New York (HedgeCo.net) – Jaime Raskulinecz, a longtime real estate investor, founded Entrust Northeast, LLC., as a means of combining her avid interest in buying rental properties while also building a productive business opportunity.
“I founded Entrust Northeast after struggling to find a way to make real estate investments inside my own retirement accounts,” says Raskulinecz.
Armed with the knowledge that the Internal Revenue Service allows such transactions—not only for real estate, but for the purchases of businesses and a host of traditional and alternative investments—the veteran New Jersey businesswoman rolled up her sleeves and, in 2004, discovered the solution she was looking for—self-directed IRAs.
She founded Entrust Northeast, LLC, in Verona, NJ to facilitate the creation and custody of self-directed IRAs (SDIRAs) for other investors. Her business experienced over 100% growth in 2006 and over 75% growth in 2007. Today she works with real estate investors, realtors, financial planners, investment advisors, CPAs, business people and individual investors throughout New Jersey, New York and Connecticut to help them utilize assets in their 401(k), SEP plans and traditional and Roth IRAs to pursue business and investment goals. Self-directed IRA holders can buy not only real estate but notes, private placements, accounts receivables, limited partnerships, gold, stocks, bonds, mutual funds, hedge funds and certificates of deposit.
“So many investors today have the bulk of their assets locked away in retirement plans, at the very moment when buying real estate and other non-traditional investments are advantageous. The time is also right for Baby Boomers to start new careers and businesses,” says Raskulinecz, who was recently recognized as one of the 30 most successful women business owners by The New Jersey Association of Woman Business Owners. The tribute recognized Raskulinecz for her vision and her determination to empower investors fully.
One thing is certain: Raskulinecz’s timing couldn’t be better. Tiburon Strategic Advisors, Tiburon, CA, finds that more than 78 million Baby Boomers have some $17 trillion in assets at their disposal—a significant percentage of which are locked away in retirement plans. The only way to get at these assets, without paying significant early withdrawal penalties and taxes? You guessed it. Self-directed IRAs, which Raskulinecz’s firm helps investors create.
Today Entrust Northeast has become a leading provider of comprehensive account administration and transaction support services for self-directed retirement and savings accounts. The firm’s services enable investors to diversify their investment portfolios by harnessing their IRA assets to purchase a wide array of nontraditional investments. In addition to account administration and transaction support services, the firm is committed to empowering clients
with the knowledge needed to proactively shape their financial future – all within the strict codes set out by the IRS to preserve the tax deferral afforded to qualified retirement assets. “The job of a self-directed IRA administrator, like us, is to handle all the paperwork required by investors and the IRS, leaving investors to the business of doing what they do best—planning and investing for their financial well-being,” Raskulinecz says.
Recently, Raskulinecz has walked clients of her firm through the creation of self-directed IRAs that have allowed them to invest in other people’s businesses, including an insurance business. “Our services allow people to create the next chapter in their already successful lives and careers, utilizing their own assets,” she says.
On the real estate front, Raskulinecz says many savvy real estate investors are using self-directed IRAs to buy properties they believe may be out of reach soon—such as beachfront homes and if a Roth is used the rules are followed closely, the property can be taken out as a tax-free distribution after age 59 ? and used in retirement. “You can buy the beach house you are in love with, as long as you don’t use it while it is held by your IRA,” Raskulinecz says. “You can rent it out to pay for the investment.”
One of her NJ clients, Dawn Fairlie, used her self-directed IRA funds to invest a pre-construction condo on Panama Bay in Panama. Ms. Fairlie has invested outside of her retirement assets, but says that bulk of her funds are held in retirement accounts. The real estate investments give her diversification that the stock and bond markets don’t afford her, while the Panama condo may also serve as a retirement home. Fairlie is hot on the trail of other opportunities in Panama – most recently waterfront land that would be purchased using her spouse’s self-directed IRA.
How do the IRS rules affect your investment when you sell properties held within your self-directed IRA? When you sell a property that is held within your self-directed IRA, all proceeds and gain go back into the plan either tax-deferred or tax-free depending on the type of account. Then when you are eligible for distributions, you may take it in partial distributions over several years, you may take the entire property at once as a distribution, or you may petition the IRS for a waiver to allow you to purchase the property from your plan (not usually allowed, but it may be granted if you can show that the IRA would benefit the same as if it were sold to a non-disqualified third party).
“Transactions are not as complicated as they seem if you deal with an administrator that guides you through the process,” says Raskulinecz, who walks investors through all types of purchases and transactions although does not offer investment, tax or legal advice to clients.
Some real estate investors are also using self-directed IRAs created through Entrust Northeast to invest in other real estate-related assets such as mortgages within their retirement plans. The firm has also seen increased interest from investors to use their retirement plans to invest in domestic and off-shore hedge funds as well as private placements, both of which are not typically allowed by IRAs held with traditional custodians. But real estate itself continues to be the most common investment Raskulinecz’s clients buy, she says.
With regards to the U.S. real estate front, some markets are in decline or even flat. Many properties have been sitting on the market for more than a year or are in foreclosure. “Some people think that the instability in the U.S. market means real estate investing should be put on hold, but we have many clients who think otherwise,” Raskulinecz says. “They see price declines and even foreclosures as buying opportunities.”
Another opportunity that Raskulinecz is telling her clients about? The opportunity investors of all incomes will have to convert their funds from traditional IRAs to a Roth IRA in 2010. The added benefit? Investors who take advantage of the option and make the conversion in 2010 will get two years instead of one to pay the income tax bill on the conversion.
Even the wealthiest investors can take advantage of the conversion in 2010, when the income limits are lifted. “Taking full advantage of this may take advanced planning starting now, if clients want to be able to set aside tax money, which is why we’re spreading the word,” says Raskulinecz. Why is converting to Roth so attractive? Investors, especially those who are a decade or more away from retirement, will not only create tax-free accumulation and distributions. They will also be able to benefit from decades of tax-free investing—provided they enjoy a long life. Why? With Roths, minimum distribution rules do not kick in when the participant turns age 70, as they do with traditional IRAs and qualified plans, so there are no required minimum distributions for Roths until after the death of the participant.
Jaime J. Raskulinecz, CPM is the CEO of Entrust Northeast, LLC, a NJ licensed Real Estate Broker and CEO and principal of Rainbow Property Management, LLC, AMO. Entrust Northeast is a locally owned and operated office that is part of The Entrust Group, the largest and oldest administrator of self-directed retirement plans in the country. Entrust Northeast has become one of the first and only area companies to enable investors to harness their IRA assets to purchase a wide array of nontraditional investments such as real estate, notes, private placements, accounts receivables, limited partnerships and gold. Ms. Raskulinecz has been a successful real estate investor herself for more than 20 years. Jaime can be contacted at 973-857-8058 or Info@EntrustNorthEast.com www.EntrustNortheast.com. To read more comprehesive information,Click Here.
