Using Self-Directed IRAs and 1031's to change the game
Knowing the market shifts, how to prepare for
In this issue, we ’ re diving into the power of building the right connections, because who you know can accelerate what you grow Plus, we ’ re sharing proven wealth-building techniques you can put to work right now, from creative financing to smart asset moves that build long-term gains. These are strategies you can actually use, not just theory. It’s all about helping you move the needle forward with confidence.
With the market constantly shifting, we ’ re also bringing you strategies to stay clear-minded and focused Simple mindset shifts and decision-making tools can make all the difference in keeping your momentum strong We know this ride can feel like a roller coaster, but staying steady is key. Let’s move forward, together, and on purpose.
Why Networking Is the Secret Weapon of Every Successful Real Estate Investor
When it comes to real estate investing, knowledge is power, but relationships are leverage.
Whether you're a seasoned pro or just getting started, your ability to connect with the right people can open doors that money or experience alone simply can’t. Deals get done through conversations, trust is built through shared stories, and the best opportunities often come from a simple, “Hey, I know someone who might be a good fit for that.”
That’s the power of networking And there’s no better place to build your network this year than at the 2025 REIA Expo & Tradeshow, happening Tuesday, July 8th in Milwaukee.
Real Estate is a Relationship Business
You’ve probably heard it before: “Your network is your net worth.” It’s more than just a catchy phrase it’s the reality of how deals are sourced, funded, and closed in this industry The right connection can mean a private lender who helps you scale faster, a contractor who actually shows up and does quality work, or a mentor who’s been through multiple market cycles It could be a wholesaler who keeps you in the loop on upcoming deals, or a joint venture partner that helps you go bigger than you could on your own. And it all starts by being in the right room.
Stop Networking Like It’s 2010
Let’s be honest swapping business cards and collecting LinkedIn connections only goes so far Real networking is about real conversations It’s about showing up consistently It’s about being known in your local investing community. If you ’ ve ever said to yourself, “I wish I had more deal flow,” “I’m looking for good contractors,” “I need funding for my next flip,” or “I want to meet more investors like me, ” then this is your room. Your moment. Your advantage.
Let’s Get Face-to-Face
There’s only one way to build meaningful relationships in this business, and that’s to get off social media, step away from your spreadsheets, and show up in person. So don’t miss your chance to be part of the biggest networking event of the year for local real estate investors.
�� Scan the QR Code to Sign up!
�� Tuesday, July 8th, 2025 - Doors open at 5:45 pm
Self-Directed IRA & 1031 Exchanges: Powerful Tools in a Real Estate Investor’s Arsenal
BY: DAVID GORENBERG, JD, CED VIA REALESTATEINVESTINGTODAY.COM
What is an IRA?
IRA stands for Individual Retirement Arrangement. Investors contribute to their Individual Retirement Accounts The Internal Revenue Service tells us that a traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible. They use the word “ may ” because there are annual contribution limits based on age and income, and whether the investor is covered by a retirement plan at work For 2023, the annual contribution limit is $6,500, or $7,500 if the investor is age 50 or older.
Contributions made to an IRA within the IRS limits are tax deductible, and any interest or growth on those investments is tax deferred When the investor starts making withdrawals, those withdrawals are taxed as ordinary income at that time.
IRAs are held by a custodian, such as banks, brokerages, or other financial institutions, many of which have recognizable names. Except for certain collectibles, there are very few limits on the kinds of assets an investor may hold in their IRA (See IRS Publication 590a for more information on IRAs.) However, the brokerages and financial institutions whose names we see most often tend to limit investments to stocks, bonds, and mutual funds
What is a Self-Directed IRA?
A Self-Directed IRA (“SDIRA”) is an IRA held by a custodian that allows for investment in a broader range of assets than other IRA custodians These “alternative assets” may include real estate, precious metals and other commodities, tax lien certificates, and others. Additionally, while the custodian administers the account, it is directly managed by the investor, which is why it is called self-directed. Among the more common investments in SDIRAs is investment in real estate These investments can be in the form of single-family, multi-family, commercial, industrial, office, improved or unimproved land, or virtually any other interest in real estate Foreign real estate is also permitted
When owning real estate inside of an SDIRA, all income from the real estate belongs to the SDIRA, not to the investor Thus, the investor cannot use any rental income from the real estate to cover personal living expenses. Additionally, when selling real estate that is owned by the SDIRA, all profits or losses belong to the SDIRA and continue to grow tax deferred. If the investor chooses to reinvest in more real estate, there are now timing restrictions, and proceeds may be held in the SDIRA until they are deployed toward the acquisition of a new asset. However, there are prohibitions on “selfdealing” that are essentially the same as the related party rules in a Section 1031 exchange This rule also prohibits investors from making any personal use of the SDIRA asset, though it can be rented to family members at fair market rental rates.
