement future is another thing in your garden to tend to. Not every not every day. You don’t

have to you can leave it alone for a minute, but you have to pay attention to it. Yeah. I think of my my personal fear for

myself would be that if I had full access to self-direct every dollar in my retirement account that I might be end

up taking certain risks that I wouldn’t have otherwise just because I could, right? So, I think there’s a there’s

some self-regulation that you really have to pay attention to and and really trusting and understanding what that

money is really meant for. So, well, so we’ve talked about a lot of the upside of which there is plenty for for this

type of investing. What about the actual kind of administrative process? You know, is it easy to open one of these

accounts? Is there a ton of extra paperwork? Is it really expensive? Like what’s what does it look like if

somebody decides after this episode that they want to go open one of these accounts? Well, we we make it as easy as possible

thanks to digitization, right? We’ve got a digital application. If it took you 15 minutes, I’d be surprised. Before we had

a PDF form in the old maze. You filled it out and it was it was a mess. Now, it’s a digital process. Click on this

link on our website just says open account and boom, 15 minutes later, you’ve got a self-directed IRA account. You put the normal information in there,

like if you were open a checking account, like who are you, who are your beneficiaries, this sort of thing. And

if you’re transferring an IRA, you’re going to put that information in there. And you’re going to mention this podcast and how you heard about it. And then

you’ve got an account that’s open. That’s easy. Then you want to fund it and put money in it. So, it’s transferring an IRA, which you can start

right when you’re opening the account, contributing to it, and that depends upon your age, your account type, and

your income. Or if you have an old employee plan, well, employer plan, I should say, bring it over, and it’s

called a rollover. So, you open the account, you tell that plan administrator, hey, bring my money over,

and they you fill out their paperwork, and then they send the money to the new account. So that that’s going to take a minute that for them to do that that

paperwork, but opening an account and getting it funded, I mean tops two weeks if it’s a if it’s a rollover.

Got it. And once it’s open, let’s say you see that syndicated offering or you met the operator, you found the project

that you want to invest in. Is it a pretty relatively simple process? You know, from making the decision that I

want to invest in this to getting the, you know, the wire out and all the paperwork filed. It really is. One pitfall to avoid that

I’ll mention is to make sure that you put enough money in the account that there’s a pad for fees. So we have a

$500 pad just it’s your money. It’s not a fee, but it’s just for future fees. Leave some money in there. So if you’re

going to say get into a syndication deal, like say a a regggd offering and it’s say 50k, you want to put it like

maybe 51 just so there’s a little money in there. So you because otherwise if you just put in 50k and and don’t

consider fees, you’re going to be short and it’s like you’re not going to make your deadline and it’s going to slow you down. So just put a little tiny pad in

there for fees. That is a pro tip. Do that. But assuming that you’ve done that, then you just you get us the

documentation. We review it. We want to make sure that we’re not saying if it’s a good or bad invest. Okay, that that’s

the account holder’s job. It’s self-directed and that’s what that means. But we want to make sure the IRA

is the investor, not the individual. We want to make sure at least as much as we

can in our limited capacity or limited responsibility, but to see is the IRA

actually receiving an asset in exchange for the money. In other words, is is

that the agreement? Like we’ll give you this, you give us that kind of thing. The real deal, am I actually getting an

interest in this company or equity in this real estate, whatever it may be, right? Well, here’s an example. This is this

will clear it up. Back in 2009, people would do me and say, “Okay, open your self-directed IRA and put money in this

escrow account and then when we find a property for you, right, when we find

then then we’ll pull the money out of escrow and then your IRA will have a property then.” And guess what? People

were stealing that money because the money was just going to an escrow account, not acquiring an asset.

Yeah, that that’s what I mean when I say acquiring an asset. That there’s actually something like that. But of

course, somebody we didn’t even talk about all the assets. You me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me mentioned cryptocurrency. There’s precious metals, there’s a lot of assets, but but once

once the money’s in there and you’ve got enough and you’re and you’ve thought about the pad for fees, boom, the money

is out in like 24 48 hours into the deal. And that’s what people want. You want to invest, you want it to be as

problem free as possible. And that’s why we we want to talk to you and find out what are you dealing with so we can help

you avoid the pitfalls. Yeah, I think that’s that’s a good level of involvement, right? you’re there to

prevent any catastrophic like getting sucked into potentially a fraudulent deal or something where

