Hey everyone, and welcome to Passive Real Estate Investing. I’m Melissa Nash, your guest host jumping in for now. Let’s dive in. What if your retirement account could do more than just sitting there growing slowly and collecting dust? Well, today’s guest, Amanda Holbrook, is here to blow your mind and your limiting beliefs about what your IRA can actually do. Amanda is a certified self-directed IRA professional and total ninja when it comes to helping everyday people unlock the full potential of their retirement funds. And I’ll be honest, I learned a few things in this episode that totally surprised me, especially when it came to finding money that I didn’t even realize I could use for my own next rental property. If you’ve ever thought I want to invest, but I don’t know where to get the money, then this episode is the one you need to hear. And Amanda’s not just talking about theory either she’s an investor, a busy mom of two, and even her kids have self-directed accounts.
So you guys, I am so excited we are gonna jump right into this conversation with Amanda Holbrook.
——————————————————————————-
FREE copy of The Ultimate Guide to Passive Real Estate Investing.
If you missed our last episode, be sure to listen to Single-Family vs. Multifamily Rental Property
Our team of Investment Counselors has much more inventory available than what you see on our website. Contact us today for more deals.
Welcome to the show, Amanda and thank you.
Thank you. Thanks for having me. Much appreciated. I’m excited. It’s been a while since we had like our gal chat. We were just, you guys didn’t get to hear all the dirty tea that we spilled before we started today. I’m just joking. But no, this is great. It’s a phenomenal topic. So relatable to so many folks here. So thank you again for putting it all together. You’re the best.
Absolutely. Absolutely. The last time I saw you, I’m embarrassed to admit it was, I wanna say seven years ago, right?
In person, right? Like that’s when in person, person saw each other, like in person. And you know, we’ve like talked and emailed and it’s six degrees of separation in this world, you know? But yeah, when I saw your face pop above the screen, I’m like, gosh, that’s so long. <Laugh>.
Before COVID, COVID really did change a lot for everybody’s industry, but with real estate we used to go to so many in-person events and speaking things and it’s been so fun to see them coming back again because we all got so used to our comforts of our home and our, you know, doing everything on Zoom. And then I think people are really craving in person again. And so I’ve just seen so many new events coming up and people like saying, Hey, I’m gonna be here and I’m gonna be there. And I just think that’s really cool.
Oh, absolutely. I don’t, I think we probably like pushed the envelope because I wanna say it was probably fall of 2020. I literally landed, almost got stuck. I was at an event in Puerto Rico and almost got stuck there like three days later they shut everything down. And then I think by that fall it was very eerie. Going out to that first event. It was very it was at this, it was at one of the Gaylord properties, which is huge, right? But it was at maybe 10, 15% capacity. So it was like the shiny
<Laugh>. Oh my gosh. I can imagine.
It was just, it just had a airiness to it. But I mean everybody, we, we did our protocols and all of that jazz and you know, health first and yeah, it, it was fine, you know. But yes, that interaction and I, you know, me, I’m a huge, you know, hugger. I think I had probably PTSD just for not being able to like hug people when I saw them <laugh>.
Yeah, yeah, definitely. Okay. Oh my gosh. So yeah, so hopefully we’ll have to meet up at a real estate event very soon. That would be a lot of fun. There’s not a lot of women in this industry, so we gotta stick together and drag our girl group together. <Laugh>. Okay, so let’s dive into the conversation here. So you have been a, I would call a self-directed IRA specialist or professional. Is that, is that what you would call yourself?
Yeah, the acronym isn’t nice ’cause it’s like S dip, but I am, yeah, I am certified self-directed industry professional. If you’re like the alphabet behind the name if you wanna know what that means. But I’ve been in the self-directed IRA and 401k world for over 15 years now. So for those of you that are listening, I get the question all the time. It’s like, you know, are you a financial advisor? How we’re different is our company is specialized trust company. So my, the funny disclaimer is always we’re a passive custodian to recommend or endorse investment. A sponsor, not attorneys, CPAs over tax advice and legal advice, blah, blah, blah, blah. Infotainment purposes only. You know, but my, my point <laugh> in saying it like that since again have a laugh, is we don’t sell investments, right? I can show you the how I can show you the right tax advantageous account for you, for your kids, for your business, and then how to invest in what you know. So that’s how Melissa and I originally know each other. ’cause I’m the platform that the IRS says that you have to have to invest in what you want to invest in and she’s got the deals <laugh>, you know? Yep. So you can see how it’s a match made in heaven and that’s, yeah, that’s how we met eons ago now <laugh>.
Yeah. Well and what I love about working with you and because we like to educate first, right? That is so important. In fact, we were just kind of talking about this right before we hit the record button, is so many of the people that I work with are new investors who are just now learning why real estate and all the benefits of real estate and they get so excited with the education as they should because we’re not taught this in school. And so the more information and the more education about the options and what people can do is just so important. And so that’s what I’m hoping to do here today is touch on the education of how can people invest with an IRA. Because that’s one of the other things when people are learning about real estate, they’re like, okay, now I wanna do it.
And then they’re like, where am I getting my money from? And mm-hmm <affirmative> And then we kind of go down that trail. We’re like, okay, <laugh>, did you save money that can be invested? Do you have equity in your property that you live in? That can be money. What about an IRA account? That can be money. It kind of like goes through there and then, and then once people get started and then oh my gosh, then from there the options are limitless. So where do you start when let’s say I am talking to a client and they’re like, Hey, I switched jobs and my old employer used to contribute to this, you know, investment account or whatever’s going on. How does the conversation start when I send somebody over to you and I’m like, Hey, Matt is your girl, you gotta talk to her. Where does that conversation start?
