Welcome, everyone. Happy Tuesday. Thank you so much for taking the time to join today's webinar. Today, we're gonna be talking about the ten benefits of multifamily investing in your retirement account.

It is top of the hour. So I do wanna go ahead and get started. I'm Renitha Lightborn, with Advanced IRA, and I'm delighted to be joined by, multi family for Joseph Kimra of Apex, real estate investments. So thank you so much, Joseph, for being our speaker today.

Thank you. I'm happy to be on.

Okay. Absolutely. So today, Joseph is gonna cover some of the advantages of multifamily, multifamily investments such as, you know, economies of scale crew purchasing, of course, being able to maximize, as of, passive income. But before I turn it over, I do wanna kinda give you a general overview of what's self directing, your chirement account is, how it works, and, of course, the process to get started with us. If you do have questions, feel free to type those in the question box We will allocate some time at the at the very end of the presentation to get those answered for you.

So, again, my name is Renee live going. One of the business development specialists here at Advance, since two thousand nineteen.

Also an Advance client prior to joining have. So self direction is something that I personally and actively do. If you have questions, you wanna do a deeper dive, talk your talk through your scenario.

Feel free to give me a call, send me an email, or you can visit advance at ira dot com to, schedule a consultation.

So just a little housekeeping before we get started. Just know that at Advance, we don't give any tax, label investment advice. All of the information that we're gonna present today is just more so for educational purposes. So as always, we encourage you to do your due diligence and consult with your professional team. Whether it's your attorney, your CPO, financial advisor, before you make any investments.

So just quick takeaways, just note that any IRA form an employer tag qualifies I see self directed.

When you self direct, you're always in control, meaning you get to decide what is it that you want to invest in. Today, we're gonna be focusing on multifamily investing.

And then, of course, any income that's generated from that investment flows back into your retirement account, if there's any expenses associated with that investment. It is paid out of that IRN account.

So just a little history about it, Manton, who we are. We've been in business for twenty plus years now as one of the leading health directed ira administrators in the business. While we don't give any, you know, legal advice, we do have a team of attorneys on staff and as well CISP certificate certified, individuals.

At Vanstar headquarters is located in Largo, Florida, which is Tampa Bay, advanced, we also have an office here at Atlanta, which is where I'm based, but we do work with clients nationwide, as we all have almost about ten thousand clients now will over two two billion under administration.

If you have a cast sitting in your account with us, I do know what it is. FDIC insured I know, recently a lot of people have concerns about SCIC insurance, with us whether you have above two hundred and fifty thousand because it's spread across the full trust account All of your funds are secured with us as long as it's sitting in cash. And then, of course, in advance, we celebrate ourselves by providing our clients high quality concierge cell service. Meaning you have a dedicated account manager, a direct point of contact that's gonna be with you for the life of your account with us. And then, of course, we have educational content that features on guest speakers such as Joseph to come command and knowledge share with our audience.

In addition to hosting a weekly webinars, which is This is going to be uploaded onto our YouTube channel within, within the next twenty four, forty eight hours. We also have other events which include our pitch remote prosper, online networking platform.

So I would encourage you to check our website to sign up for that. My colleague Alex also host a a podcast. So I would strongly encourage you to I if you have an interest, feel free to check that out. And then our blog features also laid trans in use relating to to self direction.

So exactly, what is the self directed IRA? Just very simply, so erosion just means that you, as the account owner, you don't have complete control over your time and funds, you don't have complete control over the investment decision, but also too, it really allows you to truly diversify outside of the traditional stocks and bonds. You can use IRA funds to invest alternatives, which includes multifamily or apartment complexes.

It can be single family homes. It can be tax liens, notes and mortgages. It could be private equity. Purchased metals, oil and gas. The list goes on and on in terms of what's on the table for you.

So, typically, I hear a question of, you know, why do people choose to self direct. It's many different reasons, but I'll just touch on three of them. One, it can be a new source of capital for you. So if you have funds that's sitting in an old four one k or an existing IRA, you wanna diversify. You can go ahead and move as as little as you want to and need you to make that next investment.

