Quest Trust Company Fees Explained- A QTC Schedule Deep Dive

company fees explained
Estimated reading time: 7 minutes

All Fees Explained

At Quest Trust Company our World Famous Customer Service begins and ends with our clients. So, when it comes to our fee structure we want to keep it simple and transparent. Also, every dollar you spend on a Quest Trust fee goes back into making sure your self-directed IRA experience with us is the best it can be.

While other IRA custodians may boast cheaper fees, you may find that their services do not meet all of your needs. You will find that our fees remain average with industry standards and that the customer service and education we provide will easily pay for itself.  Simply put, you’ll receive a much higher value for a reasonable fee!

What Types of Fees Can I Expect to See?

With a Self-Directed IRA at Quest, you will never experience a hidden charge. Our outlined Fee Schedule allows you to accurately plan for any fees you would expect to see during an investment, ensuring you never have to be shocked by an unplanned charge. Additionally, with 3 different Annual Fee Plans, you have the option to choose the best structure that works for you rather than being locked into an all-inclusive plan that may not fit your needs.

Initial Fees

Getting started is easy and won’t cost you an arm and a leg. For just $100, we can establish and generate an account number for a new self-directed IRA. Then, when you’re ready to fund your first transaction, there’s only a few charges you’ll incur. Any other fee you’d see at Quest would surround account maintenance, such as end of year reporting or additional investment processing, or yearly investment fee plans.

INITIAL FEE SCHEDULE

With Option 1, or the “Fee Based on Number of Assets” option, you will pay a flat fee of $350 per asset per year. At the time you purchase your investment, this fee will be assessed and you can expect to see it a year later on the same date. If you select Option 2, the “Fee Based on Total Account Value” option, your fees will be quarterly and will depend on the total account value, meaning the value of the assets and the cash. You can see below that this option is tiered. Note – if you have cash in the account but do not have any assets, this chart will not apply and you will only be charged the $30 quarterly maintenance fee.

The last option is Option 3, The Gold Family Concierge Plan. This is our all-inclusive plan at $3,000 a year. With The Gold Family option, you can open multiple accounts for you and your immediate family without having to pay the $100 account opening fee. All other fees are included with this fee plan, except for a few special fees like asset research and overnight mail costs. On top of the fee benefits, there are many others that you can find in our FAQ section below.

Transaction Fees Explained

When you do a transaction at Quest, our Quest representatives will work diligently with third parties to ensure your investments is funded smoothly. At the time we conduct a new transaction, there may be a few fees you could incur. Purchasing, selling, exchanging, or re-registering an asset will have a $125 transaction fee and you can either choose to send the funds for different costs, as seen below. The “Other Fees” section contains fees you will see at Quest if you select to use an optional service, require paper versions of certain online documents, or incur a late fee. These do not always apply. Other fees such as the Non-Recourse Loan fee, Roth Conversion fees, and Asset Research fee may not apply to your situation, so these fees are only assessed if applicable. Learn more about when this fee is charged in the FAQs!

transaction fees

Self-directing shouldn’t come with aggressive fees every way you turn, which is why we believe in only charging a few main fees for the more difficult services we provide. As you shop around, you’ll see our fees are remain average with other custodians in the industry. We are confident that our service will show any potential or current client the value of Quest Trust Company. If you have questions about our services or fees, give us a call at 281.492.3434. To learn more about how to get started investing with a self-directed IRA, schedule a 1-on-1 consultation with an IRA Specialist by clicking HERE.

Fee FAQs

What if I have chosen to pay my fees by deducting from my account, but there is no cash available to deduct the fee from?

  • If we cannot deduct the fee from your account, we will default to the credit card we have on file.

What if I am set to deduct fees via a credit or debit card, but the card is declined?

  • Quest will reach out to the client in order to obtain correct card information. If we are unable to reach the client after a certain time, the account could be closed due to unpaid fees.

Can I change my fee option?

  • Yes! You can always change your fee option based on what fits your wealth building strategy at the time!

Is there a cost to change my fee option?

  • No, there is no cost to change your fee selection.

How do I change my fee option?

  • You can change your fee option by submitted an updated Fee Schedule document in the Client Portal!

How often can I change my fee option for my account?

  • There is no limit for the number of times you can change this option!

When are the quarterly fees charges?

  • The quarterly fees are assessed at the end of March, June, September, and December.

How can I pay my Quest fees?

  • There are a few ways you can elect to pay your fees. You can either pay your fees via credit or debit card or you can choose to deduct the fees from your Quest account.

What is the value of Option 3 – The Gold Family Plan?

– Gold Member Concierges provides additional benefits you can’t get with other options. You will have a designated rep with the Gold Member Concierge service to ensure account business is handled properly and in a timely manner. Additionally, you’ll get special reminders to make your account management easy, such as maturity date and other notices, as well as access to private events exclusively for Gold Family Members.

Does Quest have account minimums?

  • Quest does not have any account minimums. You can open a new account without putting anything into you; we simply ask that we have a credit card on file at the time we establish your new account.

Will I have to pay every fee listed under “Transaction Fees”?

  • No! Certain fees will only apply to specific investments. The Non-Recourse fee will only apply to debt-leveraged loans. The Roth Conversion Asset fee will only apply if you are converting an asset from a Traditional account to a Roth account. The Asset Research Fee will only apply if you elect to have Quest do the annual research, but you have the option to do this yourself with no charge. If you require a specialty service, you will see the hourly Special Services fee.

Does Quest charge any fees for incoming funds?

  • Quest does not charge when funds are moving into your Quest account. There could be a fee for funds that are outgoing.

When would I need to use a cashier’s checks?

  • Certain investments like auction properties will require cashier’s checks. If needed, this is when the Cashier Check fee will be charged.

