Question and Answer with...
Kaaren Hall of uDirect IRA Services
A
their jobs and have a 401(k)
to rollover, they typically
think the stock market is their
only option. Their investment
advisor typically has no profit
motive to tell them they can
invest elsewhere. But for
those wise few who look out-
side the box, they find they
have a lot more power and
control over their retirement
money than they thought.
rmed with a 16-
year background in
real estate, property
management and mortgage
lending, Kaaren Hall helps
hundreds of individuals take
control of their retirement.
As president and founder of
uDirect IRA Services, LLC,
Hall educates and helps her
clients invest in real estate
and alternative investments
using their Individual Retirement Accounts.
Hall believes so strongly in the education
aspect of her business that the busy mother
of two travels hundreds of miles through-
out Southern California to attend real es-
tate club meetings and events.
We recently asked Hall to enlighten
readers about the self direction process in
an effort to inspire them to be more proac-
tive about their own retirement.
Question: Why is it such an exciting time
to self-direct your retirement?
Answer: Well if you ask me, it’s always an
exciting time to self-direct your IRA if you
like being responsible for your own future.
Right now is especially exciting because of
the tremendous opportunities in the mar-
ketplace. Even economic down-turns cre-
ate prosperity, and I see that with uDirect
account holders. Because a self-directed
IRA lets you invest in anything (except life
insurance and collectibles), there are hun-
dreds of possibilities. Q: From your experience, what is the
most popular type of IRA, the Roth or
the Traditional?
A: What I observe at uDirect IRA Services
is that most people have a traditional IRA.
The reason for this is that most IRAs are
rolled over from employer plans. These
employer plans are pre-tax plans (the ac-
count holder took a tax deduction for mak-
ing the contribution) so when they rollover
their funds, they find a similar account.
The second most common type of account
is the Roth. People love the Roth IRA be-
cause the gains are tax-free for life. You
can always convert pre-tax accounts to
Roth, by the way. In fact, in 2010 an act
called T.I.P.R.A. created a rule that you can
convert regardless of your income. When it
comes to the Roth there is, however, a cap
on how much you can earn to contribute.
These rules are found on the IRS website
and you can always ask your tax profes-
sional about what type of account best suits
your tax strategy.
Q: Do you still come across people who
are not aware of self direction?
A: I do, all the time! It amazes me that after
35 plus years so many people (even sophis-
ticated investors) do not know about self-
directed investing! I call it the “best-kept
secret,” but of course, it’s no secret at all.
Just visit www.IRS.gov Pub 590, which
talks about IRA guidelines and goes over
the rules. I think it’s because most people
invest passively. That is, they have a job
and put money in a 401(k) and don’t think
about it. Those funds are usually invested
in the stock market. So, when people leave Q: Besides real estate, what are some of
popular alternative investments?
A: Well real estate really is the most popu-
lar investment. Real estate comes in all
sorts of forms. There’s single-family hous-
ing, apartments and commercial property.
Some people like investing their retirement
funds in raw land and some in passive real
estate trusts (REITS). Still others will take
their IRA and use it to lend money to real
estate deals. Some like investing in real
estate options. Aside from these kinds of
investments, I see people invest in private
stock. There are hundreds of private com-
Realty411Guide.com
PAGE 45 • 2011
Because a self-directed IRA
lets you invest in anything
(except life insurance and
collectibles), there are hun-
dreds of possibilities.
panies looking for capital, promising a re-
turn. Self-directed investors find that pre-
cious metals are the right thing for them. A
self-directed IRA can purchase the bullion
and we store it for them. There is a long
list of investment options on our website at
wwwuDirectIRA.com.
Q: Can you tell us about the most cre-
ative self-direction transaction that
you’ve come across?
A: I think the most creative transaction was
a husband and wife who each had a Tra-
ditional and a Roth IRA. They bought a
piece of property using all four accounts!
Husbands and wives are typically disal-
lowed to each other, but as long as they
close concurrently, they can invest together
using IRA funds. It’s not just the fact that
there were four accounts involved (and
therefore 4 wires to escrow) but it’s that
they were also using a land trust. At one
point, the couple realized that the four ac-
counts were cumbersome and decided to
convert the pre-tax accounts to a Roth.
In order to do this the asset had to be
valuated, and then it could be converted.
So now their two accounts share a piece
of real estate through a land trust through
their self-directed IRA. Their proceeds are
tax-free for life.
Q. Do you have clients around the coun-
try or mostly in Southern California?
uDirect IRA Services account holders are
primarily in Southern California but we
have clients from every state. I do a lot of
speaking in Los Angeles, Orange and San
Diego counties and so most of our clients
come from these areas. No matter what
state (or country) a person lives in, if they
pay U.S. taxes, they are eligible for an IRA
and we can help them self-direct their funds
into the investments of their choice.
reWEALTHmag.com