Two, the ups and downs of volatility in the start market. Obviously, right now, it's, you know, very, sensitive. With, with with the stock market, you can elect to move a portion of those funds to go out and buy real estate because we know, again, people are always gonna need some place to live, and that includes, obviously, multi family, apartment complexes. And then, of course, the tax benefits. Cutting those rents, those profits, those dividends, flow back into your retirement account, tax free or tax deferred depending on the type of account that you have.

The different types of accounts that can be self directed. It's the ones that you're already familiar with, for individuals.

You can self direct a traditional IRA, meaning it's tagged deferred. You get the tax break upfront. You pay taxes, once you take the funds out at retirement. Whereas with a Roth IRA, you would like to pay the taxes upfront.

We'll grow your account over time as long as you've held that account for five years and your retirement age of fifty nine and a half. When you take those funds out, it's tax free.

If you are, you have a small business, you're an entrepreneur, you have a side business. You can look to self direct steps, simple, solo four one k's, A lot of, active real estate investors or real estate professionals really like, the solar four one k because you have, great flexibility, high accountability show elements. If you do wanna know more about that, we can certainly jump on a call and and do more of a deeper dive on that. Some lesser known accounts that can also be self directed or days to cover, educational, education related expenses for your kids, grandkids. And then, of course, on HSA's as well, as long as you have a high deductible insurance plan, you can look to to self direct your retirement account, your HSA account. And then, of course, any former employer plan, whether it's an old four zero one k, four zero three or TSC plan or pinching plan. You can elect to roll those over to to self threat.

And for twenty twenty, twenty twenty three, the contribution limit said bump up. I do wanna reference next month is the tax deadline, so you can still contribute for twenty twenty two. If you haven't already, But for twenty twenty three, for traditional Roth IRAs, you can a combination of you can put in a total of six thousand five hundred that you're under the age of fifty. Seven thousand five hundred if you're over the age of fifty.

And then starting in twenty twenty five, with the secure act that passed earlier this year, Between the ages of sixty and sixty five, you have an additional ten thousand dollar catch up. But again, that portion doesn't, that doesn't start until, twenty twenty five. If you have a sep IRA, you can contribute up to twenty five percent of your earned income, not to exceed sixty six thousand, so low goal in case same thing. You can contribute twice.

Once this worker, once it matches the owner, when you combine the two, you can contribute up to sixty six thousand. For ESA, there's two thousand per year for child for HSA for individuals. You can put in thirty, thirty eight fifty, and then, of course, has family plan, you can put in seven thousand seven hundred and fifty. If you're fifty five or older with an HSA, you can put in additional thousand dollars.

But also smooth ops and get started is pretty straightforward. When you're ready to proceed, step one, first and foremost, fill out the application to get your account open with us, You can do that directly on a website or myself or one of my colleagues can send you a DocuSign link to where it comes to do everything that's needed. We do assign you a dedicated account manager.

And then, of course, step two is funding your account. You can fund your account using a combination of making an annual contribution as long as you have earned income, transfer from an existing IRA or doing a direct role on an old four zero one k or other employer plans. And then finally step three, what is it that you want to invest in? At advance, we don't have a list of investments for clients to choose from. You have to decide or find what it is that you want to invest in. In this case, if it's multifamily, your account manager with us will help you dot those eyes, cross those teeth, make that invest in to make sure everything's properly entitled titled title.

I'm sorry. Make sure it's properly titled and invested in the name of your ira. And then, of course, with that, I'll go ahead and turn it over to our feature speaker.

Joseph, just bear with me. Let me make you the presenter.

So Apex's real estate investments is a probably held equity investment company, and we work with, different syndication groups and invest, in their deals as equity partners.

So some of the benefits of investing in multifamily that I'll be going over today is group purchasing the ability to leverage operational efficiency, force depreciation, return of capital, passive income, tax advantages above market returns and edge against inflation. And I go more in detail with these as we go.