If my account is open with zero investments, does Quest charge a fee. If so, how often and how much?

  • If your account is open but you do not have any investments, there will be a quarterly maintenance charge of $30.

How can I tell which fee option is right for me?

  • Certain investments will work better for different plans! It’s important to look at things like the cost of the investment, the duration, and how many investments you plan to do. If you are unsure which fee plan is best for you, you can call an IRA Specialist and we can help!

Do I earn interest if I have idle cash sitting in my Quest account?

  • You do not earn interest for the idle cash sitting in your account.

 

If you ever have questions about our fees or the Quest Trust Company value, you can speak to an IRA Specialist or a Billing Specialist. Give us a call at 281-492-3434 or schedule a consultation.

 

 

How Private Equity Deals are Allowing Investors to Regain their Freedom by Being Passive

Saving Money
Estimated reading time: 9 minutes

Guest Article with NHK Capital Partners

School has started, the holidays are coming up, and it seems like daily life is not slowing down anytime soon! With such busy schedules, it’s hard for investors – especially those that may still have their W2 job – to spend time actively hunting for investments. Investing into private equity firms give investors everywhere the ability to take back their time for other priorities in their life without having to sacrifice their investment portfolio. Building wealth doesn’t have to be exhausting, and Neal Lee of NHK Capital Partners joins me today to give a real-life example of how private equity funds work and how they can allow investors to be passive.

Sarah: Thanks for joining me today! Let’s start by having you tell me about yourself.

Neal: Thank you for having me. I’m Neal Lee and I’m one of the founding members of NHK Capital Partners. I run the day-to-day of NHK. I come from a real estate investment/development background, and I started my career with a larger outlet. They had a construction arm, a development arm, and an investment arm. That was a very good introduction to the commercial real estate space for me, because I was able to experience the asset management side of it, the portfolio management, the investment side, as well as the development. As you know, these are all very pertinent aspects of commercial real estate developments and investments. In 2013 after I got my masters from MIT, I got to learn about a federal investment program that was gaining traction called EB-5, from a good friend I met while at MIT.  I joined NHK’s sister company CMB. CMB is a leading player in the EB-5 space.

Sarah: Now, what exactly is EB-5?

Neal: EB-5 is a federal program that grants permanent residency to foreign investors who contribute to the US economy by creating new, permanent American jobs through their investments.

Sarah: Interesting, thank you.

Neal: Of course. So, at CMB I helped underwrite over $2 billion in new deals in commercial real estate, and overall, the company has over $3 billion in AUM and represent close to 6000 EB-5 investors. After a while – after these investments came to maturity and now that our EB five investors were getting their capital back – the question ‘what’s our next step’ naturally came up about.

Sarah: Always. Investors and deal sponsors alike always have to be thinking five steps ahead.

Neal: Exactly. So, myself and my principles came together and created NHK back in 2018. NHK Capital Partners was our response to the demand from our existing investors.

Sarah: What was your business model? How did you structure NHK Capital Partners?

Neal: We structured it as more of a traditional private equity platform. We aimed to bring our institutional quality and investment opportunities in the commercial real estate space to our individual investors.

Sarah: I love that. I know that a lot of people that are using self-directed IRAs are interested in commercial real estate investing. What if somebody is not familiar with this, though? How does NHK Capital Partners help someone understand commercial real estate investing?

Neal: We believe in the right education. I think you first need to understand how the investment works. A common approach to commercial real estate investing for individual investors would probably be through buying shares in a REIT, right? REITs are publicly traded, so they’re easy to buy. Whether it’s multi-family oriented or hospitality oriented, they’re easy to buy and sell. However, you don’t get to control your investment. A typical way of getting exposure to the commercial real estate space would be to partner up with additional or other investors to create a larger fund.

Sarah: How hard is it to do that?

Neal: It requires you to be more of an active investor because you would have to now spend your time learning how to administer and operate that investment. That’s where NHK provides education about private offerings. These are what we offer at NHK and they can help SDIRA account holders to diversify their investment into commercial real estate without one having to be an active participant. For example, our limited partners take advantage of being a passive investor in commercial real estate developments and I would say most private offerings would follow this trend.

Sarah: That’s great. What is a common way these are structured?

Neal: In the case of NHK, our offerings are structured as a partnership. I would say this is often seen. So, our investors are admitted as limited partners on a passive platform. The general partner, which in this case would be us, would act as the day-to-day manager of that investment.

Sarah: And do most investors prefer that the general partner has most of the day-to-day management responsibilities?

Neal: I think a very big component as to why the private offering model works well is because it is an alternative way of getting exposure into commercial real estate while being able to diversify. So, I would say so. We are seeing crowdfunding grow right now. I think the differentiator between a crowdfunding platform and a private equity company (like NHK) is that the fund has skin in the game. This is important because we’re not just a promoter; we’re actually investing alongside our investors as fellow limited partners. That creates this alignment of interest between that general partner and the investor.

Sarah: One thing that you mentioned that I wanted to go back and touch on a bit more is the passive aspect of it. That’s huge for Self-Directed IRA investors. Besides the example you just gave, what are other reasons why would someone want to be passive and why would a private equity investment be a good investment for this type of investor?

Neal: Commercial real estate space is very complex and typically requires millions if not tens of millions of dollars of investments and they’re highly leveraged. There are all sorts of things specific to that investment that can and probably will come up. This is when you really do need an expert and a team to manage that investment. These private offerings, like those on our NHK platform, provide that ability to partner up with an expert group to help with originating the investment, finding the investment, but also managing it all the way to a successful outcome. That’s probably the largest reason that I can think of why someone would want to be a passive investment partner. A partnership or limited partnership is more conducive for a SDIRA holder.

