On one hand, we have the continued ineffectiveness of governmental housing policies to encourage economic recovery. Hey, the easy judgment of that is that if everything was back on track, why would we keep needing new programs? If HAMP and the like aren’t serving their purpose, that means there’s still a need to solve the same problem, hence: no recovery.

The latest? Word that Hawaii’s own President Obama will be extending the 2007 Mortgage Forgiveness Debt Relief Act (which lets homeowners completing successful short sales write off their taxes from otherwise taxable deficiency waivers). The only reason to extend it beyond the current 2012 expiration date is that we’re not yet where we ought to be. I mean, that’s a quick two-cent judgment, but it kind of makes sense on the surface, right?? (By the way, I’m in favor of extending the policy as it encourages homeowners with over-leveraged mortgages to complete short sales and ideally put them back on a fiscally sound economic path and, therefore, aid overall economic health).

The other view is that we’ve seen 5 straight months of rising median sales prices, according to data by the Hawaii Board of Realtors. The data doesn’t lie, but they’re just numbers. That’s the difference between data and information. Information tells a story.

Courtesy: Hawaii Board of Realtors

So what are the implications of this 5-month run? Does it mean we’re out of the doldrums and can expect a continuation of the current trajectory? Are Hawaii housing prices expected to keep creeping north? Possibly. Then again, January’s median price of $618,900 (single family) isn’t far from September 2010′s price of $620,000. If you’re following along, then you know what that means — prices must have dropped after that month in order for a 5-month run to bring us right back to where we are.

Cycles, my friend. Cycles. It’s all in what you make of the data. We could see another dip similar to before or this might be the last one that sees climb out of the tip into a brighter day.

I will say this — the one thing that sort of crushes the cycle idea is that surrounding factors are always changing. Today’s geopolitical environment is a powder keg. Syria’s on the brink of civil war as Assad refuses to cede power. Iran is threatening everybody with nuclear bravado, especially Israel, which history tells us is a bad idea (see: Baghdad). And Greece is once again with empty pockets asking for a handout.

Does this affect Hawaii housing? It certainly has ripple effects through the American economy, so I’m very inclined to say “yes”.

Your thoughts?

Reinstatement — Reinstating your loan means bringing it current. You’ll do this by paying off the arrearages (how far behind you are) and possibly some accrued attorney fees. Your lender will give you the amount. Your loan should then go back into a ‘good’ standing with your bank. The caveat? If you had the funds to reinstate your loan, you probably wouldn’t be reading this article. But maybe you have a relative or other source of funding you didn’t have beforehand (like a new job) and can now get back on track.

Filing Bankruptcy — Ok, filing for bankruptcy is a bigger deal than just stopping foreclosure, but it does halt the process in its tracks until you get your affairs in order. By all means, consider the consequences, both temporary and long-term of filing “BK” as there are different “chapters” with different schedules and intended outcomes (ex. wiping out debt versus reorganization). Consult a bankruptcy attorney if you have any questions as it can be a tricky legal process.

Deed-in-Lieu — A deed-in-lieu of foreclosure is when you voluntarily deed your property back to your lender. It’s still a form of foreclosure, but you’re potentially saving your bank thousands or more in legal fees by not forcing them to take your foreclosure to the end. In return, they may be willing to offer you incentives for a smoother “exit”. This is something you’ll have to negotiate with them. Again, just be sure you are clear on the legal and/or tax consequences.

Facing foreclosure in Hawaii or any other state sure isn’t fun. The current moratorium in force only affects non-judicials directly, but judicial foreclosures are still proceeding, so there’s no time to lose. Getting educated is the first step in moving forward in the best direction possible. Hopefully you’ve found the information here and in the last post informative and helpful. There are other sites out there as well, so take it all in and proceed in whatever direction you feel suits your situation and objectives the best.

Have you been down the foreclosure road already? Any insight to share as to what’s worked and what hasn’t? Share your experiences here!

