Investors FAQ

How do I set up the Self-Directed IRA?
There are several companies who specialize in this area. We can put you into contact with a company in our area that has been in business since 1974, providing services to individuals, and the financial services industry, with over 120,000 current clients. There are several others.
How is the Promissory Note investment titled?
Since the IRA owns the investment, it is titled as follows:
“(IRA custodian company name) custodian FBO (your name) IRA“
How is the Promissory Note secured?
Anything that is of value to you can be secured with a note, such as real estate property.
Can an SEP (Simplified Employee Pension plan) and a 401(k) be used
similarly as an IRA?
Both of these types of retirement plans can be used as a method of self-directing your retirement funds into qualified investments. Please consult your tax accountant or investment custodian for specific rules.
How much time will it take to be involved with transactions as they are required?
The time commitment for you as a lender is somewhat up to you. If you wish, you can have your custodian, or someone else acting upon your behalf, sign and approve most of the transactions as they occur. You should speak to your custodian to understand what is required and what your options are.
Why haven’t I heard of a Self-Directed IRA before?
While the concept of investing in real estate and other assets in retirement plans has been around for more than 30 years, it hasn’t received a great deal of attention.Why? Most custodians that offer IRAs (banks and brokerage firms) focus on mutual funds and CDs — because they have vested financial interests in having you select those investments from them.Because the majority of custodians focus on stocks and CDs there is a misperception that these are your only investment options for retirement plans. But this is not the case.
How can I be sure that my investment is allowable in an IRA?
IRS Publication 590 states what investments are prohibited in IRAs; these investments include artwork, stamps, rugs, antiques and gems. All other investments, including stocks, bonds, mutual funds, real estate, promissory notes, foreclosures, and tax liens are acceptable as long as IRS rules governing retirement plans are followed.
Are there special rules for self directed IRA investments?
Yes. To ensure compliance, you should be familiar with specific rules for IRAs, and in particular, self directed IRAs. There are certain types of transactions that you cannot perform through an IRA. Most importantly, the IRS prohibits “self-dealing,” investments in which you or family members of lineal descent have prior ownership.
Are my-self directed IRA investments guaranteed?
No investment (aside from FDIC-insured deposits) is guaranteed. However, most successful investors feel that the risk of investing in assets they know and understand is much less than the risk associated with making only conventional IRA investments.
What type of return should I be able to expect from my investment?
If you invest the same amount of money with JEM Real Estate Partners, Inc., you should average between 8% – 14%, depending upon the type of lien position your investment will put you in. If you average 11%, that same $50,000 will net you $141,971 in the same 10 year period. As you can see, your expectations are MUCH higher and safer because you KNOW where your money is invested!
What options will I have to place my investments in?
Currently, we are placing real estate investments into fully funding the purchase and rehabilitation costs (1st lien position), as well as gap funding deals where the developer needs additional funding (2nd lien position). We have plans in place to offer investments into a High Yield Real Estate Fund, which will be an LLC owned by the investors, offering a steady 8% return on investment. These funds will be managed by a JEM Real Estate Partners, Inc. and invested into properties at the 1st lien position. Returns will be provided on a monthly basis back to you. You can choose to reinvest these profits, or return them to the account the investment came from, or any other account. Please be aware of the tax implications of these earnings.We also have plans to offer other types of Real Estate Funds in the future in which you can invest that will have different expected returns. For example, we plan to continue the gap funding of deals and assume 2nd lien position for a higher rate of return. We have established funds that will be blended together as well in order to diversify your portfolio and spread out the risk, as market conditions fluctuate in the future. As you can see, there will be many options from which to choose.