<Laugh>? Absolutely. So I always start off by kind of talking about the macro to the micro. You have a old 401k, right? In this example? Yeah. So you have a old 401k Roth, Traditional SEP, Simple. All of those types of accounts can be self-directed. Let’s stop right there. What the heck does that mean? <Laugh>? Let’s just stop right there.
Wait, great place. Thank you. Thank you
Plump them like you’re already getting into jargon. So here’s what it means, guys. The accounts that you had at your 401k provider, and I’m not gonna call out a big bank, but insert big bank name here, they’re all the same. They even sometimes advertise on their platform. Hey, you can do a self-directed account, but alls they mean is you get to pick a stock bond mutual fund yourself off that screen right in front of your face. And that’s what they call self-direction. Okay? Same types, it’s not self-direction guys. Insert sound effect here. <Laugh>, that’s not not self-direction. Self-Direction is when you have the same types of accounts. Okay? Just what I said, Traditional Roth set, simple 401ks, right? Except here on a truly self-directed platform, which is what we do here at Specialized Trust, okay? Same type of accounts, but instead of that itty bitty little sandbox full of toys, you now have the whole playground.
And what does that let you do? It lets you diversify is the word they use in our world, but it lets you do what you want to do. Invest in what, you know, we aren’t born stockbrokers. But you know what, I bet you each of you listening has a floor, a ceiling, and four walls around you. Guess what that’s called real estate <laugh>, you know? So it’s real estate is such an easy plug and play because it’s one of the three basic needs of every human on the planet. So when it goes to, hmm, I’m riding this rollercoaster called the stock market where I’m just buying, I mean, be honest with yourself. You’re just gambling, picking, hoping, praying I’m, I’m trusting the advice or this article that I’ve read or this economist that’s yelling on CNN <laugh>. That’s, that’s what you’re basing your financial nest egg and future on which you have control over that. Melissa.
Absolutely not. Nope. Neither do I, I don’t, I dunno, the company, I have no decision making.
Right? I mean that’s literally, you know, you can have someone just have a bad day in a meltdown, in a boardroom and you’ve lost thousands. You can have someone go on Twitter or Insta and just voice their political opinions and you’ve now lost money. Like that is just not okay. Like when you’re trying to plan for that financial freedom day, that’s usually not in the equation. Like are you okay establishing your legacy that you’re gonna leave to your kids one day to know that they’re good without you in just the stock market? And the answer for most is no. That’s where that diversification comes in. This part is a mindset shift. And I know you’ve had this conversation, Melissa, and when you first say to somebody, Hey, do you ever think about putting real estate in their retirement accounts? What do they, I mean they probably look at you like you have three eyes first. ’cause
You know, well right? ’cause Most people automatically think that, oh, I don’t know how to renovate a house. I don’t know how to fix a toilet. That’s the HGTV person on the screen that’s, you know, doing all stuff. Like I don’t have that background. I can’t do that. That’s what everybody thinks real estate investing is. Mm-Hmm
<Affirmative>. Yeah. Oh absolutely. Like, yeah, that’s funny. I always call it the HG TERs because they’re like, yeah, oh I heard about this or I could use this. The HGTV or version. Like they call that money guy in the car and they’re like, oh yes, I need like $1.2 million to close on this flip. And they’re like, it just shake the money tree. A lot of that money is coming from IRA investors, believe it or not. <Laugh>.
Yes. Oh my gosh. That was…
Don’t show. That doesn’t make the sizzle real. <Laugh> is the fun stuff, right? Have on the backend, you know? Yep. But it’s a mindset shift. You know, you have this rollercoaster, okay, there’s your apple, right? Your rollercoaster of the stock market cyclically, it goes up and down. I mean, I can share stats of what the s and p 500 has done historically. You know, it’s, it’s a long game. I’m sure you’ve heard from a financial advisor when stuff is bad weather, the storm, stick it on out. But if you’re in retirement and you need like consistent, predictable cash flow today, you don’t have time to stick it out. If you’re watching your account go down, it’s like I gotta do something now. And you go to a professional and they’re just like, you can put it in a bond and guys that earns you, like it doesn’t hedge inflation, right?
You’re looking at minimal 2%, 3% earnings. It’s like you’re not, you’re going broke slowly is what that does. Yep. You have to hedge inflation to become ahead, right? A dollar today isn’t a dollar tomorrow, right? So the mindset set shift becomes, okay, well what’s real estate? Okay, let’s talk. It’s tangible, right? Okay. It’s not going anywhere. You can kick it, touch it, punch it, right? <Laugh>, okay, it has two, it says structure and it’s land. I mean unless you’re, you know, on an island where the volcanoes steadily create more land and not creating more land out there. So we’ll always have value, right? Everything can go to, you know what in a hand basket and you’d still have an asset that’s worth something, okay? Yep. People pay rent, okay? Some days you’ll have vacancy, sometimes some months you won’t. You know, you have that consistent, predictable rent check, right?
And how often do you pay rent month after month after month, right? Well when you’re IRA owns that house, you’re getting checks month after month after month in your retirement account. And so that’s one way it grows. Do properties appreciate over time? Well yes they do. <Laugh>. So now it grows two ways. I mean there’s really only two asset classes that do that. It’s like metals and real estate that grow two ways. The other part too, and I think this is overlooked a lot, Melissa, is if you have a home, what do you have on that home insurance? Right? Ah, I see where you’re going with that. Yep. Okay, so let’s paint and I am sorry guys, I don’t mean to be like negative Nancy here, but I’m trying to paint like your apples and oranges scenario. What’s your doomsday scenario? Why do we have insurance?