Join the forum discussion on this post

Loan Modification — A loan modification is when your lender changes the terms of your mortgage, usually by lowering your interest rate. Homeowners are normally given a trial period to show the ability to make modified monthly payments for 3 to 6 months, after which the new plan stays in effect or they are rejected from the “loan mod”. Unfortunately, banks today have very little incentive to grant a successful loan mod. A colleague of mine and former REO broker recently informed me that banks make only about $500 per successful modification. Think that motivates them at all? Neither do I. This means the homeowners often find themselves back where they began. I’ve talked to people right here in Hawaii who went through THREE loan modification trials only to be rejected.

Short Sale – A short sale occurs when your bank or lender allows you to sell your property for less than the mortgage balance. In this situation, your lender is taking a ‘short’ position on the transaction, even if the sale itself could take 4 to 6 months or longer as your agent or short sale processor negotiates with the bank on your behalf to accept an offer. Short sales are a different breed of real estate transaction and are beyond the skill set (and patience!) of many professionals, whether agents or investors (I don’t mind them, though!). Ask any homeowners who’s attempted a Hawaii short sale, and they’ll likely tell you horror stories of being routed through 10 people at the call center and faxing in the same stack of paperwork, only to see it collapse at the last second because a BPO (broker price opinion) came in too high and the buyer left, or they were working with someone who didn’t understand the intricacies of a short sale. Make sure you work with a pro.

Forbearance — A forbearance occurs when your bank or lender takes your past due amount (arrearages) and rolls it into the current loan. This increases your monthly mortgage payment and/or extends the life of the mortgage. You’re not getting debt forgiveness — you’re essentially getting a form of loan modification or restructuring. A forbearance may reinstate your loan into good standing, although you may be putting lipstick on a big if you’re saving a mortgage you’re better off not keeping around for the next 20 years, like an adjustable rate mortgage (ARM) that was popular not too long ago.

Remember, just because you can save a house and mortgage doesn’t mean it’s best to do so. That’s a personal decision to make with your family (and your attorney and/or CPA) after weighing all your options.

Sell Your House (non-short sale) — This is really only an option if you have equity in your house, which is not the case for most Hawaii homeowners caught in the foreclosure process. However, if you have equity but just haven’t been able to keep up with your mortgage payments, then you may have the option of selling it outright with the help of a realtor or directly to a Hawaii real estate investor. Depending in your debt to equity ratio, you might even profit well from the sale. The primary advantage, however, is that you keep both a foreclosure and a short sale from your credit history.

Click here for “Options for Avoiding Foreclosure in Hawaii — Part 2“…..

Flipping Houses Just Got Easier

If you didn’t notice, the FHA just extended its anti-flipping waiver. That means it doesn’t matter how long the current owner has held the property if a buyer is using FHA financing. Those 90-day seasoning periods are gone for at least another year, so house flipping investors with capital should step up the plate because you just increased your buyers pool and reduced your holding costs. With the economy of the last few years, not everyone is a Cash Buyer (if you are, then get on this list!). Marketing to FHA buyers not only helps people get a new home but should also help the banks plow through their backlog of REO inventory.

The Hawaii Foreclosure Moratorium Backfires

I’m not saying I want this to happen, but I fear the intended objectives may not be attainable. I still get calls from people in foreclosure asking about their options because they’re getting taken through the judicial foreclosure process. Keeping someone in a pay-option ARM mortgage isn’t always the best decision for anyone, especially the homeowner. I know it’s a process that needs to take its course, but I’m skeptical. I’m wary that people in trouble before will be put right back in a situation of not being able to make their monthly payments and need foreclosure help all over again. Another downside to this is that it will clog up the banks’ property pipeline, likely delaying a Hawaii housing market rebound.