So group purchasing Investing multifamily is very capital intensive.

So by investing into, let's say, syndication, it allows a number of people to combine their capital and then to have access to purchase a larger and potentially more profitable real estate investment.

So, for example, not everyone is gonna have millions of dollars to just go out and acquire a hundred and fifty to two hundred unit apartment building, but by taking their money and pulling together, now everyone can have ownership of that building.

That invested.

So the way that works is the lead investor or the spouse, they identified a property, they conducted due diligence in the underwriting, then a secured property management, they organized their investment capital, and then they're required to guarantee the loan for financing the property.

Also, the sponsor on the projects they're the general partner And so they're responsible for overseeing the operations of the property and providing reports to the limited partners, which is you all.

The passive investors, which are the limited partners, that purchase a fractional ownership in the property, they have no debt liability and no management or operational responsibilities.

Basically, you get all the benefits, but you have none of the risk.

So, the second part, the second benefit, the ability to leverage So investing in multifamily allows investors to use debt more strategically than with single family real estate investing.

Some examples to this is, in most cases, when buying an existing multifamily property, the finances non recourse and does not show up as a liability on a financial statement.

Also, the general partner or any LP investor more than twenty percent ownership, acts as the guarantor on any bank financing for the property.

Now, the third part is the passive investors.

The third part is the passive investors or limited partners, They get the benefit from the leverage in the bank financing without having to guarantee any loans.

And then also the ROI to the investors are significantly greater as a result of the leverage used to acquire the ability.

A third benefit is operational efficiency.

So investing in multifamily provides economies of scale and operational efficiency at affordable costs compared to single family investing.

So the property is professionally managed with on-site property managers, a leasing staff, and maintenance.

So just like, you know, if you walk into your regular apartment building, how you have those office managers, leasing staff, and the maintenance crew running around fixing things, Those are the kind of buildings that we're acquiring.

The GP, they act as the asset manager and oversees the property level management.

And then this also provides the best economies of scale because the values are on properties with a hundred plus units.

So by purchasing larger apartment buildings, it creates a better ROI for the investor.

Another benefit which is the fourth one is forced appreciation.

Now, the value of a multifamily property can be increased by reducing the operating expenses and increasing the income.

So here's an example.

By reducing the water bill by twenty five thousand per year at a five percent cap rate, the property value increases five hundred thousand dollars.

Now, by increasing the covered parking, so you charge extra ten dollars per month on fifty covered parking slots. It's about five hundred a month or six thousand a year at a five percent cap rate. The property value increases a hundred and twenty thousand.

And then by increasing the rent, let's say, twenty five dollars per month, per unit on a hundred unit property, That's an additional thirty thousand a year at a five percent cap rate. Net that property value increases six hundred thousand dollars.

And then by upgrading the units, so charging additional one hundred and fifty dollars per month, by upgrading the fifty units and adding the washer and dryers, That's ninety thousand a year at a five percent cap rate. Now that property value increases one point eight million dollars.

So in total, the property value increased in, in value by three million twenty thousand dollars.

The next part is return of capital, so unique benefit of investing in multifamily, long term, is the ability to return one hundred percent of investment capital and still own the investment.

So one, after reducing expenses and increasing the income, typically within two to three years, the property will be refinanced or obtained a supplemental loan to return twenty five percent to seventy five percent of investor capital.

The process this process generally continues every two to three years. The goal is within four to six years investors have received back one saying their original investment capital. If the property has not been sold by the end, if the property is held long term, additional capital events through loan proceeds, distributions can occur to can continue to occur every two to three years.

So if the property is sold instead of a long term investor, it's sold.

Instead of holding on, then you'll receive a return of capital first before a profits distribution.

Passive income is another benefit.

So multifamily investing can produce ongoing passive income even after investors have received back one hundred percent of the original investment capital.

So, one, the income from multifamily is passive rental income.

Two, the passive income distributions generally begin within ninety to a hundred and eighty days after acquisition.