Sarah: Good points, and I would agree. They can also be great because, as we know, in order to reap those self-directed IRA benefits, the investors need to keep the funds in their IRAs for a certain amount of time anyways, so they may as well let their money work for them and let it grow while they’re still working!

Neal: Yeah, absolutely.

Sarah: What are some questions or due diligence considerations that potential investors should be asking themselves before getting involved in a private equity deal?

Neal: Great question. I think the best advice is to stick to common sense. Underneath all the trends, fancy models, and numbers with 7, 8, 9, and 10 zeros is underlying common sense, right? Taking an example of a single-family residence, one thing that we do as investors at NHK, we pull independent third-party data and reports from market research firms and appraisal firms, we learn how to be competitive in the marketplace, we analyze budgets, we consider what sort of timeframe and what sort of return we will make at the end of that investment.

Sarah: That’s a good answer. We actually have a good due diligence article on our page that investors can read more about if they’d like. As a follow-up what should investors be cautious about with these types of partnership deals? Are there things to consider when getting involved?

Neal: In general, a private offering is usually open to accredited investors only. That means it is only available to investors who qualify as an accredited investor and it’s important to realize that there are rules surrounding your credit – either you have a million dollars in your in assets or $200,000 annually in income for the last two years, or if you’re for $300,000 with your spouse. The good thing is that the market value of your IRA counts toward that million-dollar accreditation criteria. There is definitely a high barrier of entry for these private offerings, if you will. Additionally, private offerings are typically illiquid, meaning once you’re committed to it, you’re in it for the duration of the investment. It could be hard to exit prematurely before the conclusion of the investment. Personally, I think those are probably the items to make sure you understand.

Sarah: Exactly, and like you said, that’s going to be typical across the board. It’s important to ask yourself those due diligence questions before entering into an investment of any sort. What is one thing you and NHK Capital Partners learned while navigating COVID?

Neal: We saw this trend of people moving away from heavily dense urban centers to more suburban settings due to the ability to work from home. So, an interesting design factor that we definitely implemented for our business at our clubhouse was to have a dedicated space for an office. That was the first thing we did. I think COVID threw a big wrench in everyone’s life, especially those of builders and developers. We saw a rise in construction cost so we shifted our focus to acquisition deals. We were never bound by an asset class and we were never bound by a single purpose. COVID taught us to see different opportunities.

Sarah: Great answer. It’s all about being able to adapt. Last question here, whether it be you or anyone in the space, how often do we typically see projects getting extended? Is it the norm for things to finish on time?

Neal: You know, it really all just depends. It depends on what’s there to begin with, what has to get done, and things like that.

Sarah: Do you have any final remarks?

Neal: Go with the investment that best fits your needs and aligns with you. At NHK, I mentioned our goal is to bring institution grade investments to our individual investors through structuring them as partnerships and providing private offerings to these to these partnerships. While we started in 2018 and are still very young, we’re very active. Our first deal was actually a ground up real estate multi-family development in San Antonio and we exited at the end of last year. Our mandate is to create the maximum value for our investors. So, quick plug for ourselves, not only do we truly handpick and make sure that our investments are good for ourselves, but investors also find that our team has the experience and the expertise to walk through these investments with our investors.

Sarah: Awesome. So, if somebody wants to learn more about these types of deals, and maybe specifically the ones that NHK offers, where can they go to learn more about what can be expected?

Neal: We have a website NHKCapitalPartners.com. Investors are more than welcome to find us there. We have a “Contact Us”. Our team will respond in 24 hours.

Sarah: Great! Well, thank you for joining me today!

To learn more about passive investing or NHK Capital Partners, click the hyperlinks to be redirected to more education! As always, to ask an IRA Specialist how we can help you!

 

 

How Syndicators Benefit from Self-Directed IRAs

How syndicators are beneficial
Estimated reading time: 2 minutes

Raising capital for deals may be easier than you thought when you have a trusted IRA custodian working alongside you! With over 28 trillion dollars sitting in retirement accounts, self-directed IRAs can be a great option for syndicators looking to raise money. For investment sponsors looking to broaden their investment possibilities, companies like Quest Trust Company makes it easy to tap into the trillions of dollars in Self-Directed IRAs for private assets.

Introducing self-directed retirement accounts to your network can provide huge benefits to you and your syndications. For syndicators looking to raise capital, self-directed IRAs can be a great source because many SDIRA investors like to use their retirement accounts to invest passively – something syndications offer. Plus, the funds in retirement accounts must remain in the accounts until a certain age to avoid taxes and penalties, so the time frames that come along with involvement in certain syndications is usually not a concern to SDIRA investors.

What are the Benefits of Using Quest Trust Company  as a Syndicator?

  • A Dedicated Senior Level Relationship Manager
  • Ability to Submit Requests 100% Online
  • Required Reporting
  • Access to Local and National Events
  • Expedited Transaction Processing
  • Account Access and Visibility
  • Continued Education and our IRA Specialists

When you have a custodian like Quest as a resource, educating new investors about the possibility to use SDIRA funds for syndications is simple and takes the pressure off you! Specializing in self-directed IRA administration and education, we help new investors understand how to invest in alternative assets and will help them every step of the way, from opening and funding assistance to directing money from the account to the investment. After a quick introduction, our IRA Specialists can take over, facilitating in the education process and the account establishment. To make it even easier, we’ve broken down the steps and you can provide these to your potential investors for the fastest service.  Quest Trust Company is the best place to access the wealth of educational and networking opportunities available to all our syndicators – and their networks, too.

