Impact Investments Podcast: ‘Circle of Wealth Fund III’ & Getting Started With A Self-Directed IRA

welcome everybody for those of you folks
that are returning my name’s Heather Dreves – Director of Funding and I have my
colleague along here Erik Bergman our Investor Relations person so we want to
thank all of you for joining us I know we see some familiar names on the list
so for those of you that are returning we thank you for those of you that are
new you are attending the impact investment forum podcast so we’re super
excited I think this is our what fifth podcast we’ve done Oh at least yeah five
or six yeah we’re professionals now but we’re super excited we’ve got some very
exciting news today and we also have a guest speaker so we’re super excited
about that too but to get to the exciting news I know that a lot of
people have been waiting for this not just out you know what’s in our company
but outside of the company but we are here to announce that our circle of
wealth fund 3 is officially open and available for contributions so it’s been
a long time right a long time this is over a year in the making a lot of money
a lot of time a lot of sweat it is a culmination of a lot of effort from a
lot of people to finally get to this this moment in time to where we can
bring what we do here at secured Investment Corp on a daily basis we can
bring it to to the general public yeah yeah Emily yeah we’re really excited
about it our legal team down to our marketing to us I have been working on
this since last December so it’s it’s been a long process but it’s exciting I
think it opens up a ton of opportunities we’re gonna talk more about this in the
podcast but there’s a lot of opportunities to our students our
clients our investors that haven’t always been able to go into a fund
environment so we’re gonna speak to that a little bit but first Eric’s gonna give
us a little update on the market and what’s going on in the current markets
right now yeah and I don’t wanna I’m not gonna spend we have so much going on in
this podcast today I’m not going to spend a ton of time talking about the
markets you know the S&P 500 the Dow Jones and the Nasdaq are all still
hovering around that 20% game year-to-date across the board
we had a big push in oil a couple days ago you probably sell it oil ticked up
15% in one training session crude oil did that’s a very large move in one day
for oil obviously there was the bombing in Saudi Arabia which shut down
approximately 50% of their output so you know it seems like markets have sense
pulled back a little bit and calm down but that’s obviously something to be
mindful of interest rates have taken up a little bit yields have ticked up
across the board on the Treasuries the Fed is meeting today at 2:00 p.m.
Eastern Time the general consensus is we’re gonna see a quarter point cuts
pretty much across the board everyone’s in the line with that I don’t
necessarily agree with that I think the economy is humming along very nicely
traditionally speaking you would probably be looking to tighten the
interest rate environment not loosen it but you know with the interest rate
environment internationally being interest rates being so low I think the
Fed will look to conform to those rates regardless of what our economy is doing
here so look for a corner point cuts if we don’t get a cut at all we could see
these markets pull back considerably but I think that’s unlikely to happen
so that’s all I got for a market okay well I mean and a lot of that is
pertinent to what the fund is activatable because of the fact that we
actually hold real estate assets in the fund you know we are always watching
those market changes especially rates increasing and whatnot because our
business model and strategy right now is to fix and flip and it does affect
homeownership and you know we are mainly in a market that we are purchasing
properties that are mostly first-time homebuyer properties so when you see
interest rates raised or also cuts in it it does affect what we’re doing so it’s
interesting the the market has definitely slowed down a little bit you
know we are finding that some of our properties are sitting a little bit
longer than they were you know this spring or early summer but
that’s also you know the time of year that’s pretty common so you know it’s
important to watch those things as fund managers so that we can strategize and
pivot make changes in our marketing efforts
and the way that we purchase properties and Rehab them so it all correlates to
what we’re doing here so but let’s get to it let’s talk about our fund this is
really exciting news Eric and I are super excited about it we’ve been
waiting for this for a long time as some of you may know in the past the ability
to invest or deploy capital through our company has been mainly through two
resources one is through the notes there is no requirement in regards to being
accredited or having a net worth of a certain amount to buy a note however you
do have to buy a whole note and you know although we do have minimum loan amounts
of $30,000 we don’t do a lot of those types of deals you know I would say our
average loan is about 70 or 80 so not everybody has somebody or $80,000 to put
in a note the other opportunity was to go into fun too which is still opened
for use and for those of you folks that are accredited fun too is wide open
still open for contributions however you have to be accredited so it did have a
big disconnect with a lot of our clients a lot of people that have small IRA
accounts you know that want to be in that type of environment like the fund
but couldn’t because they weren’t accredited so we’re excited our fund is