Landlords Line Up

There’s been a lot of talk lately about the “Nation of Renters” that’s headed our way and I think there’s a lot of truth to that. Investors are getting creative again in how they purchase and sell properties, and this includes the Lease Option. It’s no secret that Hawaii has some of the highest housing prices in the nation. As such, many people who’d like to buy simply can’t do so the conventional way, but a lease option gives them a way to get their foot in the door. What does that mean? It means landlords and cash flow investors should reach out to this group of buyers who will take better care of their place because they see themselves as the future owner and will pay a rent premium for that right. Until the economy comes around, it’s a specialized yet profitable niche.

Investors Will Step Back From Stocks

Ok, this may not be housing related, per se, but there’s a correlation, of course, between real estate prices and the stock market. The S&P 500 reportedly finished right where it started twelve months ago. Let me repeat that another way — the market gave out DIDDLY SQUAT for the entire year. When you consider that most people are taught that stocks and bonds are the only way to grow your portfolio, it’s outright depressing. A year wasted.

My friends over at New Direction IRA just reported phenomenal growth for another consecutive year in their Self-Directed IRA business (SDIRA). These financial instruments allow people to invest in much, much more than the stock market. You can invest in gold, silver, startups, and, yes, real estate. Flip houses, earn cash flow or grow at 12% or more as a private lender for real estate investors — all inside your IRA. With the growth reported, I predict that more and more people will step out from behind the tightly-controlled veil of commodities brokers and embrace the freedom of a Self-Directed IRA. Education is empowering.

Need another reason to watch out for the market? The next country in Europe to go belly up or Arab country to get overthrown or natural disaster in who-knows-what corner of the globe affects your return on investment. Scary, isn’t it? I agree.

One Giant Leap for Mike…

I also predict that my wonderful girlfriend Nanae will move here in early April from San Diego and start a very successful career as a Honolulu piano teacher (here’s her current site in SD). Know any kids needing lessons? Let me know!

That’s all I have on this Wednesday afternoon before I head over to the FAMES Hawaii monthly event at Dave and Buster’s. Let’s all keep a watch out in this first month for some signs of where the new year is taking us.

What Rebound??

Hopefully 2011 was a great year as you reflect on all that’s transpired the past 12 months. From a Hawaii housing and real estate perspective, two stories come to my mind that pretty much sum up the past year. First, the housing rebound that largely never came. There has been an increase in volume, but sales prices have not risen as expected and we can now expect more of the same in the coming year according to the latest stats and projections. Whereas 2012 was supposed to herald a return to more prosperous times, concerns over European economies, the unanticipated and still fragile Arab Spring and tight lending guidelines have all served to keep the national economy — and housing — flat, even with still low prices and record low mortgage rates.

Grind to a Halt

The other story is the moratorium on non-judical foreclosures signed by Governor Abercrombie in the summer of 2011. That has had a rippling effect throughout the local housing market, even if the signs aren’t yet clearly visible. It has undoubtedly increased the timeline on which the banks and lenders will get through their shadow inventory of already repossessed homes — the faucet has been reduced to a very slow drip. Instead of continuing to process the foreclosures and churning through their pile of properties to speed the arrival of a more normal Hawaii housing market, the public backlash from the robo-signing and other lending practice discrepancies has brought about a policy that will attempt to modify these loans instead and keep owners in their homes. Noble, but it remains to be seen how many successful modifications are made in lieu of foreclosure. The jury’s still out on this one and while opinions are decidedly split down the middle, it remains a significant hallmark of the past year nonetheless no matter it’s result.

We can always hope for a brighter 2012. Who knows what’s in store in the coming year??

So from my family to yours, thank you for your readership and continued interest in this site. Please give me feedback on what you’d like to see here and what you’d find valuable. I’m open to all suggestions!

MELE KALIKIMAKA!

From Michael Borger, Owner

These activists marched around the neighborhood with balloons, brass bands, vuvuzelas and all on the glorious day of the actual occupation. Yes, vuvuzelas, those annoying horns from the World Cup that apparently haven’t realized that they, too, are only welcome once every four years. The police gave them the necessary escort but didn’t escalate the situation by preventing access to the home that Bank of America still legally owns.

