In the Issue:

• Self-Directed IRA Success Story
• Why Do People Choose Self-Directed IRAs - Recent Survey Results
• Good Real Estate Buys in Growing West and Northeast Regions
• Land Banking

Did you know?

You can invest in tax liens with a self-directed IRA. By directing your IRA investments into tax liens, your profits are tax-deferred back into your retirement account. The purchase of tax liens is considered by many to be safer than most investments. These transactions are rapid with the potential for excellent returns, and tax liens are ideal for those with limited funds. With Auriga’s checkbook flexibility, you can buy tax liens the moment they become available.

Ask the Expert

Have a self-directed IRA question you need answer? Ask our expert! Submit your question(s) to and it will be answered within the next two business days.

Q: What are some of the most popular tax-deferred/tax-free investments within a self-directed IRA?

A: Guidant’s self-directed IRA clients (based on reports and surveys) are most interested in investing in:

• Rental properties
• Holding raw land for appreciation
• Tax liens
• Real estate-backed loans

Affiliate Spotlight

BetterYields.net is a North Carolina Limited Liability Company based in Boone, NC. BetterYields.net specializes in land developing, log home specs, modulars, high-end housing, and affordable housing projects. The company offers investors a sound alternative to the volatile stock market. In addition, BetterYields.net cultivates buyers for the appropriate investments it has identified. The founders of BetterYeilds.net are real estate investors with over 80 years combined experience.

For more information, visit BetterYields.net, or contact Pepper Rodgers, company president, directly by email, or phone, 828-773-7737.

Investor Spotlight

Investor: Sheila Sicilia

Investment: Beach Rental House

Motivation:
Like a lot of people, I was looking for better investments outside the stock market. When I found out about self-directed IRAs, I realized that this was a way to better utilize my retirement monies, and I could actively manage my money as well. As a teacher, I have summers off, so a beach rental property seemed like a perfect fit for me. I can manage the property myself and avoid having to pay someone else to maintain it.

I just bought my beach house that I’ll be renting out next summer. I am really excited because there is a lot of development around the area, so hopefully that will increase my returns even more. This definitely is a better investment than the stock market!

Why are more and more people choosing self-directed IRA’s?

Guidant conducted a recent survey of almost 1000 investors and asked them what they felt were the most appealing benefits of a self-directed IRA. Having the ”ability to control investments” was the number one reason investors choose a self-directed IRA, with 42% ranking this as their top reason. The second most appealing benefit (with 28%) was ”more growth potential.” This was followed by the third reason, ”true diversification.”

Self-Directed IRA Investors Find Good Real Estate Buys in Growing West and Northeast Regions

According to the National Association of Realtors®, several housing markets still showed double-digit increases in sales prices from last year despite the country’s overall real estate slump. Topping the list were Salt Lake City, Utah (21.9 percent increase), Binghamton, N.Y. (19.8), Salem, Ore. (16.7), and Farmington, N.M. (14.0). Additionally, real estate sales continued to grow in specific U.S. regions, with Washington state the winning region. A CNN Money article highlighting economic research by FiServ and Moody’s economy.com, reports that 9 of the top-15 most appreciable cities in the nation are nestled up in the “Evergreen State.” All are projected to have experienced a 10%-17% appreciation through 2007.

According to David Nilssen, Guidant’s president and CEO, clients with self-directed IRAs are still finding good investment opportunities in these and other pockets of positive growth. “By looking to those regions projected to enjoy the most growth, real estate buyers have the opportunity to safeguard their investments even during today’s challenging market,” he says.

While the national average is down, specific regions in the United States are continuing to grow, as they have during the past several years. This is particularly good news for those who are eager to avoid the volatility of the stock market by investing in real estate. Historically, despite market fluctuations, real estate can still provide a good rate of return if investors stay abreast of real estate projections.

Nilssen suggests that, in light of the country’s current market conditions, investors should “stay nimble” to allow for real estate fluctuations. One way that investors are taking advantage of timely opportunities is through self-directed IRAs with checkbook control. Specially structured accounts, like Guidant’s Auriga plan, allow retirement account holders to personally direct their IRA investments into areas they feel would be most profitable -- whether into growing geographic locations for property investment or a declining market for foreclosure investments. And with Auriga’s flexible checkbook control, real estate buyers and other investors can make their purchases/investments on the spot.

“Using retirement funds to invest in real estate is a growing trend,” says Nilssen. “Through a combination of checkbook control and a keen eye on those appreciating regions, investors can grow their retirement accounts while avoiding the twists and turns of today’s stock market. Having personal control of one’s hard-earned retirement funds can provide a much-needed sense of security.”

Banking on Land

“Land banking” is the process of buying and holding land for future sale or development. Parcels of land desirable for land banking are those that lie directly in the path of growth of rapidly developing areas.

Historically, countless fortunes have been made in land banking by individuals who understood the concept of buying and holding pre-developed land destined to increase in value because it lies in the path of growth. To reap the rewards of this investment, they do little more than select the land, then wait. Imagine buying land on the outskirts of London, New York, or Tokyo 50 years ago and what it would be worth today!

Land banking usually is reserved for the wealthy and for large corporations, as it takes considerable wealth to be able to purchase large tracks of raw land. However, there are models that open up land banking to everyone from a real estate investor who is just beginning to a sophisticated investor with many years of experience.

In this model, raw-land investors basically buy a large piece of undeveloped land. When development begins growing close to the property, usually within four to six years from the time it was purchased, the original investors syndicate the land out in small chunks (“undivided interest”). Once the project is “sold out,” raw-land investors will get the permits and zoning in place, as well as the infrastructure. This usually takes about two years. Once secured, the ready-to-develop land will typically be sold to a developer. At this point, investors are paid back. By getting the zoning, permits, and infrastructure (water, power, sewage, etc.) on the land, the initial raw-land investors are adding value to the land. In fact, this is usually where a particularly large increase in value is seen.

So when is the best time to invest? Invest while prices are still affordable, where there's room for growth, and where the potential for profit is greatest.

For more information on land banking or about investing in Costa Rica,
please call 1-604-377-5792 or email.