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W W W. M A I N E B I Z . B I Z 31 M A R C H 2 3 , 2 0 1 5 of Portland-based Freedom Wealth Advisors who specializes in self-directed IRAs, as the family's investment advisor. "I would never do it any other way," says Poulin. " e IRS is looking at this stuff very closely and is very, very clear, there's no wiggle room if you make a mistake." Poulin says she and her husband switched all of the money from a tra- ditional IRA, featuring the typical mix of mutual funds, stocks and bonds, to a Self-Directed Retirement Account man- aged by Bachelder's company that would enable them to make non-traditional investments, in addition to keeping some of their money in mutual funds. In doing so, they've joined a small but growing group of investors that now holds 2%, or $94 billion, in SDRAs, within the overall $4.7 trillion IRA market, according to a 2011 report by Investment Company Institute, the national association of investment companies. "We both know real estate and feel more comfortable investing our money in it than in the stock market," Poulin says. Freedom of choice Bachelder launched her fee-only reg- istered investment advisor fi rm about three years ago, bringing to that ven- ture 16 years of experience managing traditional IRA funds. She became aware of SDRAs about eight years ago, when she and her hus- band started investing in real estate. It was a bit of a surprise, she admits, to learn that real estate had always been an option since Congress created IRAs as a self-directed retirement plan using tax-deferred investments in a wide array of assets. She wondered why there wasn't wider knowledge about it, spent more than a year learning all the rules and regulations governing SDRAs and eventually decided that there was a business opportunity for her to become a specialist in non-traditional self- directed retirement investing. "It's not something you can dabble in," she says. "You either do it full force, or you don't do it at all. It's not for everybody." First and foremost, she says, her goal is to educate people about the original intent of the IRA legislation, which she says largely has been lost over the past 40 years due to most fi nancial institu- tions and advisors only off ering tradi- tional investment options to clients. In fact, she says, federal rules allow IRAs to be invested in a number of non- traditional options that can diversify the retirement portfolio and make it less vulnerable when the stock market falls dramatically, as it did in 2008. "It's a way to mitigate risk," Bachelder says. "A lot of my clients want diversity. Some people don't want to go into the stock market at all. A lot don't understand it and they don't like the feeling of not having any control over it. But they may know something about real estate and when they learn of this and realize they have an option to invest their IRA in real estate, it gets them thinking. e appeal of real estate is that it's tangible. Every decision you make about it is tangible." Making knowledgable investments Bachelder's clients, Autumn and Tom Poulin, are non-traditional IRA investors who know and understand real estate: ey purchased their fi rst duplex in 1998 and owned and managed investment properties across the state before moving back to Autumn's hometown of Wells in 2004. Once they realized they could use their IRA funds to invest in real estate, Autumn Poulin says, they began looking for a suitable investment properties. Poulin says she and her husband focused on southern Maine commu- nities that she knew well as a Realtor, eventually fi nding a distressed fi ve- bedroom, two-bathroom house in West Kennebunk that was listed as a "short sale" property. e house was in what she describes as a "very nice neighborhood" and was structurally sound, but its inte- rior was in bad shape. It hadn't been fore- closed, she says, but the owner had listed it for less than its mortgage value largely because it would require extensive reno- vations to make it usable for a family. "It was very, very sturdy, but the interior basically was trashed," she says. She and her husband calculated the likely cost of the rehab work, deter- mined that comparable sales of homes in that neighborhood were in the $350,000 to $400,000 range, and made an off er of $170,000 using money from the SDRA trust fund that Bachelder had created for them in order to make non-traditional investments. " ere were 11 off ers on it," Poulin says. "But the great thing about using our IRA money is that we could come in as a cash buyer, which made our $170,000 off er more attractive." Even so, she adds, because it was a short sale, the process even for a cash sale was "very, very long" — about four months. An important distinction under the IRS rules for non-traditional IRA investments is that once the Poulins closed on the house sale last August, ownership is held by their IRA trust CORPORATE FINANCE ASSOCIATES Securities Oered Through Corporate Finance Securities, Inc. Member FINRA/SIPC • cfaw.com/portland/ Wealth Management Is a Team Sport It takes time and many players to build success. Managing that success and providing for your future requires a team. At Corporate Finance Associates we partner with wealth managers by focusing on what creates value in your business, and by preparing you for a timely and successful business exit. We'll work with you and your advisors to: We're team players. Give us a call at 207.772.4496 or contact online at cfaw.com/portland/ • Plan your business exit strategy • Manage your sales process to completion • Understand your business goals • Maximize your business value nhdlaw.com • Portland (207) 774-7000 • Lewiston (207) 777-5200 When it comes to legal issues for your business—or personal life— you can trust in our expertise, experience, and results-oriented focus. • Estate Planning • Commercial Litigation • Corporate Law • Intellectual Property • Real Estate Law • Tax Planning Prepared. BE C O N T I N U E D O N F O L L OW I N G PA G E »

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