At Quest, we aim to be a resource for syndicators looking for a knowledgeable and efficient custodian that can educate their investors and help them start their self-directed journey. Quest Trust Company has more than 19 years of experience in administering and servicing Self-Directed IRAs and the many types of investments that can be held in these types of accounts. We’ve seen how self-Directed IRAs are improving the lives of investors and sponsors alike by allowing every day real estate investors the power to use retirement accounts to invest quickly and efficiently in private assets. You can close more deals by opening a world of private funding through Self-Directed IRAs. If you have an upcoming syndication, ask us how we can help you and your network!

Is the HOA Against Real Estate Investors? – And Other Myths

Is the HOA against Real Estate Investors
Estimated reading time: 4 minutes

Recently, a prestigious outlet published an article that made claims about disputes between the Homeowners’ Association and investors buying property in their neighborhood. Unfortunately, while these claims hold some truth, this article lacked the proper nuance about the reality of the situation. This incident was not between the HOA and all real estate investors, but hedge funds that HOAs are battling. The problem stems from massive hedge funds with billions of dollars in capital coming into these residential neighborhoods and buying out as many properties they can get their hands on. The original article used the term “Hedge Fund,” but a later edit changed this to Real Estate Investor. This change may have been for the sake of accessibility, for the average non-investor might not fully understand the difference between a hedge fund and a regular property investor. In doing so, they have inspired a drive in Homeowners’ associations across the country to pass provisions to limit investment into their communities.

 

HOAS vs Hedge Funds

One HOA group took this to the extreme, attempting to pass provisions so that no investors can buy any properties in their neighborhood. They seemed to be leading the charge and were able to get an interview published with the Wall Street Journal a second time, which was also rereleased on realtor.com. This ultimately led to other HOAs trying to follow suit. The HOA communities believe non-homeowners will not maintain the property as well as a homeowner, directly decreasing the values of the homes as a result. This is truly their only concern. You can see this in multiple articles written on these topics.

Frankly, this information is misleading. Today we are here to debunk some of the current surrounding myths and provide more insight on what is actually taking place.

 

Where Did It All Start

The issue stems from hedge funds buying vast amounts of properties in neighborhoods. Given their immense capital, hedge funds have a unique ability to buy hundreds if not thousands of homes. While they have the leverage to buy all these properties, they do not have the resources to maintain these properties sufficiently. They profit off the sheer number of properties they can turn over, not the value they create by rehabbing. For the average investor the intention is different. Average investors see properties as individual projects, extracting value from these investment homes so they can either sell it at a higher value or keep good tenants in there and build passive income. Historically, HOAs welcome these types of investors because they will buy the undesirable “eye sore” properties in order to rebuild and make it better, which ultimately increases the value of the overall neighborhood.

 

Property Investors Bolster Older Neighborhoods

Time takes a toll on all things, and as neighborhoods become older, more improvements need to be done to maintain a proper standard of living. Situations like these usually cause a mass exodus of current residents into newer developments because the average homeowner lacks the resources and the desire to revitalize aging property. On top of that, these houses will remain vacant, for prospective homeowners will not waste their money on properties that will cost them extra in the long run-on repairs and maintenance. Investors are the ones that ultimately pump life back into these neighborhoods. Rehabbing old properties is not the only perk that investor-owned property will provide; Investors also possess the ability to provide unique sources of financing to people who otherwise could not afford to become a homeowner.

 

Small Business Would Be Threatened and HOA Percentages

HOAs are tied to each neighborhood they reside, and due to this lack of centralization, there is no direct source for this statistic. With some diligent research, however, we have found that guidelines. Multiple real estate sites compound this lack of information a problem, like HAR.com, the site that non-realtors use to research properties for sale, which removed the button to filter out HOA properties entirely.

If investors are unable to purchase properties in these areas, then ultimately you could see the decline of the “small business” area. Real estate investors go above and beyond to find, improve, and maintain these properties through small businesses in the local community that know the area. Consider how many lending companies or property management companies are out there. All the contractors and construction style companies, too. These industries are dependent on investors, and without them, all of these industries would be drastically changed forever.

 

HOA Revenue

Since the beginning of July, 8,730 new homes have been added to the Houston Market alone.  Remember that more than 94% of all properties located in Houston fall under HOA jurisdiction. If investors only own 50% of those homes (most likely they own more), investors would be bringing to HOA neighborhoods 4,400 new people a month that will be paying HOA fees. That’s more money in their pocket.

HOAs run on the capital that they receive from the homeowners. If an investor can bring in new people to either buy, or rent any of these homes, that is more money in their pocket directly. This means more capital for things like parks in the neighborhoods, group activities, pools, etc. From the right perspective those HOA groups should want investors in there to help increase their capital.

 

 

The harm from giant hedge funds buying up properties in bulk isn’t fair to put the “little guy” in the same category as them. As Self-Directed IRA investors, we can help improve neighborhoods by increasing property values for everyone, driving up business for small business owners, and keeping the money in our neighborhoods where it belongs.

The Beginner’s Guide to Self-Directed IRAs

Beginner's Guide to SDIRAs
Estimated reading time: 5 minutes

IRAs are popular with Americans, there is no question about that.  As of 2020, over 47.9 million Americans, or about 37.3% of households own a traditional IRA (Investment Company Institute). The financial perks of these accounts are obvious, and each year more and more people open their own IRA to take advantage.

Traditional IRAs are restrictive, but not SDIRAs
Banks and discount brokers that act as IRA custodians allow you to only invest in stocks, bonds, mutual funds, and the like. These restrictions are used by custodians not to benefit you, but as a form of protection for themselves. Fortunately, it doesn’t have to be this way. There is a much freer, albeit less popular, option: The Self-Directed IRA. While only making up 3-5% of IRA accounts (FINRA), the Self-Directed IRA offers limitless potential. If they have so much utility, then why are they so few and far between? Unlike regular IRA accounts, a Self-Directed IRA requires more involvement on your part. You are the captain of the ship, and it is up to you to make or break the bank. Now this may sound scary, but with a little bit of education you will confidently be able to coast to a secure and fruitful retirement.

