Mainebiz

V O L . X X I N O. V I M A R C H 2 3 , 2 0 1 5 32 W E A LT H M A N A G E M E N T F O C U S and not themselves. ere are also detailed rules governing how they could use that asset, including who they could hire to do the rehab work or sell it to once that work was completed. Once the rehab work was com- pleted, the house went on the market and by mid-January it was under con- tract, with a closing set for late March. If all goes as expected, Poulin says, "We're expecting a $50,000 return on our investment." Even with some of the rehab head- aches they had to deal with, Poulin says she and her husband are convinced that investing the majority of their IRA money in real estate is what's best for them. "It's a great way to fi nance for someone who would like to fl ip a house," she says. "It's great for the community, because it puts a distressed property back [onto the market] at a greater value. It's been a great experience for us. I can't wait to do another one." Other non-traditional options Not every non-traditional investor will be as willing to take on the stress of being as hands-on with their real estate invest- ment as the Poulins, Bachelder says. For those wanting to invest their IRA funds in real estate, but who don't want to become a landlord of a rental property or a property manager overseeing a rehab for what they hope will be a quick fl ip, there are other options, she says. For example, working with Shawn Lyden, a principal of Portland-based Coastal Realty Capital LLC, Bachelder says she's able to off er clients the opportunity to invest their IRA funds in mortgage notes, secured by a speci- fi ed mortgage loan made by Lyden's fi rm that spells out the interest rate and repayment terms to the investor. "Ninety percent of the people who come to me to do non-traditional IRA investments in real estate want to be passive investors," she says. For Lyden, who got his start in the mortgage business in 1991, Bachelder's self-directed IRA clients represent an alternative source of capital to fund short-term real estate bridge loans that conventional lenders typically don't han- dle. Coastal Realty Capital was formed in 2010, he says, to fi ll that lending void. "We're a full-service lender," Lyden says, noting that two other affi liated fi rms, Maine Capital Mortgage and Realty Finance Co., provide traditional residential mortgage and commercial real estate loan services as well. "I look at Laurie's clientele as one of our lines of credit. It's a great business mar- riage, based on the needs of some of our clients for short-term bridge loans and the needs of some of Laurie's clients who want to invest their IRA money in real estate." Bachelder says Lyden's company provides her with underwriting pack- ages identifying prospective properties in need of capital, their appraisal val- ues, the borrowers' reasons for seek- ing a bridge loan and the repayment terms. She then provides that infor- mation to clients who want to invest in real estate. "Shawn never talks to my clients, I'm really the gatekeeper of the funds," she says. "My role is to fi gure out who might be a good fi t for a particular package." Both Lyden and Bachelder regard non-traditional IRA investments in real estate as a viable investment alter- native that benefi ts Maine by making capital available for local projects. "I think the trend is going to pick up," Lyden says. "It's going to have a big impact. e reason: It's a new source of funding." To which Bachelder adds: "It's untapped capital." J a m e s M c C a r t h y , M a i n e b i z s e n i o r w r i t e r , c a n b e r e a c h e d a t j m c c a r t h y @ m a i n e b i z . b i z 1 # We're Find out why Androscoggin Bank is the top lender for SBA 504 loans* in Maine at androscogginbank.com. Smarter Banking ™ 1.800.966.9172 • androscogginbank.com To find smarter solutions for your business needs, contact Dave Eldridge, SVP and Commercial Lending Manager at 207-376-3626 • deldridge@androscogginbank.com. *As ranked in dollars lent and units by the Small Business Administration for FY 2014. » C O N T I N U E D F RO M P R E V I O U S PA G E At a glance Laurie Bachelder, a principal at Freedom Wealth Advisors LLC, says options for non-traditional IRA investments are virtually limitless, so long as the asset is purchased for investment purposes only and does not constitute a prohibited transaction under federal rules, such as: ¡ Cannot buy from or sell to your- self, spouse, parents, children, spouse of a child, the IRA's cus- todian or trustee, a partnership of disqualifi ed parties. ¡ Cannot make personal use of the asset. ¡ Cannot use IRA as collateral for personal loan. ¡ Cannot be used to perform maintenance on the asset. She encourages her non-tra- ditional IRA clients to consider investing in assets they know and understand as a way of diversifying their retirement portfolios, but says, as in any investment, they should take the time to fully evaluate risks and likely returns.

• Cover