Section 1031 Exchanges Compared to SDIRAs
Section 1031 of the Internal Revenue Code Internal Revenue Code allows an owner of business or investment real estate to sell old property (relinquished property) and acquire new property (replacement property) without paying any taxes on the profit (capital gains) of the sale of the old property. The principle underlying these “tax-deferred exchanges” is that by using the exchange value from one property to buy another instead of receiving cash for that exchange value the property owner is simply continuing the investment in the original property As such, the IRS will not recognize the sale as a taxable event, provided that the owner (referred to in this article as the “taxpayer” or “exchanger”) adheres to the many rules governing exchanges
As with the SDIRA, real estate can be any asset class – single-family, multi-family, commercial, industrial, raw land, etc Section 1031 rules require that both the relinquished and replacement properties be “held for productive use in a trade or business or for investment. This is similar to the prohibition on self-dealing discussed above. Moreover, Section 1031 provides for a deferral of the capital gains and depreciation recapture taxes, much like the SDIRA But the similarities largely fade after this point.
First, there are no limits to the amount of money that can be invested using Section 1031. Further, while rental income from SDIRA property must stay within the SDIRA, the income from Section 1031 exchange property can be used by the taxpayer to pay their own personal expenses. Additionally, upon the sale of the relinquished property, the proceeds must be held by a qualified intermediary, and the taxpayer must avoid even “constructive receipt” of the exchange funds. Finally, there are strict time limits imposed on Section 1031 exchange transactions.
Starting with the date of sale of the relinquished property, the taxpayer must identify a short list of potential replacement properties within 45 days and complete the acquisition of one or more of those properties within 180 days (or the due date of the taxpayer’s tax return for the year that the exchange commenced).
And while foreign real estate may be part of the taxpayer’s portfolio, foreign real estate is not likekind to domestic real estate, and they cannot be part of the same 1031 exchange transaction.
Consult with a Knowledgeable QI, Financial Planner, Attorney, and CPA
As can be seen, owning real estate in an SDIRA, or outside of the SDIRA, each have merits and pitfalls. Each can be part of a successful real estate investment strategy, independently, or together. This article is not intended to be an exhaustive dissertation on the uses of these two investment strategies, but rather a conversation starter Investors are encouraged to discuss their unique situations with their financial planner, attorney, and accountant.
And while foreign real estate may be part of the taxpayer’s portfolio, foreign real estate is not likekind to domestic real estate, and they cannot be part of the same 1031 exchange transaction.
Consult with a Knowledgeable QI, Financial Planner, Attorney, and CPA
As can be seen, owning real estate in an SDIRA, or outside of the SDIRA, each have merits and pitfalls. Each can be part of a successful real estate investment strategy, independently, or together. This article is not intended to be an exhaustive dissertation on the uses of these two investment strategies, but rather a conversation starter Investors are encouraged to discuss their unique situations with their financial planner, attorney, and accountant.
The material in this article is presented for informational purposes only The information presented is not investment, legal, tax or compliance advice. Accruit performs the duties of a Qualified Intermediary, and as such does not offer or sell investments or provide investment, legal, or tax advice David Gorenberg is a third-generation real estate investor, an attorney and Certified Exchange Specialist®, and serves as Director of Education for Accruit Members of National REIA can take advantage of special pricing from Accruit Learn more by contacting David directly at 2157706354, or by visiting
NINJA: New Investor Networking
NINJA:
Dave Graf | 920-203-6087 | dave@gsifoundations com
Landmark Credit Union is the largest Credit Union in Wisconsin with over 375,000 members, 36 branches, serving 35 counties in Wisconsin and 2 counties in Illinois, over 900 dedicated associates, and over $6 Billion in total assets Landmark is a not-for-profit financial cooperative locally owned by our members and we return profits to our members, who enjoy better rates and lower fees on a full range of straightforward financial options. We serve those who live and work in Southern Wisconsin and Northeastern Illinois, but our goal remains the same as it was in 1933 – to provide affordable financial services, committed to serving our members with consistent value and convenience. We strive to enable our members to become financially self-sufficient and successful. In addition, we demonstrate the value and convenience of membership in Landmark Credit Union by daily fulfilling our promise, “You’re worth more here ”
It’s Roller Coaster Time
BY: JANE GARVEY VIA REAL ESATE INVESTING TODAY
“Rents are Up”, “Rents are Down”, “Prices are Up”, “Prices are Down”, “Showings are Up”, “Showings are Down” you can get whiplash just reading headlines these days Most of these headlines are market specific, and they could be different if you just shift the time frame observed by a month So, how are they relevant? Let’s take a deeper dive into this
Headlines are attention grabbers. Many people see them and don’t bother to look for the details. In today’s market we can see two headlines that are exact opposites in two different new stories on the same day. Some people will have seen one, other people may have seen the other. They will have divergent views of what is happening, and if they haven’t dug any deeper, they may be misinformed. As far as accuracy of the stories – even a broken clock is right twice a day We can paint any picture we want if we observe things in a market like this and choose the right location and time frame
What these headlines do affect is the perception people have of the housing markets Most people only have experience with their own rent or the value of their own home. Most have a preconceived notion of what is happening. There are headlines out there that will reinforce their perception.