Whoa. Right. Cuz nobody knows if it’s fraudulent. Like a Ponzi deal doesn’t happen when you open the account. It

doesn’t have happen when you invest. Like a Ponzi deal happens when somebody like Robs Peter to pay Paul and that

happens way after you’ve invested. And that’s it’s beyond the investor’s knowledge. This is why you keep doing

your due diligence, right? How is that operator using your money? So we we can’t protect you from fraud. There’s no

it just we we can’t even protect ourselves from fraud sometimes a lot of times. So what we have in our arsenal is

due diligence and I could go on and on about that. No, thank you for that correction because it’s important, right? Like

obviously the at the end of the day the responsibilities on the account holder and there’s many things like you said that you might not find out that are

wrong about the deal that could come years down the road. But what I I guess what I meant was it’s great that you

guys have a team and people that are keeping an eye on some of that paperwork as it’s being processed because you would probably be able to spot a red

flag because you see these stuff all day every day and an account holder might have very

limited or potentially no experience with those type of deals. So just it’s another little kind of check and

balance. I understand it’s not a fullfledged protection from the worst outcomes, but but it’s nice to have

another set of eyes. Yeah. Yeah. Exactly. Right. Right. So in even two or three reviews we’re doing this again and tell you a little story.

So we get a deal coming through and an account holder they want to do a note

modification happens like the terms of this we’re going to change change terms to this maybe it’s a balloon and we’re

going to extend whatever the terms. Well we were looking and one of my employees brought this to the staff brought it to

my attention like look at this note they just wrote on the face of the note like modify. It’s like no you don’t do it

that way. So, who is this note expert that is trying to modify a note in this

way? So, I look up the guy’s name and I go to FINRA, which is the enforcement

arm of the SEC, right? The Securities of Exchange Commission. So, FINRA has a website and write this down. This is a

good one. It’s called broker check. Broker check. And a lot of times you have to be registered with the SEC to be

able to raise capital. So, I went on broker check and I put typed this guy’s name in there. Oh my gosh, the internet

and emails. this thing on just scrolling and scrolling through this email about all this stuff. this guy’s not he’s

barred from doing business not supposed to be raising capital and this guy trying to modify one of our account

holders not like yeah we got a problem here so I saw in going through all this all these emails or all this data an

email address so I write to that email address and I and Fedra and I say you say this but we see this what do you

want to do about it and they say we want a sink we want the like okay well I got

myself into that one but here you go and get a lot of the records and that turned into the bottom line is that that person

is in jail and it was preon was I mid Ponzi when we just happened to catch it

because of that foolish mistake that they made and so there was still money in the deal to pay back investors not

100% but there was but we just happened to catch it we’re not law enforcement we’re not we’re not this but we saw it

and so we had the opportunity and we seized it and that’s that’s what happened and definitely doesn’t happen

every day, but that’s an example of us looking at the documentation and saying, “What?” and questioning it and taking it

a little further. Yeah. I mean, that’s the difference between having a trained eye that has experience and perspective of what

something’s supposed to look like and and not, right? So that’s that’s where I keep coming back to this like I I do

view it as pretty inherently risky to self-direct your own funds because

you’re putting your entire financial destiny in your own control and you can end up in situations where you’re

signing on with people that you don’t know that aren’t as regulated perhaps as a blue chip Fortune 500 company

but but at the same time you you get access to all that upside too. So, I I don’t say any of this stuff or I’m sure you don’t tell these stories to scare

people, but it’s just to show this is kind of the world that you’re entering when you get into some of these private

equity deals and, you know, off off the beaten path. Yeah. Yeah. Yeah. Exactly right. And it’s just

it’s an interesting story. This isn’t our everyday IAS. They’re not that exciting normally. I love what I do, but

it’s not meant to be exciting like a thrill ride or anything. It’s meant to be secure and stable as much as you can

make it. So there are lots of great asset classes that you can invest in. A lot of great opportunities, but you just

have to find them. And the way to find them is to talk to people. What are they investing in? What kind of returns have they seen? Like your friends, you’re out

to dinner with somebody. Well, you start talking. What are you investing in? And how’s it working out for you? And you start to learn by hearsay. And then you

just keep digging deeper. And you find an asset that makes sense for you. And that’s when you self-direct. When you find that asset like, yeah, I see this.