 

What is a Self-Directed IRA?

The difference between a Self-Directed IRA and other IRA accounts are the type of assets you can own. With other IRAs, you can buy assets you can usually buy with licensed brokers, like bonds, stocks, mutual funds, and similar investments.  These restrictions are designed to limit risk to you and the broker, at the cost of higher returns. This so-called risk that these brokers are afraid of is not that impactful, in fact, the restrictions on types of assets is just selfish protectionism. To the broker, across thousands of accounts and billions of dollars, transactions that prove to be a few percentage points riskier translate to millions of dollars lost for them, but to the individual these trades are virtually indistinguishable from the traditional transactions from traditional brokers. At Quest Trust Company, we act as a custodian only, charging you for processing and holding, and do not have any incentive to direct your financial journey. This is where the term “Self-Directed” comes into play. You have the power to choose from a large assortment of alternative assets to invest in.

What Assets Can I Buy with a Self-Directed IRA?

With a Self-Directed IRA, you have a broad array of investment options including:

  • Real Estate, including debt-financed and foreign real estate
  • Deeds of Trust
  • Real Estate Options
  • Lease Options
  • Oil and Gas Interests
  • Small, non-publicly traded corporate stock
  • Limited Liability Companies
  • Limited Partnerships
  • Apartments
  • Security Agreements and Notes
  • Tax Lien Certificates
  • Unsecured Notes
  • Foreclosure Property
  • Joint Ventures
  • Racehorses
  • and more…

It is important to note; however, that with added freedom, comes additional risk, so due diligence is essential in making sure you make an informed decision.

Real Estate Investing with a Self-Directed IRA

Investing in real estate with a self-directed IRA can be done in a few easy steps.  The contract will name Quest Trust company as the buyer FBO (for the benefit) of you. When people think of investing with IRAs, they only imagine long-term profit that they can enjoy when they are retired. But investing in real estate allows for the potential to earn in the more immediate future. While you and prohibited parties – your direct ascendents, descendants, spouse, and the manager of your IRA – cannot receive any money from the account, there are ways to utilize the cash you earned from your real estate endeavors. You can use any earned money to pay any workers or contractors that you hired to rehab the property, or you can flip those profits to buy even more real estate! Real estate investing with self-directed IRAs is just like property investing in your name, but you must keep the money under the jurisdiction of your IRA until you turn 59 ½ like any other IRA transaction.

 

Note Investing with a Self-Directed IRA

A promissory note is contract where one party agrees to pay other after a certain amount of time. This is a common financial tool used often, and if you have taken out a loan, usually you have signed one of these. With a self-directed IRA, you become the bank. The IRA would loan out the money on your behalf, and any income generated from these investments would be granted to your IRA tax-free! Again, it is important to be aware of prohibited transactions, since cannot lend money to any disqualified persons.

Private Equity Investing with Self-Directed IRAs

The options to invest in private equity with Self-Directed IRAs is virtually limitless. You can gain ownership in any entity from your local mom and pop shop to million-dollar private companies. The possibilities are limited to you and your due diligence. With the proper research, you can make fruitful transactions that can bolster your retirement fund. Whether you invest in pooled vehicles and funds, like venture capital funds or private equity funds, or directly into companies, you can make dividends tax-free!

 

Crypto Investing with Self-Directed IRAs

One of the newest assets that you can hold with a Self-Directed IRA at Quest is crypto. Over the past two decades, cryptocurrencies have grown exponentially. They started as small, experimental financial tools and grown into massive household names, holding trillions of dollars in market value. Common Cryptocurrencies, like bitcoin, Litecoin, and Ethereum, all can be held with a self-directed IRA with Quest trust company. Using the ErisX platform we made investing in this lucrative assets fast and easy, so you can capitalize on the massive growth of these new technologies.

 

As you can see, the potential for investing is vast, and it’s never too early to start saving for retirement.  When investing in a vehicle like a self-directed IRA that could be more comfortable to you, you can greatly help grow your wealth faster and greater. Though we’ve only listed just a few investment examples here, the other benefits beyond diversification are endless. If you ever have questions about how to get started with a Self-Directed IRA at Quest, call us at 855-FUN-IRAs or schedule a free consultation with an IRA Specialist

 

The Importance of Paying Attention to Your IRA Investments

Estimated reading time: 5 minutes

It’s property tax time in Mississippi as I write this in August, 2022. It reminds me of the importance of paying attention to your IRA investments. 

Every year on the last Monday of August tax liens which are still delinquent are sold at public auction (MS Code Sec. 27-41-1 (2020)). The tax collector will deliver to the purchaser of lands sold for taxes a receipt showing the amount paid, a description of the land sold, the amount of taxes due, and the date of sale, and the receipt signed by the tax collector is evidence of the purchase of the land by the purchaser (MS Code Sec. 27-41-75)). The owner, or any persons for him with his consent, or any person  interested in the land sold for taxes, may redeem the property at any time within two years after the day of sale, by paying the chancery clerk, regardless of the purchaser’s bid at the tax sale, the amount of all taxes for which the land was sold, and interest on all such taxes, including all costs incident to the sale, plus interest at the rate of 1.5% per  month. (MS Code Sec. 27-45-3 (2020)). When the period of redemption has expired, the chancery clerk will, on demand, execute deeds of conveyance to individuals purchasing lands at tax sales (MS Code Sec. 27-45-23 (2020)). 

For example, the tax sale this year is on August 30, 2022. The period of redemption will expire for 2019 tax liens, which were sold in the August, 2020 tax sale, on August 31, 2022. If you own or have a lien on a property and fail to redeem it by the deadline, you will lose your interest in the property. 