So let's say, hypothetically, we, purchased a property in January you will see the first distribution anywhere between March or with June of that year.

Now, year one three, the year one cash flow is lower than subsequent years when the property is first taken over. The reason for this is because we're going in and we're doing the renovations and adding value to the property. So a lot of the money is going towards the renovations.

Before the return has started increasing.

Now, by reducing the expenses and increasing the rents and adding additional income, cash flow, that can increase each year.

There are also tax advantages.

Now, I will tell you you you don't get these tax advantages if you're investing through a self directed IRA. But if you're investing through cash, then these are available to you. So This is says here, there are significant tax advantages available by investing in multi payment.

So some of the ways that this happens is we reduce income tax liability, so investors can substantially reduce their income tax via car segregation, which speeds up the rate at which investors can claim tax deductions.

Dinner is tax statement, so income is taxes, passive rental income.

Also, through depreciation deduction. So, you get annual depreciation, and then long term capital gains tax. So because the property is held over three hundred and sixty five days, you pay long term capital gains tax instead of short term.

Also, the loan proceeds distributions are not taxable at the time received, even after investors, have received back a hundred percent of their investment capital. So let's say you invest a hundred thousand, and we do a cash out refinance and you get that hundred thousand back and we give you that back. That's not taxable.

Also, you will receive a schedule k one.

Every year.

The next benefit is above market returns. So investing in multifamily can provide above market returns to investors do cash flow, capital events, capital gains, and tax advantages.

So, due cash flow in general, multifamily can produce cash flow between four to ten percent per year of passive income.

And then when the property is refinanced or supplemental well is used, part of all of the capital is returned, but you still have ownership of the property.

So then by simply reducing expenses and increasing income, even slightly, values can increase significantly to realize strong capital gain on sale.

And then between cash flow and gain on sale investors on average can consistently achieve double digit returns.

And it also, as a result, multifamily is one of the most predictable ways for investors to earn above market returns.

Multi family also provides a hedge against inflation.

So it's considered a hedge against inflation since values increase as expenses on the property are reduced and rental rates are increased.

So for example, in single family, investing has natural appreciation and appreciation based on the buying and selling activity in a particular sub market.

So I used to be in single family for a while, and I remember always dealing with comps. That's basically what this is talking about is, let's say, the person across the street, they still have to ask for two fifty, but you wanna sell yours for three hundred because you've added all this value in it Well, now you gotta sell it for less because somebody else, men got in their house for clothes on the block or something. And That's just yeah.

So in multifamily, you have forced appreciation, regardless of the sub market.

So the value on a multifamily property is dictated by the net operating income.

And then simply reducing expenses and increase in income even slightly, values can increase significantly.

Also, it's predictable and stable. As a result, multifamily is one of the most predictable and stable investments available to investors to hedge against inflation.

Also, in the last part, investing in multi family costs to be done inside a retirement plan through a self directed IRA or other qualified plan. Just like Renika had talked about. So you can use your traditional IRA, your RAV, your traditional four zero one k. All these can be rolled over into a self directed IRA.

And then this is the last slide. So for more information, you can go to invest in apartments now dot com.

Thank you so much Joseph. I do want to, kind of circle back in au where I'm going to transfer to the the the benefit of the tax benefits of investing with your retirement account is already tax sheltered. So, obviously, any income that's generated falls back in retirement account tax for your tax deferred.

Typically when our clients use, you know, use your account to invest in multi value authentication project, It it may or may not be subject to to you bit.

So UniFI to ask supplies in terms of IRA's who doesn't apply to solo four one k's. Obviously, it depends on how that, that investment provider or that syndicator is reporting or sending back. Clients do get k ones as well for their their for, for their self directed account.

But, of course, any investment that you make inside of their retirement account the returns, those are or or attached sheltered. Now let me go ahead and open a special question.

If you can, just bear with me one moment. Let me pull up the question box.

So, Justin, the first question is, what is your view or landscape of, the general, real estate market currently?