We can’t control mother nature, right? What if a tree falls on your house or the tenant was a ding-dong and left the stove on nobody’s hurt but you had a fire. What happens then? Are we just toast at that point? And the answer’s no. If your IRA owns the house, who owns the insurance policy? The IRA, so the funds go right back to your retirement account. Worst case scenario, right? I had this, I actually had this scenario happen to a gentleman. He is a client years ago and he was younger software engineer guy and kind of went against his father’s wishes for investing. Like his father was very old school. So since we’re on this mindset shift and he’s like, no dad, I’m gonna diversify. And then he had a fire in one of his houses. No one was hurt, but it was like yeah it was, it was total rock.
So what do you do at that point? So after getting over that knee jerk reaction of oh crap and holding his head in his hands, like we all probably would, it’s emotional reaction. And then you look at the numbers, you know what? After the insurance paid out, you know what he ended up doing? He had two properties for the price of one. How about that? Ah, so if that scenario happened, say there was a dumpster fire in the market, what, what’s your recourse? What happens? Nothing. You just lost your money. I mean, and that just sucks. You know, here’s a tissue, sorry. So sad. Better luck next time. Right? And that’s a reality. I don’t mean to be so light about it, but that’s the reality for most folks. And so when you’re looking at this, you have to look at add diversification and you know, your exit strategy, your exit strategy on socks, you buy low sell high, right?
We all know that one. What’s your exit strategy on real estate? Yeah, exactly. You can buy low sell high, but I mean when you’re talking rentals, as long as that sucker is cash flowing, I mean you could never sell at any time, right? Hold yeah. That’s why they call it a buy and hold, right? Exactly. When you’re in retirement or getting close to or you’re supplementing income, that’s why that is such a awesome asset class. And that’s why we see it a ton in the real estate world or in the self-directed IRA world here because it provides you that consistent, predictable income you’re insured and when and if you sell, okay? One, it’s cashflow so it’s paid for itself, but there’s no capital gains tax when you sell in a retirement account. That’s know I’m all about like if you guys, no that’s huge. You know, my pompoms are, they say team keep it IRAs 401ks.
But yes, I’m all about team keep it. And as Melissa knows, we talk about this stuff inside and outside your retirement accounts. You know, I think that’s one of the big differences working with our team that’s specialized is we don’t just say, oh it’s just one account. Here’s what you can do, here’s what you can’t do. And then, you know, hush, we’re just one member of your financial team. Like yes we are. But you have to be able to zoom out and see the big picture to your point, you know, like, oh man, I only have that, you know, like the client. I only had that one old 401k, maybe it was 70 5K, but the property, you’re looking at one 50. Can you do the deal? Well, if you don’t have enough of your own cash, you can always find a buddy, find a partner. So whether that’s your spouse’s retirement account, could you partner those together? Yeah, it’s just a 50 50 deal. That’s like me and Melissa, we, we go in 50 50 on a deal, right? How are we gonna split the profits? Melissa are am I gonna get 80 and you’re gonna get 20? No way. I would say we’re, we’re partners here. Partners that, that’s not the math <laugh>.
No, it’s 50 50, right? You know, you split the profits 50 50, you split the expenses 50 50, you know, it’s whatever that percentage is that’s just, that’s just partnering. So this is where the creativity comes in. Anything you do outside of a retirement account you can do inside, can you leverage, you can do that too, you know? We’ll, we’ll dig more into that. The point here, just to kind of keep it high level, here’s an exercise for all of you listening, okay? And if you’re not driving, get something to write with. And if you are driving, have your AI assistant take, make a list. Okay? <laugh>. Alright. So what I want you to do is look at your retirement accounts. So whether it was a old 401k, Traditional Roth, if you were in the military at some point they have something called A TSP, A Thrift Savings plan.
Thank you for your service. If you are no longer active, that is something you can self-direct. If you were a teacher at some point, depending on your state, you may have A-A-T-R-S account. If you’re in Texas, A o pers if you’re in Ohio, a CalPERS or Calsters, if you’re in California, every state’s a little different. They all have a million acronyms as you can tell. But those are all accounts. If you’re no longer active there, you can move those. So pull those statements and I know some just think like they said it and forget it. And I mean, I will tell you, you wanna guess what my record is for like old 401ks and IRAs being consolidated. Oh my gosh. Tell me some. And I mean some, if you are in this boat, don’t feel bad. ’cause I hear it all the time. It’s like, oh, I forgot about one.
Oh, I worked here. I think they gave me a match. Yeah, so the record’s 17, I have yet to see that beat. So 17 from one individual. Oh my gosh, so’s why I say this? Because some people when they’re like, especially since we just had like when task time comes around or you’re getting all that paperwork out anyway, I mean, it’s all electronic. I mean, you should have these logins, you should have it, you know, right on your phone, see what you have and what it’s earning for you. And if it’s not like, oh my gosh, which I mean most aren’t, I’ll say that is when you know it’s time to look at a different way. And that’s all this is like what I do here and what Melissa does day in and day out is just show you a different way. And to your point, I love the fact, and this is why I was so excited to do this ’cause you’re so about the education part, and I I am too.