fun 3 is a reg a fund and is one of the only in the nation that is a private
equity fund so we’re super excited about it
totally and you know why I guess the question is this why did we go to the go
to the expense of forming a reg a plus funds to bring private lending to the
general public well why would a firm go out of their way to do that I don’t
think it’s any secret to know to just kind of see some of the wealthiest
people in the world are behind large mortgage companies large banks in an
shal institutions that make their money by way of lending money there’s an
extreme amount of wealth there right and there’s no coincidence that you know
there’s no there’s a strong demand from the everyday investor to be able to
participate in the loan market but when you’re working with you know 10 20 30 40
50 60 thousand you’re fairly limited historically and how you can participate
in that in that environment you can’t play with the big boys so this allows
the everyday investor to to invest as a lender right to to be on that side of
the table but but without taking on an inordinate amount of default risk right
yeah you can go be the lender for one borrower on one property but if that
borrower stops paying guess what now you’ve got all of your money tied up in
a deal that isn’t paying you’ve gotta foreclose on the borrower it could
potentially be a headache could you make money throughout that
process sure but just the everyday investor want to go through does they
want to go through that type of transaction and the majority of the time
no they don’t so this fund brings the the venue for
the everyday investor to be the lender but not take on that substantial default
risk that you would in in the note business and I think it’s important to
us to – we preach the circle of wealth and we felt like if if we’re only
bringing this to accredited investors and people that are already wealthy are
we really are we really doing everything we can to make the circle of wealth you
know what was intended to do which was to make the everyday investor wealthy
yeah so that’s that’s my take on why why we we spent a year to make this out yeah
no absolutely I mean I’ve been with the company seven and a half years and you
know in the past it has been only available to the wealthy and the
accredited investors and so you know like I said there was a a big
opportunity for us to do this to open this up to our students our clients our
borrowers our brokers so we’re really excited about it it is called the circle
of wealth fund 3 it is one of a kind we are very rare in the fact that we are
a private equity firm that actually has a reggae fund open to non-accredited
investors so this is super exciting for us we’re gonna go over just a few things
about the fund and then we are going to get to our guest speaker that we’re very
excited about so let’s talk a little bit about the reasons to invest in a private
lending fund number one you’re not the landlord you
know we get a lot of at least in my history I talk to a lot of investors
that have owned rentals or they have fixed and flipped themselves it’s not
that glamorous dealing with tenants and toilets is not that exciting the fund
gives you the ability to invest in that type of an asset class and be hands-off
and let us do the heavy lifting for you there is monthly cash flow our fund pays
on a monthly basis however you know just so that we said everybody’s expectations
accordingly this is a new fund it’s going to take a few months to ramp up we
need to get some notes originated through there and we need to buy some
real estate and fix and flip those to start seeing those profits generating
through their returns can be in the double digits you know we have exists
auric average returns for our other fund of 12% and higher although past history
is not an indicator of future performance this fund will mirror that
fund it’s going to be active in the same assets it’s going to originate notes we
are gonna sell those notes off and retain an interest read so essentially
we are selling off the risk and we’re gonna buy real estate assets in the
Spokane Washington and Coeur d’Alene Idaho market and the business model or
strategy right now is going to be to fix and flip those everybody needs to be
mindful though the markets change we may get to a point where we might find that
it’s more beneficial for the fund to hold some properties so that’s something
we meet on on a weekly basis as fund managers making those types of decisions
number four you’re supporting the housing market and the real estate
investors nationwide it’s interesting we have clients and have put money into the
fund that our brokers of ours and now they’re getting the connections between
the dots saying okay I’m gonna broker more deals because I want the fun to be
profitable and I want to help other real estate investors this is a perfect
opportunity to do this you’re building local economies your investment is
backed by real estate you know stocks and mutual funds and all those types of
things are very volatile yes the market can decline in the real estate market
however you there’s a lot of different strategies you can sit on real estate
you can write it out you could rent it you know there’s a lot of options and
then last there’s no shortage of demand we are
really busy we it’s just exciting times with our company we are hitting on all
cylinders our kogo department is originating like crazy we’ve got an
awesome team of loan officers and loan analysts our BDCs or our business
development consultants are preaching the lee arnold system of real estate
we’re putting on five to six seven events a month right now so it’s a great
time to get involved with the fund and I think that’s also something that sets us