Mississippi is a tax lien state. In other words, what is sold at a tax sale is the lien on the property, which can later mature into title to the property if the property taxes are not redeemed. Other states, like Texas, for example, are tax deed states, which means that what you are buying at the tax auction is a deed to the property, subject to the limited right of the owner or other interested party to redeem the property by paying the property tax purchaser the amount he paid at the tax sale plus a 25% penalty in the first year and a 50% penalty in the second year. Be sure to learn the rules for investing at tax sales in the state where you are investing. This is especially important if you are investing through online bidding. 

 At Quest Trust Company we receive notices that the chancery clerk is required to send to owners and lienholders of the pending expiration date of the period of redemption in Mississippi every year. Those notices are forwarded to our clients. Sadly, in some cases the clients do not react in a timely manner, and their ownership or liens get wiped out by the tax sale.  

 Let me give you some examples. One client who had a recorded lien against a property received a notice that stated “the title to said land will become absolute in said purchaser unless redemption from said tax sales be made on or before the 31st day of August, 2022.” The client wasn’t sure what to do with the notice, but Quest was unable to give him any tax or legal advice. Fortunately there was a second lien on the property and the second lienholder made sure that the taxes were paid and the property was redeemed. That was a close call. 

 In another case, the client actually lost the title to a condominium worth over $200,000 for a delinquent tax bill of less than $5,000. His IRA had to hire an attorney who sued to set aside the sale due to defects in the tax sale. Fortunately, after approximately 2 years of litigation the IRA recovered title to the property. The whole mess could have been avoided if the client had just been paying attention to the payment of taxes. 

 The lesson to be learned from these experiences is this – you need to pay attention to the payment of taxes and other expenses due on property owned by your IRA or on which your IRA owns a lien. This applies to other bills also, such as insurance. Do not ignore notices which you may receive or assume that the problem will be taken care of by other parties. Remember, in a self-directed IRA you are responsible for monitoring your investments. Your custodian is a neutral party holding title to your IRA’s assets. They are not permitted to provide you with tax, legal, investment, or deal structuring advice. 

Here are some helpful tips to help keep your IRA investments safe: 

  • Always keep track of deadlines that pertain to your investments, including tax payment deadlines, loan maturity dates, the lien expiration date for loans, insurance due dates, and any other deadlines you know about. 
  • If you invest in a state where you do not live, be sure to find out what the local deadlines are that may affect your investments. 
  • Never assume that any third party, including your borrower, investment partner, or custodian, will take care of the problem if you receive a notice of some sort, such as the pending expiration of the redemption period discussed in this post. 
  • Make it a habit to learn the relevant deadlines for the jurisdiction where you are investing and enter them into your calendar when you first make the investment. 
  • Either close a real estate purchase or a loan secured by real estate at a title company or closing attorney’s office so that you know for sure that taxes, homeowner’s association dues, insurance binders, and other relevant bills are current when you first make the investment, or if you don’t do that then have the discipline to do that all yourself. 
  • Always make it a condition of any loan modification and extension to have the borrower provide evidence that taxes, homeowners’ association dues, insurance, and other bills are paid current before agreeing to the modification and extension of the loan. 
  • Take the time to at least have an idea of the foreclosure procedures in the state where you are investing if you are making a loan. 

Good luck with your investing! 

-H. Quincy Long, CEO and Founder of Quest Trust Company

If you have any questions about Self-Directed IRAs at Quest Trust Company, our specialists are here to help. Schedule a free call today!

5 Tips to Help you Easily and Successfully Raise Investment Capital

5 tips to help you raise investment capital
Estimated reading time: 5 minutes

If there’s one thing, we can all agree on, real estate is expensive, especially right now. For the average person looking to raise capital, whether it be for a deal or for a private company, getting your hands on investment capital can be difficult. Many start-ups, investors, and syndicators alike turn to raising funds for their deals or small businesses. Capital raising can be a great way to secure funding for a property and allows real estate investors the ability to team up and create relationships other partners that they’ll have in their network for future opportunities.

But what does it take to get started and acquire those funds if you’ve never raised capital before? Getting started can quickly become overwhelming if you don’t know the rules or how to take the first (or next) step! to But as people turn to Self-Directed IRAs for funding, we’ve seen a thing or two, so we’ve gathered the best tips to help you raise as much investment capital as possible!

1. Choose Your Funding Method

          There are plenty of ways someone can raise money, and you aren’t always limited to just one method. Options like crowdfunding allow you to cast a wide net and reach a large audience who might potentially want to provide funding for your startup or investment. If you’d rather start small, asking your personal network is a great place to start. But always make sure you’re comfortable taking money from a friend or family member!

Some people turn to venture capital, which is usually linked to a firm who manages the money invested by limited partners. Of course, the most common way we see funds being raised here at Quest is with Self-Directed IRAs. When investors use their old 401(k) and IRA funds to invest, it not only benefits the investor since they’re usually getting better returns than on a publicly traded investment, but it also benefits those seeking funds because there is more possibility to secure funding. With over 2 trillion dollars in retirement accounts, Self-Directed IRAs are one of the best places to look for funds.

2. Investment Reflections and Future Earnings Projections

          It goes without saying, but the past few years have been a little crazy! We’ve seen ups-and-downs throughout the pandemic, some of which have had significant effects on small businesses, startups, and those raising money for investment properties. Take a moment to reflect on your past year. If you’re a small business owner, look at your numbers. For those with real estate deals, look at your past portfolio. What were your initial goals for the last year and how close were you to achieving them? What were your biggest accomplishments? What were your lessons learned? These are all questions you should be asking yourself.