I mean, I tell every single person, I’m like, look, it’s not a matter of if this makes sense, it’s just when you know. Yeah. Because it, it totally makes sense. And it’s usually a page in someone’s book, in a chapter somewhere. You may be listening to this and only on chapter one or two, and that’s okay. By the time you get to three or four, okay? It’s time. It’s just a matter of if you want some today money or you want tomorrow money, right? Yep. It’s a diversification. If we’re talking retirement accounts, you know, it, it is typically all tomorrow money. But if we’re talking today money I do have one trick up my sleeve. Do you know what that trick is? Oh, today, money? No, no, please. I know you have one of these types of accounts. So there’s something called a solo 401k, all right?
And I know you’ve heard of me talk about this a million times, okay? This is like the triple threat of retirement accounts. Meaning that’s a good thing. It’s like the real estate investors, even if you’re not full-time, like if you’re just getting into this, I call it like your side hustle, use a slang term. You’re just creating additional revenue streams. This is for you solo 401k, it is just a 401k for a solopreneur. That’s all. It’s even if you’re in W2 world and they give you an awesome match, take the free money. I’m always gonna tell you to do that. But you can have a solo 401k, guess what? 401ks let you do that.
I don’t even know. And I have one. Please tell me <laugh>
I know.
So please tell me.
This is great news for you. <Laugh>, you can borrow against it. So 401k syou can borrow against 50% or 50,000 whichever’s first. And this is a Department of labor rule. So it’s not me being, you know, big mean Amanda specialized. No, it’s, it’s just capped. Okay? I don’t have any power there. All right? But I’m gonna put on, you know, my Robert Kiyosaki hat here and not Dave Ramsey hat. Okay, thank you. So if you, you have a hundred K in an old 401k, all right? How do we make our money, make money for us? Okay, so riddle me this, you are in your thirties, early forties. When can you take money out to live on what age is it 50? Do you know off the top, top of your head? Is it 55 or 50? Nine and a half? So right in the middle.
Okay. Okay. So 59 and a half. That’s when I always joke and I say, well you drew 21 all over again, right? That’s the the age. Okay? But if you’re listening, you’re like, well Amanda, I’m 42, you know, <laugh>, I can’t touch this money yet. What the heck? Yep. Like, but I want some today money. How can I use it? You can make your old 401k a solo k borrow 50,000 of it. So 50% and then you can take that 50,000 and put that as a down payment on a conventional loan for a turnkey rental property is an example. You’re basically putting it in an investment that’s gonna give you a consistent, predictable monthly return. And guess what? That monthly return you get to put in your pocket. So it’s extra cash flow you’re making today. Money off your tomorrow money. Now, you know, some of you listing are probably like, but you said it’s a loan, Amanda, I don’t wanna take out another loan.
Okay? I hate calling this a loan because I wanna call it forced savings. ’cause When you pay the loan back, it goes right back to your 401k, 100% the principle and the interest. So I know a lot of us, especially in years past are like, well have a home equity line of credit. I’m all about leveraging those two. That’s another topic, okay? But it works the same way except the interest in the principal. Go back in your 401k, you know, that is you yourself back, you’re paying yourself back. Yeah. You know? So that right there, that’s a huge one that I think a lot of folks miss. And I missed it.
I had no idea. This is amazing. Yeah, this is, this is really cool.
Well, we’ll talk after the show here and I’ll show you how to make some of that today. Money <laugh> off your journal
Money. Honestly, I’m like, see this? This is why I love talking to you. I, I’ve learned so much already. <Laugh>, this is great.
I always feel like when you’re having those educational consultative calls with folks, you’re always asking, what are you trying to achieve? What’s your number? What’s the main objective here? And when you’re asking them, they’re telling you, oh, I want cash flow. I’m making this much a month. I wanna be making this much a month and I don’t wanna trade time for money. I always get like the, well of course I wanna save for my retirement. And everyone’s like, but you’re the IE gal. Like I gotta tell you it’s for retirement. No. Yeah. Tell me what you really want and I will show you how you can use these tools to get what you want today and tomorrow. And you show you how to partner accounts, how to like pay your kids and pay less taxes and then partner your kids’ accounts with your accounts on deals so that you give generational cash flow.
How you can use, I love the term OPI and I’m not talking nail polish, it’s other people’s IRAs. They can fund your deal. Say you’re recently an entrepreneur and banks don’t typically love you. Sorry to be crass, but <laugh>, they like your W2 earners, right? Yeah. They want two years of tax returns. So you’re like, crap. Now I’m, as you know, up that creek without a paddle. How am I gonna get money? Well, guess what? There’s a lot of money in IRAs. They can fund your deals, you can be the bank. So with real estate as far as like turnkey rentals, construction lending, and you’re not just limited to this stuff, guys, I know that’s the topic for today, but it really is invest in what you know. So if the stock market isn’t giving you the oohs and ahs and giving you that beach life or whatever that picture is for your retirement or getting you in that direction and the needle’s not moving at all, or it’s moving backwards, that is your wake up call. I can’t like find a bigger bruise to push on you <laugh>. Like, and this is the other thing that I loved. ’cause I mean what you’re doing Melissa, it’s passive investments, right? Yep.
You consider it as passive as possible.
Well that’s exactly where I was going. Okay. You can’t be 110% passive even about your passive investments. Okay? But it’s not like I always love the, you know, your HGTV or okay, yeah, I’m gonna do a side hustle and I’m gonna flip like 10 properties. I’m like, that is not a side hustle. That’s another job. And if you’re trying to do it to spend more time with your kids and family, like you are just, you’re going the opposite direction because it’s a lot more time intensive than the TV show puts on <laugh>. Okay. <laugh>. Yep. You know, so you may want to experience and dig into something that is more in the passive category versus the active category, you know? Yep. And that’s why it’s a great option for folks to look into. I mean, guys, real estate since the beginning of time has always been the commodity.