“Foreclose on banks, not people!”

The basic premise behind these “liberators”, as they are apparently calling themselves, is that they consider the foreclosure of the house itself to be illegal. “Foreclose on banks, not people!”, read their signs, and in light of the many allegations against the big banks over the past couple of years, it’s hard to find fault with that argument. No one is giving the banks a free pass here at all.

However, does that mean that we all just rise up and take over abandoned properties in our own neighborhoods and start sticking our homeless in them? No doubt we have a homeless problem here in Hawaii. From park closures to scheduled maintenance and cleanup, the homeless are getting shuffled around the islands like a bad Christmas present at a party. But it seems rather illegal as well to storm vacant properties and call them our own. You do it once, you get attention from local and national media for your housing cause. You do it again and again and inevitably the legal owner or police will get involved, especially when a homeless person is injured in one of these unsafe properties and sues the state.

How will it end?

No one would want to be homeless in a New York winter (or anywhere, of course), and on the surface it honestly is a shame that there are vacant properties that could at least provide shelter to people who need it. It’s also heartening to see a community come together so strongly for a cause they believe in. I just wonder how this is going to end — because it has to come to an end in some fashion. This family will not be living there illegally for the next ten years. Love BOA or hate BOA, but they won’t turn a blind eye forever.

What would happen if that same scene played out here in Hawaii? Should we occupy a foreclosed home in Kalihi? Kahului? Kona? Would the community support it or would they squash it before it got started? How do you feel about what’s transpired in Brooklyn? Are you all for it or have the “activists” gone too far?

Extra Feature

Ok, I promised something a little extra. I was recently introduced to a woman that has a very fascinating business. Lisa Simon is a Personal Historian. She interviews older people about their lives, captures it on video and then creates a DVD as a historical memento for the person’s family. How neat is that?? She’s seen people do this before in her previous home in Chicago but found that most people, while having the best of intentions, never got around to doing it until the opportunity was gone.  Lisa is also a member of the Association of Personal Historians. You can learn all about her very unique service at: http://www.remember-media.com/.

Aloha,
Mike

Join the forum discussion on this post

Walk This Way

Tonight I was standing along Waialae Avenue in Kaimuki for my neighborhood’s annual Christmas parade. I really love events like this because it reminds us that a lot happens at the local community level. There’s so much diversity within neighborhoods in Honolulu and other towns in Hawaii that it’s important to get out once in a while, meet the neighbors, see what new stores have opened, etc. But there’s one thing I’ve always wondered a bit about Kaimuki, and it usually comes to mind when I’m sitting in Big City Diner having a poached salmon and eggs breakfast (so good) and people-watching out the front windows (guilty). For every decent store or restaurant, there’s an empty office building. For every block that would promote people walking about, there’s a hard end at a gas station or other type establishment that kind of tells the brain: “Nothing more to see here. End of the line. Time to turn around.” I’m probably exaggerating, but Waialae Avenue seems to lack some continuity with regard to “walkability“. It feels “chunked up” to me. Is this a result of the economy? Zoning and planning? Lack of business development incentives? Or do I have it wrong altogether?

Imagine block after block of actually active stores, shops, etc. with people walking up and down the length of Waialae instead of just the same two or three blocks or so. I know, easier said than done, and I don’t have a plan of action. I’m just wishing. But standing there tonight on the street with all my neighbors made me think about the concept of “walkability” again. I think it’s so key to the vitality of an area, especially in a locale like Hawaii where the weather is pleasant year round.

It might sound simple — almost childish — to insinuate that promoting people walking around an area (versus driving to a predetermined restaurant and then leaving) could do wonders for revitalization, but I really think it’s true. It goes a long way in creating a true community and that, in turn, creates business which feeds the positive feedback cycle, reciprocal relationship or whatever you wish to call it. And where a vibrant business area grows, housing grows along with it. There are already fantastic establishments here and boatloads of potential – what can we do to see it to fruition?