Once you’ve taken a moment to reflect, start thinking about what you plan to accomplish for the upcoming year. With this money, how do you expect to make it a successful deal or an income-generating year for your business. Be able to bring estimated numbers and a plan to reach those goals for at least the next year, but 12 to 18 months and more will show them you’re prepared and determined.

3. Have a Solid Elevator Pitch

When you meet with potential investors, you’re going to have to know what to say. Never go into a pitch without knowing the exact message you want to get across and how you’re going to successfully convey it. As mentioned, bringing any past numbers or a portfolio of success will always help your pitch, but you don’t want to become too rigid in your approach. Some of the best pitches are ones that tell a compelling story. Take your potential investor on the journey, whether that be through the project or business goals.  By using verbiage that inspires, creates emotion, and accurately articulates concepts and goals, you’ll be able to perfect your elevator pitch and secure more capital.

 4. Know Your Audience and Understand the Potential Limits

          Once you have chosen your method for how you want to raise capital, and you’ve perfected what you’re going to say, you can start reaching out to potential investors! But before you make your introduction, make sure you understand the audience. Not all investors are the same! For example, we’ve mentioned that Self-Directed IRAs are a great source of capital, but don’t expect all self-directed investors to understand the same types of opportunities. The beauty of self-direction is that investors can use these accounts to purchase any private investment that they know and understand, within limitation. Some investors will want to use their money to fund specifically small companies, while others will strictly invest in multifamily deals. Additionally, understanding the rules of self-direction will help you know if you should even be turning to SDIRAs in the first place!

For syndicators, it’s extremely important that you understand the very specific rules and regulations put in for real estate syndication fundraising by the SEC. In other words, the syndicate’s legal entity must be registered with the SEC and raising capital is only a matter of concern for sponsors. There are two rules syndicators need to be aware of. Rule 506(b) says that syndications filing under this one are allowed to raise any amount of money from accredited investors but cannot engage in any advertising efforts or perform general solicitations for their offerings. They can have up to 35 non-accredited investors with no limit on the number of accredited investors. Then there is Rule 506(c). Filing under this rule allows a syndication to market the offer but restricts you from raising capital from non-accredited or sophisticated investors.

 5. Ask for the Order

        Last but not least, don’t be afraid to simply ask for what you need! Don’t beat around the bush. Go into any pitch confidently and with your goal always in the back of your mind. Make sure you’re not only coming prepared with the answers to questions you know your investors will want to know, but also ask if there is any other information you haven’t been able to provide that you can answer now or follow-up with at a later date. If you’re at an open-networking opportunity, always provide your contact information and ask for others’ business cards so that you can grow that relationship. Never leave a pitch without asking for your order!

 

Raising capital doesn’t have to seem like a daunting task, and the more prepared you are the easier and more successful you will be at obtaining capital. If you would like to network with other investors and Self-Directed account holders, Quest events are a great place to turn as they allow you the platform to pitch your deal or service! If you would like more information about how Self-Directed IRAs can be a source of funding for your deal and how they can help your small business, call us at 855-FUN-IRAs (855-386-4727) or  schedule a free consultation with an IRA Specialist.

What it Takes to be a Successful Woman in Business – Feature By Nicole Bacot of Quest Trust

What it takes to be a successful Woman in Business
Estimated reading time: 4 minutes

Recently, Nicole Bacot, an IRA Specialist at Quest Trust Company, had the privilege of being featured in a real estate magazine where she was able to share her story as a successful woman in business!, Written by contributing author Charles Peckman,  read the article below or visit the magazine on the Geraci Law Firm website.

RETURNING TO HER FINANCIAL ROOTS

– featured article for Geraci Law Firm
Written by: Charles Peckman, Contributing Author for Originate Report

“As an IRA Specialist at Quest Trust Company, Nicole Bacot says that every day is a new challenge – and a new opportunity – to assist clients through the complicated process of saving for retirement and diversifying an investment portfolio.

After taking time out of her career to focus on caring for her children, Bacot said she is ecstatic to return to her financial roots. When thinking about this new chapter in her career, she added that the lessons learned from her parents have been instrumental in her professional development.

In college, for example, Bacot recounted working for her father, a broker, and attempting to absorb as much information from him as possible. These beginnings, she said, led to ‘a fascination with finance.’

“My dad taught me a lot about analyzing the stock market and delving into investment strategies,” she said. “Watching both of my parents work so hard served as a huge inspiration to me.”

This experience led to positions within many companies, including Regions Financial Corporation, Principal Financial Group, Rodan + Fields, and Quest Trust Company, with whom she has been since 2020.

Paired with her parents’ mentorship, Bacot said she cannot stress enough the importance of having mentors from across the financial sphere. This includes ‘taking a chance’ on a younger professional, as her mentors did early in her career.

“These mentors were incredibly important – and they remain so to this day. I am a firm believer that no one is ever finished learning,” she said. “When I was starting out, my mentors gave me a lot of credibility in rooms that, if I were alone, wouldn’t have yielded the same result. As a 25-year-old woman, you’re seen as ‘some kid’ fresh out of school who doesn’t know anything.”

It is no secret, Bacot said, that the real estate and financial fields are male-dominated industries. Although easier said than done, she added that it is critical to rise above discriminatory environments.

“I know those kinds of interactions, and I have seen men come into my dad’s office and navigate through problems like times gone by,” she said. “All I know is that I wanted to pursue a career in the financial industry, and help people save for retirement because that’s what my dad did. I have seen so many stories about people starting too late or making bad financial investments, and regardless of the bad actors who remain, my main responsibility is to my clients.”

This drive to guide clients through the investment process – and her experience in the field – allows Bacot to navigate difficult situations with ease.

“I knew I wasn’t going to advance if I let side comments or sexist attitudes derail me,” she said. “I took stock and figured out how to make it work, and not let anything get in the way of carving a niche for myself.”