It’s land, it’s housing. I mean, literally since the beginning of time before the stock market was even a thing, like how our country was created was over land. Okay? Yep. And real estate. So when you’re thinking of, and this is going back to that mindset shift that you’re conditioned to have to have all of your eggs into the stock market. That’s wrong. You know, like you do not have to do that. And you have the control and the education to figure out how to do it. The most important thing you have here, and I don’t think this is stressed enough, is the team. Yes, you can educate, right? And you can read and listen, et cetera. But I’ve seen it time, time again and I mean, how many times have you seen analysis paralysis where it’s like you’re beating your head against the desk like <laugh>
So much and it’s, it’s because people try to do everything themselves and mm-hmm <affirmative>. I get that mentality, you know, a type personality right here. That is me. I feel like I need to know everything first and I need to have all the answers first. And that’s why I failed. I tell my listeners this all the time. I failed in real estate the first couple times I tried. ’cause I tried to go it solo. I tried to do it on my own. I thought that I had all the answers ’cause I read all the books or I, you know mm-hmm <affirmative>. Well, in the very beginning I didn’t do any of that. Number one, that was the problem. Zero education, <laugh>. Then once I started searching for the education, you know, you think that, oh, I can’t, I, I don’t know who to talk to. And I hear this too. People are like, how do I trust somebody that’s trying to sell me something? Well, sometimes you do have to pay for that good advice. I mean, that’s just straight up honesty. Yeah. Like the best advice out there. It’s not always free. There’s good education out there that’s free like hello podcasts. But sometimes you do have to pay to play and you do have to pay the right people, but they’re gonna get you there faster. They’re gonna get you there. Less mistakes, less risk. And so yeah, there is a certain balance to that. Absolutely.
Yeah. I always use the analogy, and you can tell I have a young son. It is like you’re avenger squad your financial Avengers team, right? It’s the who, not the how. Like I’m still learning. I’ve been in this industry 15 years and I still learn new things. The same with real estate. Like every deal, every investment is going to teach you something. It’s align yourself with the right team, the right companies that will give you that shortcut, tell you like it is, remove the obstacles so that you can hit play and get the return sooner. That’s, that’s the key. Because if you’re constantly in learn mode, okay, alls you’re doing, and I always, I joke in my disclaimer and say infotainment on purpose, <laugh>, because it’s like you can get all of the information and I mean, I don’t think I have to say it out loud. I’m a big freaking nerd, you guys. I love learning stuff. What I also love is taking that complicated topic, breaking it down into freaking plain English. So much so like my 13-year-old can explain a Roth IRA, like if my 13-year-old can understand how a Roth IRA works and how rental properties give you cash flow. Now she doesn’t quite understand the tax benefit piece yet as far as depreciation and all of that. You know, Hey, I,
I don’t, I don’t think anybody knows everything about taxes. I don’t even think our government knows everything about taxes. We don’t have to.
Like that’s the thing. Like you don’t have to, you just have to know who does. You know, right. That that’s the key. And you’re correct. Sometimes you have to pay for advice. Don’t get stuck down the, the path. And I don’t know if I ever shared with you like my little, I don’t know what I would even call it, I’ll call it my own meme <laugh>. Like you have your, your gurus and you have your dorus. Make sure you are with the dorus that are actually doing the thing that they’re teaching so that you can learn from others’ mistakes. And it’s just a shortcut. That’s it. Like I’m gonna date myself like I loved CliffNotes as a kid. Now it’s like chat GPT, it’s all done for you. That’s a whole nother topic. But give me the summarized version and I know where to get the long version, but give me exactly what I need to know to get the A right.
Okay, well give me exactly what I need to know to make the decision. If I’m going into this market or that market or this property or that property or this much in stocks, this much in real estate, that’s all it takes. And I hate using baptism by fire. But you learn better from doing, I can sit here and you know this about me, I can SOP and KPI all day long. Meaning like how we operate our business. It’s all SOP. For those of you that don’t know what the heck these acronyms are, it’s, you know, standard operating procedure is just fancy for checklist, <laugh>, that’s all. It’s <laugh>. It’s just fancy for checklist. So for all my post-it lovers out there, I gotcha <laugh>, okay.
The kpi, key performance indicators. So we’re watching the process and sometimes you gotta tweak it a little and that’s okay. That is exactly what your investment experience is gonna be like. You may do your first, and you’ve had this experience as an investor too, Melissa, like you said the first couple, it’s like I fired myself from doing all the things and that’s probably one of the hardest things to do. I was, I’m a type A, I’m like steadily going into a type B. It’s like that done is better than perfect, but I like building the system so it as close to perfect as possible. <Laugh>, I think that’s where I’m, I’m adjusting to that <laugh>, that period. Yeah. Yeah. I think with all of us, that that is definitely a shift and just a conversation to have with yourself as far as the diversification goes. I mean, do yourself a favor and just have the conversation.
You know, like I’m sure we’re gonna have like contact info and all of that stuff in the show notes here. Like, yep. If you, if you listen to this and Melissa, I know you do the same, I give you the same time that you’ve given me whether I know you, we, you’ve listened to this or not, to make sure that you have that personalized, you know, action plan of okay, here’s where you’re at, here’s where you wanna be. And sometimes self-direction makes sense. Now, like I said before, sometimes it makes sense in chapter five, chapter 15, right? It’s just a matter of when it makes sense. It’s not if, but if you fail to plan, you plan to plan, fail, fail. Like you have to get that action steps written down your own SOP for your own, whether it’s your financial future, your monthly cash flow, your retirement, leaving stuff to your kiddos, getting stuff going for your kiddos.