Better sidewalks, getting more businesses in the empty spaces, etc. Regarding Kaimuki, I truly think continuity is a key — give people a reason to walk four more blocks down the street instead of just circling the same two blocks on the Koko Head Ave side. But this is certainly not restricted to my neighborhood — I’m not picking on Kaimuki, because I LOVE this area (can’t argue with the Movie Museum and Himalayan Kitchen). It’s just what I know best. Every neighborhood is, to some degree, “walkable” or “unwalkable”, in Hawaii and across America.

What about your community? Does it feature long stretches of stores and general commerce that promote people walking up and down the streets? Or do people drive in, do their shopping and whatnot, and turn around to go home? Does it have sidewalks that encourage an evening stroll? Storefronts close to the sidewalk or set far back behind parking lots? How does this impact your sense of community and what would you change if you had the power to do so? How important is walkability to you when shopping for a new home?

Be Heard Here – Voice Your Opinion Below!

I especially want to thank everyone who takes a few moments out of their day to visit hawaiihousingnews.com. I’m extremely grateful for your support and hope that I can deliver even more useful content for everyone as we head into 2012. If there’s anything at all you want to see covered here, please be sure to let me know.

Now go grab some turkey and enjoy this grandest of American holidays!

Mike

APEC is done and many are more than a bit ‘thankful’ for traffic to return to its normally sticky state. Driving 10mph through Honolulu is better than standing still, right? I was conveniently in San Diego (and Idyllwild – great mountain town!) last week, so I luckily missed all the craziness. Still, in hindsight it’s always nice to put our state on the world map. As a vacation hotspot, we can never have enough press.

2012 Economic Thoughts

Just last week KITV ran an article on some economic expectations for 2012. Now I’ll be upfront and say that I’m not an economist, but I found some good tidbits in there. Firstly, I think most people understand that the world is more global now than ever before. Yes, local economies are often heavily driven by local policies and activities, but we’re more intimately connected around the world now than ever before. That means that economic bailouts in Greece, Portugal, Italy and elsewhere in Europe can substantially impact your investments while shopping in Lahaina. The domino effect of this year’s “Arab Spring”, as the revolutionary efforts of Tunisia, Egypt, Yemen, Bahrain, Jordan and now Syria are termed, is a particular shocker for me, having once lived in the region (Tel Aviv). If Assad is overthrown in Syria, the fallout from regional uncertainty could ripple through your IRA while you’re hiking Waimea Canyon on Kauai or tending to your bromeliads in Hilo.

So while real estate is definitely driven by local markets, whether Hawaii or elsewhere, it’s definitely worth keeping your eye on world events. And yes, I know the news is often depressing and I’ve often considered a “news fast”, but “no man is an island” — even on an island (bad pun, I know).

Jobs (not Steve)

However, there’s some good news in there. You may or may not know, but the current Hawaii unemployment rate is one of the lowest in the nation, hovering around 6%. Compared to our mainland neighbors, that’s a promising number. The trick will be whether that sustains into the new year, but on the surface it is a possible signal of a potential housing rebound. The thinking is that the more people are working, the more income there is which leads to greater affordability of houses. Of course, there are always other factors at play but it’s something to at least keep our eyes on.

Visit Hawaii – PLEASE!

The other side of the Hawaii economy coin is almost always our travel industry. The same article points out a higher uptick in visitor numbers than expected. Right now, any growth at all is to be celebrated. We’re a luxury market, and it stands to reason that most people need to be financially secure in their own home and household before taking a vacation to Hawaii. You could call us a “secondary market”. Again, we can look to China and other promising economies to fill in the visitors gap of the mainland.

