An Interview w. Kaaren Hall of UDirect IRA

By Christina Suter on Jun 30, 2018 at 06:00 AM in Real Estate Issues
An Interview w. Kaaren Hall of UDirect IRA

This month, the speaker for my FIBI Pasadena meeting is Kaaren Hall of uDirect IRA. I had the pleasure of interviewing Kaaren for my radio show, and I wanted to share some of her wisdom here with my blog readers.

Kaaren is the founder of OCREIA (Orange County Real Estate Investors Association) and despite being in the midst of a recession and mortgage market collapse, Kaaren founded and made a resounding success of uDirect IRA Services. The single mom discovered a strategic way to put her 20+ years in mortgage banking, real estate, and property management to use. The solution was an untapped market for both her skills and for investors – self-directed IRAs. Because self-directed IRAs can have a dramatic impact on retirees’ quality of life, Hall brings her full passion to educating Americans about the little-known investment vehicle. She has educated tens-of-thousands of investors and professionals on how to build wealth by taking control of self-directed IRAs.

Kaaren was a radio announcer for 17 years and transitioned into real estate by managing buildings in Seattle and learned a lot about property management. She was a realtor for a year and transitioned into mortgage loan servicing and then she got into mortgage loan origination. In 2007 she transitioned into self-directed IRAs and two years later she opened uDirect IRA Services. 

At my meeting, Kaaren will be speaking about how your real estate retirement comes together. She says for 40+ years the best-kept secret has been 

In 1975 President Ford's ERISA laws went into effect. ERISA creates the IRA and a self-directed IRA and a typical IRA are the same creature, but the assets you put in are different. Self-directed IRAs contain alternative assets like real estate, notes, precious metals, and private stock, things that are non-correlated with the stock market, whereas a typical IRA contains stocks, bonds, and mutual funds. The power comes from the fact that in America we have 27 trillion dollars in retirement and if you have an IRA or 401k from a previous employer then they can invest. 

The stock market and real estate are cyclical investments, and if you're stuck with only being able to use stocks with that money, then you're literally stuck with a cash on cash return and when the returns go down, you're stuck in a particular channel and you're stuck with that risk. When you go to an alternative platform like Kaaren's talking about, your returns go up to 9%-20% even when real estate is countercyclical. 

Kaaren says the kinds of returns you're going to get in a self-directed IRA are all about your research and your knowledge and it's about the power to invest in asset classes you understand. She says if you have the stock and it goes down to zero you have nothing, although real estate never goes to zero.

Kaaren says the three-step process is:

1. Open an account- A form, a $50 fee, a copy of your driver's license, and some other things
2. Fund it- get money into the account by contributing to your IRA depending on your age and income. You can do an IRA to IRA transfer or a rollover.
3. Invest- What is your asset? What are you going to invest in?

At uDirect Kaaren and her team help you play the game of keep-away and steer you from prohibited transactions because then your money becomes taxable. Providing you with the distinct list of prohibited transactions is what uDirect is there for. Kaaren is not a lawyer but she will help you identify red flags and suggest you speak with someone regarding the transaction. 

Some of the prohibited transactions are: 
1. Disallowed people- lineal ascendants and descendants, which include your parents and grandparents and their spouses, you and your spouse, and your children and grandchildren and their spouses.

2. You don't get personal benefit from your IRA today, it's about investing for later, for retirement. You don't buy, sell, or exchange assets between your IRA and those people.

3. Offering services to the plan- If I, Christina, wants to buy a house and make it beautiful, I cannot do any of the work, it's called an overcontribution. I'd have to keep things at arm's length and hire third-party vendors to do the work. 

IRC 4975 is where you can read about the rules. The cool thing about self-directed IRAs is you get to invest tax-free in a RothIRA or tax-deferred in a different kind of account. The tax-protected status remains as long as you follow the rules. uDirect is available to help you and keep you abreast of legal and prohibited transactions. Kaaren has a free report on asset classes on you can download and read. The ERISA code says you can invest in anything except life insurance, contracts, and collectibles. 

Kaaren says as far as asset classes you can hold, your IRA can invest in performing and not-performing debt, your IRA can be the bank and make loans, equity, and private stock. On you can click on the 'get started' tab to begin your process. You can call 1.866.538.3539 or 1.866.447.6598 and have your IRA questions answered by someone on the uDirect team. For any of you looking to invest in the state of Florida, you can email Kaaren at [email protected] and she'll inform you of the new law that says in Florida if your IRA buys a house, the IRA doesn't own the house, the custodian owns the house. 

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