So then what you can do as putting my mom hat back on, I can go back and show my kids this stuff and I’m showing ’em at a young age. ’cause I don’t know about you. I don’t want them to have to learn the way that I learned. Yep. And I don’t want them to have those boo-boos. Like I want them to know right out of the gate, it’s okay to fail and fail fast. Right? I’m sure we’ve all heard that. But I mean if you can avoid it and profit in the meantime, yee-haw <laugh>. Right? And I say that because we’ve all had, especially in retirement accounts, we all try to like, okay, we’re gonna go off of the beaten path. We’re gonna pick this stock and like, oh, it did good until it didn’t. <Laugh>, right? <Laugh>, I think we’ve all guilt guilty of a Robin Hood account right here. <Laugh>.
I, I think we’ve all done that. I mean, let’s just be honest with ourselves, you know, but that is the type of conversation that not only you have with yourself, but you have with team members like myself, like Melissa, to say, Hey, it’s cool we’ve all done it and we’ve done good stuff and we’ve done stupid stuff. We just don’t do repeat the stupid stuff. Right? You know, it’s, yeah. Have, you know, going back to the education, have the conversation, create the action plan and execute. So have your smart objectives. Set a timeline and do it. So if on your goal list it was, I’m gonna get into two rentals this year. Okay? All right. You’re gonna get into two rentals by when, you know, I don’t wanna say the date, so this is evergreen, but find out where you’re at in the year and like put a deadline on it and then reverse engineer that, okay, to get to two rentals, what do I have to do?
You know, okay, well I gotta figure out where the heck my money is first. <Laugh>. Like that’s always your first step is figure out the money. So whether that’s getting a self-directed IRA, getting financing, getting a HELOC on your, you know, primary et cetera. And then, okay, what’s step two? You get that? And I’m usually in that step as far as the fund and what numbers you need and start looking at properties. And I think that last part, which you touched on is when you’re picking your team as well as an asset in a market, it’s trust but verify, right? Yep. And this is a horrible analogy, but I’m going to use it ’cause your listeners are pretty cool, right?
<Laugh>, they’re the coolest. Absolutely.
Throw It, throw it down, throw it down for us.
I just don’t want this to bite me in the butt. <Laugh>, but you…
No, nope. We’re all cool here. Throw it down.
Okay. So I mean we’ve all, we’re young dumb in our twenties, right? Okay. May or may not have had that fling that one night fling, or you may not have, okay? So probably didn’t put too much effort into that. Not too much trust, but verify into that. Just saying like you should, let’s all be smart, okay? But now if you’re married, okay, you went out on a couple dates, you gotta know the guy got to know his family. You know what you did? You qualified that sucker because that was gonna be a long term relationship, right? Guess what retirement accounts are guys? They’re long term relationships. Guess what buy and holds are? They’re long term relationships. So yes, you ask the questions, you get to know the people you are working with, just like you would put more time into the one you’re gonna marry versus that one night stand <laugh>, I know that is a horrible analogy, but it’s one of those times in your life where things weren’t so serious and it’s like, oh, it’s just that same logic. Okay, not exact same, but you get where I’m going with this <laugh>. Okay,
No, I love that. I love that. That is actually a brilliant thing. I, I see that, I see that mistake honestly so much. People just jump into things and do things and then they point fingers and they wanna point blame and everybody else. And I’m like, you had all the time in the world, you know what I mean? To meet the right people and the introductions were given to you or you didn’t ask. And you know, I see that so much.
I have a big one there. Okay, so <laugh>, this is a, like what I do. They are self-directed IRAs, okay? It is on you <laugh>, okay? Like the success or failure is on you and you have to be comfortable with that accountability. Let me be clear. It’s your money anyways, whether it’s in a self-directed account or not. So it’s on, it’s your money, it’s already on you. Okay, newsflash.
Yeah. Right?
But it is, I always explain that this is a self-directed IRA or 401k, it is not a done for you and you do nothing. Ira 401k, nothing in this world worth anything is like that. Let’s be real. Like you’ve gotta put in a little bit of the work, okay? You have to be accountable. One thing I’ll share, I probably shouldn’t, like my team’s probably gonna kick my butt specialized <laugh>. But it’s like, who was not meant to have, have a self-directed IRA? I’ll tell you. Ooh,
Great question.