Again, here’s an opportunity to remind those of you who sell Hawaii real estate to look beyond the good ol’ USA for your buyers. China is HOT right now. If you don’t speak Chinese, there are countless resources here to hire or partner with someone to help get you hooked into the Chinese market. Of course, Japan, Korea and Canada remain great sources or international buyers. And of course, we have to hope that the collaboration of world leaders will provide benefits to us all into the future.

Turkey, Turkey

Turducken (duck in a chicken in a turkey) - it's delicious!

As I sit here writing this article in my favorite neighborhood coffee shop, Thanksgiving Day sits just 6 days away. This will be my 6th Thanksgiving in Hawaii and while I’d love to be with my family back in Pottstown, Pennsylvania, I’m happy to be able to celebrate it here with some great friends. I’m also thankful that I’m not responsible for preparing the turkey. I’m a fan of all things culinary — including people with better culinary skills than this guy here — so I’ll do my part, but I’ll leave the turkey to the others (don’t be this guy).

So to all you turkey chefs, what are your tips to preparing the best bird on the block? Is there a magic temperature or time for cooking that leads to no-fail perfection? Some secret glaze or do you use one of those ‘flavor injectors’? Any turducken cookers out there? Share your tips below…

A favorite investment vehicle for many of today’s Hawaii real estate investors is a Self-Directed IRA. You can use a SDIRA for private lending, to flip houses and to hold properties for cash flow. We’ve discussed it here before and it’s my pleasure to once again bring back Dan Falardeau of Entrust Hawaii for another Q&A:

Your SDIRA could flip a house like this!

Mike: Welcome back, Dan. Since we last spoke, there’s been a big shakeup in the Hawaii real estate scene. Governor Abercrombie recently signed into law a moratorium on non-judicial foreclosures. This is on top of the volatile market returns that still hover around net zero, the failure of record low mortgage rates to stimulate the economy and the new Occupy Wall Street movement that’s recently hit the streets. Have you seen any broad changes in the investment strategies of self-directed IRA holders the last few months? Are they moving into or out of real estate or has there not been much of a noticeable effect?

Dan: The most noticeable effects that I have seen are an increase in out-of-state Real Estate purchases and Precious Metals investments. Our clients have control over their retirement funds and make the decisions to invest in what they feel most comfortable in. The Occupy Wall Street movement has shown a light on how many Americans feel about the financial markets. Self-Directed IRAs can invest in assets that you choose. If you don’t like the Dow Jones, you can get out of stocks and mutual funds and invest in Koa trees on the Big Island or buy a rental property or many other green investments. You can know that in your own small way, your retirement investments are not adding to the greed of Wall Street.

Mike: No doubt the phrase ‘real estate’ has become somewhat polarized over the last few years, depending on whether you’re on the homeowner or the investor side of things. How do you feel real estate ranks in popularity against other investment types like precious metals or stocks for folks with self-directed IRAs? Is it a primary reason that people choose a SDIRA in the first place?

Dan: Real Estate is still the bulk of our business. There are so many different investments that our clients choose for their Self-Directed IRAs, but by far Real Estate is still the most popular. The Precious Metals markets are a close second. Gold and Silver are historically used to hedge losses in times of volatile markets and the world seems to be divided between those people that think Gold is over priced and a bubble about to burst and those who think it has never been this high and is going to continue to increase in price. If we only had a crystal ball…

How to Start a Self-Directed IRA

Mike: Ok let’s change gears slightly. If someone were to want to take charge of their own retirement instead of be handcuffed by the limited funds their current custodian offers, how would they start the process of converting to a self-directed IRA? Is it a simple rollover? Who do they initiate the transfer with, you or their current custodian?

Dan: It’s a 3 step process: Open an account, move the money over to your Self-Directed IRA and find the right investment. I’m here to help new clients with the application to open the account. The moving of funds from their current custodian is either a “transfer” if they have an IRA or a “rollover” if they have a 401k. Either way, there are not any tax or penalties in moving funds to their Self-Directed IRAs and we help with the transfers and rollovers. That step usually takes about 2 weeks. Then once the account is open and funded, the third step of finding the right investment is typically known ahead of time. Often new clients come to me with step 3 done in their minds and just need to get steps 1 & 2 taken care of to move forward with their investment plans.