aside we aren’t relying on other sources for our deal flow for our fund
everything is very organic with our company and I think that’s something
that’s really important to point out is you know we we don’t rely on other
sources to send us deals to originate we’re creating those ourselves and
that’s through our Lee Arnold system of real estate and then also through cocoa
and that’s and that’s one of the risks and private lending you know if you
align yourself with a private lender that struggles to attract new deal flow
into the firm what they end up doing is the end of loosening their underwriting
requirements and their LTV start to creep up and up and up because they have
investors that they need to to answer to and those investors want to yields and
if they don’t have strong deal flow they’re gonna create deal flow by
loosening underwriting that’s something that we are adamantly against doing here
we have such strong deal flow where we don’t need to adjust our underwriting
requirements we won’t need to in a recession and in an expansion period or
a contraction periods and so I feel like that’s that student component from the
Lee Arnold system of real estate that is in essence what really separates us
apart from all the other private lenders out there yeah I go to a lot of events
where we have booths and you know their trade shows and whatnot and that is a
common theme that people ask me about our company is they’re very fascinated
by the fact that we have an education company and also an origination in
addition to raising money and being able to deploy because that’s the biggest
concern right you can go raise a bunch of money but that’s half the battle now
you got to figure out how you’re gonna deploy it right I don’t see that as an
issue for us you know we have plenty of deal flow so it’s exciting if you’re
interested in getting involved with the fund again you do not have to be
accredited the minimum to put in as a thousand dollars because those of you
folks that have an old IRA I just had one of our state
she’s like I have had this IRA for 10 years she has $3,000 and it has done
nothing you know this is a perfect opportunity to put that type of money to
work minimum is $1,000 the tie up period is for one year you do have to stand for
12 months if you’re interested you can call Eric or myself here at the
corporate office at eight hundred eight nine eight two seven one seven or you
can go to our website we have spent a lot of money and time and effort putting
a website and a platform together to make it very turnkey and easy for you as
an investor visit our website at secured Investment
Corp I’ve got a picture up of it and you can actually put your contact
information in there and it will actually walk you through making a
contribution if you’re ready to go but if you want to talk to us more about it
we’d be happy to get on the phone with you and discuss that further all right
so I’m super excited this is a company that we at least myself has worked for
for quite some time or with I actually have my husband and my IRAs rolled over
to them but they’re our company called Mountain West IRA we’ve done a ton of
business with them we have a lot of clients that use them they have
wonderful customer service very hands-on extremely helpful probably the best
custodian that we’ve dealt with out there and they were nice enough to get
on the call with us today or the podcast with us today we’ve had I don’t know
about you I’ve had tons of questions about rolling over accounts in the last
week since this fund opened that is not our expertise we’re not tax
professionals so we thought we would bring the professional to you that can
actually give you their expertise advice on that so I want to introduce Diana
Hoff with Mountain West IRA welcome Diana hi Diana
hi yes we’re happy that you agree yes very busy times we do Diana would you
would you bring our listeners up to speed on kind of the process behind
rolling over a traditional retirement account over to a self-directed there’s actually two ways that you can
move retirement money it’s either with a rollover or a
transfer now if you have an old 401 K 403 be some sort of qualified plan from
an old employer or even an employer you’re currently with sometimes they
allow in plans in service distributions but if you have that sort of account
that has to be rolled over with a regular roll over so that is not a like
to like account but if you currently have a traditional IRA a Roth IRA
anything that’s already got you know IRA in it you can transfer those funds
really really simply and there’s no tax penalty no no no taxes no penalties
anything like that incurred because the IRS doesn’t really care who holds your
IRA fun as long as you’re not holding them so it’s a really good way to take
some of those funds that you have that are just sitting and not really doing
anything I didn’t know how little my 401 K was growing when I left one of my old
companies until I was no longer contributing to it and in fact there for
two years before I realized that it had not only not gone up but it had actually
gone down so so self-direction is a wonderful wonderful way to really kind
of actually have fun building your account and it’s much more fun to watch
things go up at 8% 10% even you know double-digit 12 things like that than it
is to hope the stock market goes up instead of going down you know that’s
right if you have oh sorry I’m sorry didn’t mean to cut you off but that’s a
really good point and you you led into something great there so the difference
is between a regular retirement account is self-directed at retirement account