So someone that is not, and this is probably the same with like doing your own investments. Someone that is not comfortable making decisions for themselves or having that accountability. Like if you find yourself in the victim blame game seat of that finger pointing like self direction’s probably not for you. ’cause It is on you to make those decisions. If making a decision gives you so much anxiety that you’re just like, Ugh, I can’t sleep at night and you know, I can’t eat like this is not for you. Like, it will not be a pleasant experience and that’s okay. ’cause It is not everybody’s cup of tea to be able to make those decisions. I’m sure you’d never hear this from a custodian, I will tell you that. But I, we want you to be comfortable and empowered and we will pour all of the education and resources into you so that you don’t feel like you’re on an island making decisions. Like I have a whole team in Albuquerque, because I think most, and Melissa, you’ve been through this process, it’s they, they worry about the logistics. Like, okay, first I’m gonna tell you the A to B2B two C in super detailed. Then when you get with some, when you get with like a Melissa and they say, okay, here is your, you know, this is the property you are gonna be, oh my gosh, I’m getting my first rental. What do I do now? <Laugh> like, you are not going to remember anything I said <laugh>,
I’m just being real. You won’t, you’ll be all excited and you’re like, oh crap, I forgot everything Amanda said. What do I do now? Yep. You know what, we have a whole team like that will walk you through, Hey, you have your contract, this is the name of your retirement account. This is where you have to send your earnest money. And this is, you need to make sure you have your insurance, your property manager agreement, everything’s in the name of the IRA all the way up into the closing table. And you guys have rockstar teams that you work with that walk you through that as well. So you’re not a loan soldier trying to figure it all out on your own. Right? And I think that self-direction, like when you hear that and when you’re looking into diversifying and doing something that your trusted financial professionals have told you, the opposite of your whole life can be intimidating. Especially if that’s not your wheelhouse. So don’t let that scare you, like bust through that fear. Just because you’re doing something different doesn’t mean it’s wrong. Just because you’re going out and doing that different thing doesn’t mean you’re doing it all on your own. Yeah. I think that’s, that’s very important. Well,
And asking questions too, like, it’s always the hardest conversation to have after the fact Somebody’s done a transaction and they, you know, they closed on a property, whatever, and then they come back and go, oh, well now I have 10 questions, questions. I mean, it’s not that I’m saying it’s too late, but like the time is before. So going back to any investor that I talked to from the very beginning, those are the time to bring up questions. But then you’re gonna have more questions and then those answers are gonna have more questions. And so that’s why you need to talk to the professionals to figure out a, what they, what the answers are. This is for you, but then also is that gonna spark more questions along the way because there’s things that you don’t know that you don’t know mm-hmm <affirmative>. And so having the conversation with you and your team to go, Hey, is an IRA, whatever self-directed, is it for me? Can I do it? Do I have <laugh> an IRA somewhere that I don’t know about <laugh>
You know, but, but these conversations are gonna spark new questions. Mm-Hmm <affirmative>. You don’t know what they’re going to be until you have those conversations. That is huge. Yeah.
My silly analogy, and I don’t know if I made this up one time, but it’s like, you know, you never really wanna be a ripened fruit because all you have left to do is rot, right? <Laugh>. Like you always, you always wanna keep growing and learning. The other part too is you learn by doing, you know? Yeah. And we all learn differently, but once you go through like your first investment property, you’re like, oh, like you don’t even need all of those checklists again. And a lot of us learn differently. Like my daughter, I could show flashcards too. She can memorize everything. My son, he’s more hands on, what do they call it? Like a kinetic learner. Gotta have motion and activity to it, physicality and he’ll remember it. It’s just they learn differently. He learns through doing, she can just look at something and remember it.
Some are a hybrid of both. The point is you learn, you ask the questions, but take freaking action. Like do something, don’t sit on the sidelines. I’m sorry, I’m banging my desk. It’s making a horrible noise. But when you’re, when you’re, you do something now you are going to have a result. It’s hopefully great, but it may not be so great. But now you have experienced that and you are going to learn and grow from that profitability wise as a person, as an investor, as a business owner, all of the above, right? You know? So I think that’s the most important part is just start somewhere and take action and you will still continue to learn. It’s not like college and then you just take the test and you get the diploma. That’s it. Horrible. <laugh>. Horrible to think. I mean, I’m not against college <laugh>, don’t get me wrong.
But my point is that it’s not the mentality for investing. The one thing, if I can give you guys like one piece of advice, like where do I start? Or I, Amanda, I’m listening to this stuff and I’m a newer investor, or I’m young and I need to start putting something somewhere, where do I begin? Okay, here’s my always start on the, because there’s personal and business guys. When you hear 401ks and IRAs, just so you know, the difference 401ks are for businesses. So you gotta have some earned income, even as a sole proprietor or an LLC. But for an IRA, all of you listening here, sorry, Canada, if you’re listening, you can’t do this. But <laugh>, okay? If you have a heartbeat, earned income and a social security number, you can have an IRA <laugh>. Those are personal accounts, right? Even I could show you how to give the, like, kids can have these, they need the earned income.
That’s, that’s the secret sauce. Okay? But a Roth, IRA, you know, you guys will hear me say Roth, Roth Roth, Roth Roth. Why? And some of you listening may not know what that means. A there’s two tax environments. One’s kick the can down the road. So when you take the money out, one, we’re 59 and a half and older, we gotta pay the tax man on everything. How the earnings, the principle, all of it. And that sucks. Okay? So late nineties comes this rough. Here’s the other tax environment, okay? You pay the tax on the seed when it’s 80 50 and not the crop. So when you take the money out at 59 and a half, you do not pay a dime in taxes. It is what I call, and you can mock me on this. I, I hope that you will tax free. And yes, if you are in your car or listening, say tax free out loud and annoyingly like that, and you will be smiling all pretty, because we do not want to pay taxes.
If you can get tax free growth, you are winning period. Okay? If you’re investing in real estate stocks, whatever widget, if you’re investing in the profits are tax free, you are winning my friend. Okay? So the more you can get growing tax free, the better you are. What is tax free growth? What, what account? A Roth IRA who can have one? Anybody with a heartbeat? Earned income social security number. Now the IRS only lets us put seven 8,000 a year, which kind of sucks. They limit it, okay? So if you’re coming to me and you’re like, oh, I’m 57, I never did any of this. Can I take 500 K and just pop it in a Roth? No, you can’t. Okay? So start now. But my point is, if you’re saving money and you’re not quite sure what the heck you wanna do, investing wise, that’s okay. Like, be okay with that. You’re just at that part in the journey, okay? But if you’re saving money in a savings account, what’s a savings account earning you these days, Melissa?