Traditional or Roth Self-Directed IRA?

Mike: Does it matter if it’s a traditional or Roth IRA? Could someone convert from one to the other and would they convert before or after they rollover their funds?

Dan: Both traditional and Roth IRAs can be Self-Directed. Clients consider converting from a traditional to  a Roth for several reasons. It’s not a one size fits all answer to the question of “should I convert my traditional IRA to a Roth IRA?” I explain it this way to my clients. The traditional IRA is pretax and you get to deduct your annual contributions from your Adjusted Gross Income (AGI). This lowers your income on your taxes and may help you to pay less when you file your taxes. Then when you are retired, you will likely be in a lower tax bracket since you will not be making as much earned income as you were before you retired. You will pay tax on your distributions from your traditional IRA as you take money out to live on.

The Roth is the opposite. You already paid your taxes on this income so it does not lower your AGI, but since you already paid your taxes on that money it can grow tax free. The Roth is a great vehicle, but the one thing I have to remind our clients is that you either pay the taxes later with the traditional or now with the Roth. When you “convert” to a Roth, you pay the taxes that year.

Running a Business With Retirement Money??

Your New Retirement Plan? Just add poke and a SDIRA...

Mike: Here’s something I was wondering about the other day. Is it permissible to actually form and operate a business entirely owned by a self-directed IRA? Is that done very often here? I mean, could someone start a poi and poke lunch truck totally owned by their SDIRA as long as they’re not the ones pounding the taro or cutting the fish?

Dan: The short answer is Yes, and it is done all the time. Self-Directed IRAs can own businesses. You are not able to work for the company because you are a “disqualified person” from having direct relations with your retirement investments, so you couldn’t work at the lunch truck. You could, in your example, hire the manager and make the menu and prices, design the business model and what color the lunch truck would be. You still make the decisions, but you can not work or get paid. All the expenses and profits are in the name of the IRA because the business is owned by the IRA. This type of investment is often profitable because the client probably knows something about that business.

To use your example again, maybe the client is a fisherman and has been making poke for years and has some great recipes. Or maybe they already own one lunch truck and know how to operate a profitable business. They could use their IRA money and buy another lunch truck under a different business name owned by the IRA and then hire the manager and employees to run the business.

Mike: Let’s take that one step further. Without breaching any client confidentiality, of course, what’s the most creative, interesting or unique use of a SDIRA that you’ve seen? Let’s give our readers some ideas!

Dan: While I would like to share this with your readers, I need to protect our clients’ ideas. We don’t sell any products or give any investment advice, so the great ideas are out there and our clients know them when they see them. The nice thing about Self-Directed IRAs are that our clients are comfortable with their risk levels. They are the “Self” in “Self-Directed IRAs”.

Who needs a 401k? You've got Koa!

Maybe you’re a Realtor and know a good deal on an investment property when you see one. Maybe you’re a dentist and have been working with Silver for years and know that market. Maybe you have experience loaning money and making a profit on the interest. Maybe you see the value in Koa wood and think investing in timber is the right investment for you. Maybe you’re a world traveler and have intimate knowledge of foreign currency markets. Maybe you have owned a profitable business and think you could duplicate that success with a business owned by your IRA.

We believe that investing in what you know lowers the risk levels and raises the potential for profits, and our clients agree.

Mike: Ok, fantastic. In full disclosure to our audience, I have a self-directed IRA with Entrust Hawaii for Hawaii real estate investment purposes and am very pleased with the decision. If someone else wants to explore this opportunity, what’s the first step?

Dan: Call me at (808) 521-4472, email me, or go to our website. I’ll be glad to answer your questions and help you open your Self-Directed IRA.