So the conversations I've been having with, my mentors and partners on this is that a lot of the the investors who got into syndication, I would say, like, in the past couple of years, they're in a position where they might have to sell these properties anywhere between mid to late part of this year. And so if you are an experienced, syndicator, then there's a opportunity for you to pick these properties up at a discount.

And then also if you're new, and you're just getting started, and you're going out there to a priorities building. Then there's also a great time for you as well to, take advantage of the opportunities.

Okay. I know question is how long do you typically hold your apartments? Is it five years, seven years, ten years?

So on average, we typically hold them anywhere between three to six years.

Three to six years? Okay.

Yes. One one question that came in. What is the minimum investment?

The minimum investment is one hundred thousand.

Okay. So are you dealing specifically with accredited or non accredited investors?

No. So we deal with accredited and non accredited investors.

Okay.

Another question that came in is, do you invest nationwide and how do you understand, And how well do you understand each specific city that you invest in?

So we invest in landlord friendly states such as Texas Florida, Georgia, Alabama, all of the Southeast markets, and we recently acquired a property in Charleston, South Carolina.

Which is a hundred and sixty units. That's an example.

Okay.

So a question came in says, when we fund the IRA, do the funds stay in house or I'll have the different institutions such as bank that host the funds. So if you open up an account with Adanso, and let's just say you have an ira at, you know, Fidelity or child Schwab, you open up an account with us, you would then move higher proportion, whatever amount that you decide you want to invest.

Move over to your Advance account. Once it comes over to us, you'll work with your account manager who would have worked within work with that syndicator to fill out any subscription agreement. And then, of course, once you give your consent, advanceable incident money over to that, syndicator on behalf of your IRA, and then moving forward, whatever the terms that that's agreed upon between USC investor and the syndicator, let's just say, they're sending money back monthly or quarterly or at the end of the the three year or five year assist your term, they would then send it back to advance to be deposited into your account. So I hope that answers your question. Just bear with me.

So question is, how do you and your team plan to hedge the current higher interest rates, environment to ensure investors make a profit return, a positive return?

So something we do to to hedge against that just Let's say, hypothetically, a property did underperform.

Something that we do to hedge against and protect our investors is that we offer a ten percent downside performance protection hurt on every property that we acquire so that if a property was to underperform due to market conditions or something, then our investors will get the minimum of ten percent annual return on investment before we take a profit.

Okay.

Next question is, do you invest in your own deals alongside a passive investors?

Yes, we do. In fact, to acquire the Charleston, South Carolina property, we raised about six million in a month, and then took another six million of our own cash to put into the property, to acquire that property.

Okay.

Next question is how many property stores do you have under management?

So at this current moment, a hundred and sixty units, that's about thirty million in assets under management.

And then also working on a property in Wichita Falls, and then also, more property as well. We're looking at right now.

Okay. Next question is, are there any other initial costs before the minimum investment?

No. There's no other initial cost before the minimum investment.

Okay.

Just bear with me.

Next question is, how is the deal structured in terms of profit sharing with LP and GP?

So it depends on the property. It could be anywhere between the seventy thirty or eighty twenty.

Yep, in some cases, seventy five twenty five. Anywhere between there, it all depends on the property.

Okay.

I think you answered the a moment. That's no requirement. Just bear with me and go through.

Question is how frequently are distributions made?

We do them quarterly, and we're in talks of possibly doing the monthly, but as of now, they're quarterly.

Okay. And, to pay you back on that, question is how often, how will you, how often you communicate or provide updates? Is it also quarterly?

No. We do that monthly. In fact, you'll get an entire overview of everything that's going on with the property to most of my new detail so you can know.

Okay. Question is, can I get a copy of this presentation? Yeah. So, this webinar will be uploaded onto our YouTube YouTube channel within twenty four to forty eight hours. You'll also get an automated, email from Advance as well. And if you'd like a copy of the presentation, feel free to let us know, and we'll certainly send you, send you a copy of it. Next question is, does your company manage your property directly or do a third party property manager that you work with?

We use third party property managers.