Oh 0.001
Yeah, nothing. I mean, it’s not a lot. You know, even the high yield stuffs like in the threes, okay? Yeah. So it’s, it’s low, all right? It’s not hedging inflation, okay? So you put money away for a rainy day. That’s why you save that. I, I joke and call it the O fund, right? <Laugh>, something happens. Oh, oh, you got money, okay, <laugh>, yeah, money. You put in a Roth, IRA that 7,000, can you take it out at any time? That’s good. I don’t know. Can I actually penalty free? Well, you take money out of a savings account, tax free, penalty free at any time, right? That’s the fund. Well, guess what? You can take money out of a Roth. IRA, the contributions only, that’s why I’m saying seven K at any time. Tax free. Penalty free. It’s just the earnings that have to stay in there until you’re 59 and a half.
Why they don’t shout this from the rooftops? And this is what you have the crazy economists screaming about on CNN. I do not know. But everyone here, including children, ’cause I mean play with a compound in interest calculator. You’ll see why I am saying this slowly is start with a Roth IRA. You can put 7,000 in, invest accordingly if you have that moment, especially if you are younger, okay? You can take the money out. It’s just the earnings that have to stay, right? That is where everyone should start, okay? And how can you grow it? You can grow the traditional route, you can grow it in real estate, you can grow it with tax lanes, whatever you see fit, you can, you know, you, you and your buddies can be private lenders to each other. Like these are things that you can do that you probably aren’t aware of.
So that is my like PSA of the day, if you will. Like, yes, diversifying your retirement accounts is phenomenal. Real estate’s an awesome choice. You have to have a special platform to be able to do this. Specialized Trust Company, that platform, I’m happy to help contact info’s in the show notes, specializedtrustcompany.com. Find me there too. Lastly, and the key is, is just take action for yourself. Do the one thing, set the goal within the next 30 days, I’m gonna have a conversation with Amanda, or I’m gonna pull my retirement account statements, or I’m gonna get on Melissa’s calendar and see what a rental property might look like for me. Just set the timeline, set the goal, and do the thing. It is not hard to pick up the phone call. I’m gonna even let you cheat and give you a link to my calendar so you could take the scariness out of it. I know, I, I fear, I mean I, I’m raising a teenager now, so I’m fearful with some of their communication. I’m like, you guys do need to talk to people. You’re not gonna be able to transact via text your whole life. <Laugh>,
Right? That’s, that’s valid. Very, very valid. <Laugh> very valid.
But no, this was phenomenal. What else did you wanna add before we wrap?
Oh my gosh. No, this was all perfect. In fact, I was going to ask you the last question that I didn’t even have to ask you and you guys that it like wasn’t like choreographed, like I didn’t tell her like, Hey, talk about this. Like literally I was thinking about that because my kids are older, they’re graduating college, they’re finding their forever jobs and they’re now making these decisions. And I’m thinking about that generation now of what should they be doing? Where should they be putting extra money and savings? And again, I learned something new from you. I did not know about the Roth IRA that you can take out that investment. I had no idea. And again, you guys, we are not taught this stuff. I don’t know why this stuff isn’t taught in school. I don’t know why I have the conspiracy theories on this.
Of course, <laugh>, because, you know, we are taught and raised to be workers, not necessarily entrepreneurs or to get out of that system to be financially free. And so we have to actively search for this information. And this is why these conversations are so important for not only us, but for our children. We want to give them that leg up and we want to teach them financial accountability and we want them to have time freedom and all the things. And that bit of information was so awesome and I’m so glad that you said that. So thank you. Thank you for that.
No, you’re very welcome. I appreciate, I love everything that you’re doing. I’m so glad to see you just thriving and sharing and like all of the things that your personality has always just, you’re, you just have that helpful soul. Like anyone that ever interacts with you, it’s just like, oh, Melissa, so great. So I love all of the things that you, you’ve touched, you’d be able to produce and create is just phenomenal. And yeah, I’m glad to see you continuing on this journey ’cause that like is your gift. Aw, you definitely have a gift for that because not everyone has that, you know, sorry, I don’t mean to get all mushy, but, you know, well, I appreciate you doing this. Like, I’m a big, you know, attitude of gratitude and that’s, that’s huge. Huge.
Aw, thank, well right back at you. We girls, like I said at the beginning, we gotta stick together and we’re doing this out of, obviously we all make livings in real estate, but it’s much deeper than that. And that’s what comes across with you and why I resonate with working with you so much. So anyway, so again, Amanda said this, but I’m going to repeat it, check out the show notes. We are going to have a link for you guys there. So go ahead and click on that. We’re gonna put you guys in contact with Amanda and her team. Just have those conversations. Don’t be scared. No, nobody’s twisting your arm. It’s, it, this is your time to ask the questions. Is this right for you? Does it make sense for you? Can you find old accounts that you may or may not even know exist? And all those questions, all the nitty gritty there. I guarantee you there is not a question that Amanda and her team have not heard if there is, right. I’d be shocked if there’s a new question that they have not heard. <Laugh>.
Yeah, usually if I hear something that like, I have not heard, like I’ll go on social media with it, like, oh my gosh, you guys listen to this.
<Laugh>, thank you so much for being here today and sharing your knowledge with everybody.
Download your FREE copy of: The Ultimate Guide to Passive Real Estate Investing.
See our available Turnkey Cash-Flow Rental Properties.
SUBSCRIBE on iTunes