I checked it out. Looks good. I’m going to go forward. But yeah, the crime fighting, that kind of thing is rare,

but a fun story. Yes, absolutely. Well, I want to pivot to one other topic that’s unrelated to

to you direct, but kind of related to your broader story, which is I saw you also are on the board for correct me if

I get the name wrong, but the Centers for the Aging and you’ve done a lot of work with just generally supporting the

population in different contexts as people grow older. So obviously UDirect helps people with their financial taking

control of their financial future and preparing for retirement. Centers of the Aging I’m sure focuses on completely different set of problems. I mentioned

before we hit record that I’m my wife and I are building two residential assisted living homes and we’re also

getting much deeper into that world of senior care and you’ve been in it for a really long time. You know, we talked

before we hit record the silver tsunami and the boomer population is aging much faster than we have the capacity to

support them. I’m just curious to get your overall thoughts on kind of where where this is all heading. Is there are

there trends that you’re seeing or ways that people can kind of prepare for those shifting demographics in the in

the country? Yeah, this is probably going to be the most helpful. And this is thinking about my own retirement. How am I going to get

there? And in the retirement industry, I really better figure this out for myself, right? So, it dawned on me that

hey, retirement isn’t just one thing. And I know a lot of us are are living handtomouth and things are expensive and

if you live in California we’re about to raise the gas prices again and there’s always something coming up and you’ve

got kids there’s no end to what you need to do but what we also need to do is

take some and put it aside. Retirement can be it has to be in layers. It’s not just one thing. You’re not going to just

retire on your corporate 401k. You’re not going to just retire on your self-directed IRA. You’ve got think of

it like this. base base level is social security if it’s still there when you’re ready social security then maybe you got

some money in the bank on top of that maybe like I worked at a company that actually gave me an annuity years ago so

I’ve got a little annuity that’s going to come in at that point so annuities or say of cash value of whole life these

are like layers and what we like to do pre-retirement is have streams of income I’m sure you’ve heard of that if you’re

learning about wealth it’s have multiple streams of income so if something cuts off over here you’ve got something going

on over here and that’s a way to balance out your your economic safety. You can do that. But same thing in retirement.

You’ve got all these different layers in a self-directed IRA was one of them. And then there’s also your personal

investments. Maybe you invested in some say single family rentals and they’re you’re renting them out and you’re

getting the rent and just different ways that the money’s coming in. Think about this. You don’t have to be a billionaire

to do this. It’s just find different ways to save for retirement and not just one way. There are plenty of vehicles

out there and plenty of experts to help you with that. Yeah, it is a bit scary in the recent

five, six years. A lot of inflation, a lot of affordability. People use the word crisis. It kind of

is an affordability crisis in many in many markets. People can’t afford the rents and and just the general cost of

living. So, it’s it’s it’s shifting a lot of things around while the entire population is aging very quickly. And

like you said, social security, there’s lots of other things that people have grown to depend on that it’s just a big

question mark, right? Like I’m I’m 35. I have no idea if when I’m at retirement age that will be there and if it is

there, in what capacity. So the more we can take matters into our own hands. So I I believe in rental properties. It’s a

great stream of cash flow, especially if it’s something that you plan to buy and potentially pay off by the time you’re

retired. Then you do have those multiple streams of income. it can allow you to have less pressure on relying

exclusively on your retirement account. There are those layers and that’s where I think that the financial education is

definitely really important. So, I so agree. Yeah. Yeah, I still agree. Well, if people want to learn more about

you direct or or follow you, I know you speak at conferences. You you’ve written your book. What What’s the best way for

someone to to find you if they want to learn more? Write their info at the letter.com.

So info@udirect.com. We all get that email there at udirect. So that’s that way we can respond to you

quickly and and that’s the best way or follow us on social media. We’re on Instagram, LinkedIn, where where are we

now? Facebook, what what is there? We’re we’re there. And and and I do a lot of

reals. Well, it’ll be like a 45se secondond little bit about something that you need to know about a self-directed IRA because there are a

lot of different little little idiosyncrasies. So So we’re all over social media. So, please follow us

there. Decades of experience and perspective and then also specialized knowledge and

and one of the most powerful tools available to investors, self-directed retirement accounts. I’ve had a lot of

fun learning about it. I appreciate you taking some time to come on the show and we’ll make sure all that stuff’s included in the in the show notes. So,

I appreciate it. Thank you. Catch you next time. Thank you for making it to the end of today’s episode. As you may know, podcasts are

very difficult to grow organically. If you’re getting value from today’s episode, I’d deeply appreciate if you

can take 30 seconds to leave my show a fivestar rating and review. This will go a long way to helping me reach more

listeners just like you. Thank you so much in advance.