As an investor, there are always opportunities. Sellers who perceive that there are very few buyers, or that prices are headed down are more likely to accept offers that give you the opportunity to profit In any market, there are sellers who need to sell due to life circumstances Some of them can’t wait for the market to shift Be prepared to buy, if the price is right
Even when the overall market is struggling, there are often market segments that are doing well Starter homes can be doing great while luxury homes are struggling. Office properties can be appreciating while malls are struggling. Tulsa, OK can be seeing good appreciation while Minneapolis isn’t. Dig into the data and figure out if the market fundamentals for an area, or market segment, support your investment strategy.
When we face a confused market, the risk is bigger, and the rewards can also be bigger As investors, we can “sit it out” to avoid the risks, or we can mitigate the risks and seek those bigger rewards Your decision on which strategy to choose will likely depend on where you are in your investing journey
How do we mitigate risk?
Due diligence. Research the heck out of the property, the market, the people, and the legislative climate in the area. If the market is slow, you will have plenty of time to do this, and much of it can be done before you identify a particular property
Buy low, sell high This is way too simple an answer, but it is important The more risk involved, the lower the price you should pay If you think you will have a longer holding time before you get a fix and flip sold, you need to account for the extra holding costs in your purchase formula. “70% of After Repaired Value – Repair costs” may not be the right price. 60% might be the right ratio. Run the real numbers and figure out the ratio for your market.
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Multiple exit strategies When we were buying a rehab in Dec 2008 as the housing market was collapsing, we negotiated for seller financing that allowed for the very-likely scenario that it would be more appropriate to rent than sell when the rehab was finished. This indeed was the case. We than went to a lease-option as our sales strategy to recover some of our rehab costs, and to minimize the headaches that would come with a rental
Have reserve funds lined up. Keep loads of reserves so that you have the flexibility to change direction as needed Reserves are not necessarily sitting in a bank account, but they should be funds that are accessible quickly if needed. A good backstop will keep your portfolio safe from the unplanned wild pitch.
Don’t put all your eggs in one basket. It would be better to make a handful of smaller investments than one big one. If you don’t personally have the funds to do this, get seller financing or share your investments with other investors Keeping the investments small compared to your portfolio size is like diversifying your portfolio in the stock market. They may not all be big winners; but you have more shots at it.
There are always sellers who need to sell. Likewise, there are always buyers who need to buy. You can minimize your holding time by making sure you are providing what they want. Buyers are not all the same Providing an outdoor pool in International Falls, MN will not get you the same return on investment as providing the same pool in Orlando, FL. In one place it is an unwanted maintenance nightmare, in the other place it is almost a necessity. Figure out who your buyers are likely to be and cater to them
There are always renters looking to rent. Taking the time to figure out what a renter will value is important to maximize rent and minimize holding time This also varies with your market Do some research before you figure out your rehab plan
Your strategy matters To be effective in our investing we need to be providing solutions Buyers and sellers with problems will be more likely to work with us if we can provide a solution that benefits them in their situation. When there is a scarcity of buyers or sellers in your market, the more tools you have the better Take some time to investigate the educational programs that your local real estate investors association offers Also check into the educational programs that are offered in National REIA’s National REIAU program (www.nationalreiau.org). The more you learn, the more problems you can solve. Learn, while put your plans in action
Jane Garvey is President of the Chicago Creative Investors Association.
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COMING UP: Bus Tour!
seller lead to rehabbed flip or rental
What Makes This Event Special?
The Bus Tour combines in-depth education with practical experience: Expert Guidance: Learn from a seasoned investor who has mastered the buying and rehab process
Real-World Training: Explore three properties, diving deep into the challenges and triumphs of each deal.
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Who Should Attend?
Whether you're a first-time investor or a seasoned pro, this event is packed with insights to help you:
Build confidence in evaluating properties.
Refine your negotiation strategies.
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Cash Buyers by Generation
BY: BRAD BECKETT, REALESTATEINVESTINGTODAY COM
A long time ago, some long forgotten wise sage said it best; Cash is king Today’s graphic from the Realtors says 26% of homebuyers last year paid cash for their purchase Next, they take it one step further by showing who exactly is carrying around all that cash. Their data came from their latest Home Buyers and Sellers Generational Trends report.