can you touch on the difference by way of like stocks and mutual funds I feel
like you know most of our customers are probably you know used to investing in
mutual funds and and that’s not what self-directed IRAs are all about so
maybe you could touch on that right if you have an account at a large
firm like fidelity or a Charles Schwab they’re great it’s it’s kind of like a
crock-pot you set it and forget it but the problem with that is if you’re
if you’re just in a mutual fund it has a bunch of different things in it and some
of those can go up and some of them can go down and you hope that the person who
is in charge of that knows what they’re doing and cares enough to keep on top of
it because sometimes those who go down everybody knows what happened to the
market in 2008-2009 and oh my gosh at that time
there are a lot of people lost a lot of their money because all they had was
invested in the market the nice thing about diversity is you can play the
market when the market is going up and down but if you also have alternative
assets especially real estate or real estate based promissory notes things
like that that kind of gives you that protection because a solid asset isn’t
going to go away especially real estate people always
need a place to live if you’re in stock market and you have a stock and specific
company if that company goes bankrupt and goes away so does that investment it
just completely goes away if you have a solid asset like a piece of property or
a loan that is backed with property if the worst happens you still have that
asset and even when we had the downturn I had six and flippers who decided to
become holders and they simply turned them into rentals because like I said no
matter what the economy is doing people always need a place to live and they
actually did really really well and came out ahead when everybody else was
suffering so it’s it’s really good to have the capability of having that
diversity and it’s absolutely amazing to be able to get in with only $1000 I
can’t think of anyone I know who doesn’t have a 401k or an IRA languishing away
somewhere that doesn’t have enough money in it to do that sure a great point
so so for someone who’s not who’s never had a self-directed IRA before Diana
what advice would you give them or maybe maybe maybe the customer is nervous just
because self-directed just kind of sounds kind of hey I don’t want to mess
my IRA up you know but what would you say to a new investor that might have
some concerns in that regard well I actually had this conversation with my
daughter the other day she’s in her first job she’s going to college and she
well obviously because I’m in the business
knows all about IRAs and that they are a good thing and that’s kind of most of
her knowledge but she also wanted to know how that direction works so I
explained where that if you have an idea if you have something you know if you
want to invest in what you know self-directed is good for you if you can
find something that you don’t have to be the landlord you know have someone
change the lightbulb things like that then you want to find things like
promissory notes no funds the closest thing to set it and forget it is a fund
basically when you open a self-directed account it’s simply a different type of
investment all the rules are the same all the protections are there that you
would have for any other IRA what’s different is the type of account you
have in it and like I said the IRS doesn’t care who your custodian is so
you can go to the big companies but they do those certain things there’s no
there’s nothing beyond stocks bonds mutual funds the things that they can
just plug into a computer and walk away from they don’t have to babysit them at
all if you go to self-directed because you have solid assets it’s a little more
hands-on and any type of IRA can be self-directed it’s not what type of IRA
it is a self-directed IRA only different from a regular
traditional IRA in that who the custodian is tells you what you can
invest in so basically what you would do is you would open up a self-directed IRA
account then we would do a transfer either a complete transfer a partial
transfer if you just wanted to start out small you could do that too then we move
the funds and that funds your account once your account is funded then we
simply do the paperwork to direct your investment at that point if it’s not the
type of asset where you’re doing the landlords you can kind of step back and
just watch it happen and again it’s like you have invested and you’re just
waiting for the funds to come in the only difference is the type of
investment but it works exactly the same way with all the same IRS and OpenType
okay so Dana what happens if a customer has an IRA at one of the large companies
that you mentioned and it’s actually invested in mutual funds but they want
to they want to transfer the account to you and open up a self-directed IRA what
happens to those mutual funds or stocks basically what they would do is let the
company know that they were going to be doing a transfer they would liquidate
those funds although sometimes mutual funds are considered cash because they
can take out a portion of them without actually having to sell a stock but once
you call them you tell them how much you’re going to transfer they make sure
those are set and then you simply fill out paperwork with us it’s just a small
two-page document and then we initiate the transfer for you there’s no fees on
this side sometimes you will be charged to transfer fee but that fully depends
on the company that you’re transferring from sometimes they don’t charge you
anything it really really does depend on where it is right now