Okay. But we just oversee the we oversee the third party party property managers as the general partners on each property.

Okay.

Next question is, do you invest in storage units, nursing homes, condos, No. We do not. Not at this moment, but that is something that could possibly come in the future. Also emergency rooms, freestanding emergency rooms. It's another thing that can come in the future.

Okay.

Question is, What type of insurance do you carry or can you talk about the the type of insurance? Or what is it in place to protect investors?

So as far as the type of insurance, that's something that I would have to get to you, here I mean, I guess you have to reach out to me through my website, go there instead of trying to reach out to me and I can get that over to you. But I can't just talk about that over over the webinar.

I understood.

Let me just go through and see other questions.

So, what is your historical performance on track record? Have you dealt with a down, downturn in the market?

What is that question again? It says, what is your historical performance on track record? Have you dealt with a down down market?

Oh, so yes. My partners, they've been in business for twenty plus years. This elite syndicators on each deal. For the pre existing properties, and they average a annual return on investment for exited projects of twenty nine percent.

So they definitely went through a down market.

Okay. Question is how long go ahead. I'm sorry.

Oh, no. I was just saying they definitely been through a down market if they've been in this twenty plus years. Abigen, those kind of returns.

Okay. And, thanks to follow-up questions about is, how how long have you been in business?

So, this particular fund for over a year now, as far as the syndicators, that will oversee these properties as well that I invest with twenty plus years.

Okay.

Next question is what is the typical debt to equity ratio, of your properties?

Again, that depends on the property. So if I remember correctly, the one in Charleston, South Carolina, was sixty five thirty.

I will have to double check. It's definitely on my website. Five to double check.

I have a case study so you can look at it through the website as well.

Okay. I'm just gonna ask you a quick just bear with me. I think you answered how to deal with structured, the minimum investment.

I think you may have answered this because I'll I'll ask to clarify, what miscellaneous fees do you charge for?

I do not charge my investors any miscellaneous fees. Because I invest in each apartment building as an equity partner and come on as a general partner alongside the lead sponsors.

So I get paid from whatever fees that they already have. Okay.

So question is are these investments subject to UDFI unrelated debt financing can task you because of debt financing. So if you're using retirement accounts, IRS, It's possible that your IRS could be subject to UVFI task. But, again, that's more so depending on, the syndicator and how they're they're financing, you know, if they're using debt, debts to finance those those those investments, those properties.

Final question is, Can you provide your contact information once more?

Yes. So to reach out to me, here's my website at w w w dot investinapartments now dot com.

And then also to reach out you can go to you can message me. Call me at four six nine five four zero five zero three one.

Carl will text that number.

Okay.

And I think, let me just double check here. There any more questions? I think that her will all cover all of the questions. Joseph, thank you so much for taking the time to, to come in and and I'll share with the audience. Thank you all for for your questions. Again, this this webinar will be uploaded to our YouTube channel shortly.

If you wanna know more about self direction or you need clarification on anything, feel free to reach out to me directly. Let me just change my to show my screen where you can have my my contact information. Again, you can call me. You can email me or you can visit advanced ira dot com. It's a great resource, a great wealth of knowledge. Any parting words before we disconnect Joseph?

I would just say thank you for having me on, and definitely looking forward to it coming on again if y'all have me.

Thank you. Thanks so very much. Yes. I I absolutely will talk about, some of our other networking opportunities that we, that we have available I do have one last question or came in.

Okay.

So question is, how many customers of Atlanta has invested with Apex? Just to clarify again, at Advance, we don't tell our clients, what to invest in or work to invest.

So it's more so US to client have to decide, hey, I wanna invest with eight x y one to invest, you know, x y z. We're just acting as that neutral body, that custodian, to help you, dot those i's across those t's, to make sure it's done correctly, with within according to our recordings to the IRS rules.

And if there if there are no more questions, we'll go ahead and disconnect. But again, if you wanna know more, feel free to reach out to me.

Thank you, Joseph.

Alright. Thank you. Thank you everyone. Have a great rest of your day

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