In addition to changes in workplace-based gender disparities, Bacot said society at large is evolving.

 

“It’s not the case anymore where many households have one income and the male figure is the sole breadwinner,” she said. “So many women are entering the workforce and that’s not changing anytime soon. More women, too, are switching from ‘supporting roles’ and instead are stepping up and saying, ‘I can be the boss just as much as you can.’”

One aspect of Bacot’s journey that has been ‘formative’ was having children, she said.

“I think having kids, as much as it took me out of the workforce, really changed my perspective and allowed me to appreciate going back into the workforce,” she said. “Growing up and watching my parents working so hard…when you’re a kid, you really don’t understand that, and the sacrifices they made. Now that I have my own family, I’m trying to instill in them the importance of hard work, education, and dedication.”

Watching her mom work and saying to herself ‘how did she do that?’ transfers into her work ethic, and love for the varied nature of working as an IRA Specialist.

“I would say every day is different, which I love,” Bacot said. “Every day is busy. Because I have experience in the oil and gas world, I can bring that information to clients because it is another asset class that they can invest in. I strive to be number one. Sometimes my husband will say, ‘you know it’s okay to be number two, right?’ But at the end of the day, being number one feels pretty good!”

Looking forward, Bacot said she is perpetually expanding her knowledge base – especially when it comes to emerging asset classes – and looking for ways to assist her clients however she can.

“I’m always striving to learn more and advance my skill set,” Bacot said. “Returning to this field I love so much after taking time off to be with my children has really opened doors for me. I also realize how instrumental my mentors were and am always looking to guide young women through this multi-faceted landscape.”

What’s the Difference between IRA Administrator vs IRA Custodian?

What is the difference between administrator v custodian
Estimated reading time: 3 minutes

When you hear the term “custodian” and “administrator”, you might think that they are the same and can be used interchangeably, but they’re actually two very different types of IRA providers. Both have a very defined role and play their part when it comes to self-directed IRA retirement plans, but it’s important to understand the function of both entities.

IRA Custodians

  • IRAs must have an appointed custodian, no matter the account type or even if the account is self-directed
  • All Custodians like Quest Trust Company are required to meet Federal IRS requirements
  • Every Custodian is overseen by state or federal bank regulators
  • It is very important to remember custodians are allowed to hold custody of assets

IRA Administrators

  • Administrators act more like middlemen who work with a custodian to provide their services.
  • They are the neutral party responsible for account maintenance, administration of paperwork and related account filing.
  • Administrators and custodians can be two separate entities, but other times can be both under the same parent corporation.

Federal Requirements

One of the biggest differences is regulation. While many administrators claim to be regulated, this is in fact not the case. Custodians have onsite examinations conducted by bank regulators to check that they follow standard rules and that they are financial stable. Both may put policies in place, like information security policies and emergency/disaster recovery policies, and can conduct internal and external audits, but administrators are not required to implement any policy while custodians are. The same goes with training; custodians require annual employee training over a variety of topics such as Customer Identification Program, Bank Secrecy Act/Anti Money Laundering, Information Security, and Disaster Recovery while administrators are not required.

To put it simply, the custodian will hold title to your assets on behalf of your IRA and are responsible for IRS reporting, while the administrator will simply execute your investments according to your instructions. Differentiating the two really comes down to regulations and how much responsibility each one has. We’ve included a helpful infographic below to better explain the differences for what each one can do!Administrator vs IRA Custodian

When deciding with custodian and administrator you want to go with, always be sure to do your own due diligence, just as you would do with an investment before entering into a new deal. Make sure they understand the asset class you plan to invest into, whether that be more traditional or alternatives, like those offered at Quest Trust Company. Self-directing an IRA at a custodian like Quest can give you peace of mind knowing that your account has an extra level of security and that these IRA are being protected by many regulations. If you have any questions about Self-Directed IRAs at Quest Trust Company, our specialists are here to help. Schedule a free call today!

 

Emmitt Smith Joins the All-Star Lineup of Speakers for the Quest Expo

Emmitt Smith Joins Quest Expo
Estimated reading time: 2 minutes

It’s not every day that you can step into a meeting room and listen to a former NFL professional athlete share his expertise alongside countless other experts. At the Quest Expo, we’ve made it happen!

Our Expo stage just got a little bit hotter with none other than Superbowl champion and entrepreneur Emmitt Smith, and you’ll have the once in a lifetime opportunity to learn how he was able to create success on and off the field. Making his rise in the business world after leaving sports, there is no better person we can imagine sharing motivation and financial tips for what it takes to achieve your retirement goals at the Expo.

One of the biggest issues many professional athletes face after they leave their sport is what the next step. After years of being a football player or basketball player or hockey player – whatever it may be – figuring out what to do during that next phase of life can be difficult. Most of these athletes have dedicated all their time and efforts to sports rather than what they plan to do next. Emmitt has been able to break that cycle, learn what it takes to be a successful businessman, and will be here to share his story. Mr. Smith has proven that no matter who you are, where you come from, or your level of experience, it is possible to create wealth for yourself in real estate investments if you have the desire.

Smith says that many of the qualities that led him to become the NFL’s leading rusher can carry over to business. “You can’t sit back and get happy with a little bit of success. Have that burning desire to do more. Think outside the box. Push the envelope. Keep things fresh,” he shared with CNBC.

We would love to have you join us and Emmitt at the Quest Expo. We know that in the fast-paced investment industry, timing is everything and by attending the largest alternative investing conference in the nation, you’ll be on the cutting edge. The weekend will be filled with outstanding education, keynote presentations from leading experts, diverse networking, local and national exhibitors, and thought-provoking panels that incite creative new strategies beyond imagination.

Retire rich in real estate this fall at the Quest Expo and get your exclusive ticket today!