Fargo then once the funds come to you we deposit them right into the account for
you understood and once the funds hit the account with
mountainwest IRA and the investor has identified the investment we’d like to
invest in tell me a little bit about how they determine which form they need to
fill out in regards to a direction of investment do they call you is that on
your website well we would walk them right through it normally people know
what they want to invest in and if they’re investing in real estate we just
send them step-by-step instructions with the real estate paperwork if they’re
investing in a fund we send them private placement paperwork
our paperwork is is not only really easy to follow but if there’s any trouble at
all we’ll always walk the person right through it that’s one good thing about
us even though we’re we’re nationwide we we have clients all over the nation and
all over the world if they’re an American citizen it doesn’t really
matter where you live you can have an IRA we will always walk someone right
through it and when you call us you will always speak to a person you won’t have
to impress one for this or two for that that’s great I do think that you know in
the past clients that I’ve dealt with it is a little scary to them I mean I know
we’re familiar with the forms but it is self-directed so that is the
responsibility the investor and then once those forms are filled out do they
actually submit those to you folks at Mountain West IRA to proceed with the
the investment absolutely we can actually handle every step of the
process and then for instance if someone is doing real estate we’ll get in touch
with their realtor and make sure that they know what is required for someone
to actually purchase within their IRA will talk to the title company and tell
them how to invest it and in just the same way we can make sure that they have
everything they need from like the Sun they’re investing in sometimes they’ll
need a piece of paper supplied by those people so that we have all the
information we need and then it’s just a matter of filling out a brief direction
of investment it’s actually it seems very scary at
first counselors all kinds of new words but truthfully once someone has done it
one I’ve had people that I handheld through the entire process and then they
see something else they want to do and they say and all of a sudden a new
direction of investment shows up in my inbox and said hey I want to do this I
just found this and it’s like oh okay they know what they’re doing now it’s
only hard the first time and we’re here to walk people right through it
excellent yeah that’s great so one other question I would have and
maybe just a comment to make not only can you help them with rollovers but you
can ask actually also help them set up new IRA accounts is that correct
absolutely okay it’s simply we have a starter kit you fill out the starter kit
and tell us your flavor of IRA and and who you want your beneficiary to be and
then once that’s done we just fund the account was either a transfer a rollover
they can even do a contribution okay the nice part is if they’re doing things
in a Roth account all the profit that is made is growing tax-free because a Roth
is an after-tax vehicle you can start with a thousand dollars that you’ve
already paid taxes on and over time that can grow to be you know whatever it
grows to be but you’ll never have to pay taxes on that money again so that’s
great yeah yeah that’s that’s really good information for our clients so tell
us this if they want to get in contact with you folks how can they go about
doing that well they can always go out to our website which is Mountain West
IRA comm or they can simply call and ask to speak to someone on with the business
development team okay they can ask for me Diana
one of our Megan or beyond that okay and I’ve put their contact information up on
the PowerPoint for those of you that are on the podcast you can see that there if
you miss it also call Eric and I well we can get you the information – thank you
so much dianna we greatly appreciate you being
on the call today absolutely thank you thank you and good luck
all right thanks we’ll talk to you soon that was great information was yeah I’ve
had a lot of questions lately and they’re great questions and I just think
that this fund is perfect for these types of accounts I have to tell you
probably 95% of the clients I deal with have some form of a self-directed either
IRA 401k something of that nature totally I mean how many clients have we
talked to you that have 2,000 here 1000 here 5,000 here it’s either all in cash
or it’s in one mutual fund that that’s just a dud take stock of what you got if
it you know sometimes we just don’t even want to look at the statements we don’t
want to deal with it take stock of it if you’ve got some
accounts that are underperforming or you’re just generally unhappy with with
with their situation give us a call let us know what you got going on and we’d
be happy to assist you yeah absolutely again our number here at
the office is eight hundred eight nine eight two seven one seven Eric or I can
both help you with this get involved you have to do something that’s the first
step is taking action I agree and again Mountain West has been wonderful to work
with they will hold your hand through the whole process I can’t speak highly
enough of them they’ve been wonderful for our clients so let us know what we
can do to help you but again the first step is taking action and getting
involved and we’d love for you to get involved with us so please reach out and
we’d love to help you thanks guys have a good day you

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