Detroit "No SDIRA" City
35:30 · 2019
In this episode, we’re going to be discussing a little bit about Detroit, Michigan and some of the changes that are taking place there. It sprung up from a conversation I had and working with a couple of our students to get a couple of deals closed in Detroit Rock City as we say. Detroit’s been a hot market in the last few years because of a couple of things: lots of inventory, price points are still cheaper and values are rebounding strong. Detroit itself has at least a double-digit appreciation over the last few years just because of its affordability for one thing. There are still a lot of troubles going on in that neck of the country as well. Especially Detroit’s got a lot of blight in different parts of it. You’ve got a lot of economic development going into it with the new Gordie Howe Bridge. You’ve got the gentleman from the Cleveland Cavaliers putting in a lot of money in developing downtown Detroit. It’s really nice to see.
There are issues with the city that are still lugging around. The city has been on the verge of bankruptcy for the last number of years. The city is trying to get aggressive in their outreach for taxes and fines and things like that because they just don’t have the money to operate for the most part. An interesting story took place and it’s something relatively new. We had a couple of students getting ready to buy a couple of performing contract for deeds in Detroit and they were going to be using their own self-directed IRA to fund. They sign the contract, they get ready to fund, they send in the paperwork to their self-directed IRA quest. In this case, it’s Quest IRA and Quest informed them that they would not be approving the transaction. It was surprising like, “This is my investment. You can’t tell me yes or no on the investment. I’ve done the due diligence. I want to use my money to fund this.” Unfortunately, some crazy things are going on in with the City of Detroit. They are smoking a lot of cracks over there in a couple of ways. They said they’re getting aggressive on the outreach to try to collect on taxes and things like that.
I had a long conversation with my buddy Derek Long and Nate Hare. What’s funny is that Nate texted me about two hours before I called them to find this out to discuss the specific deal with, which I love it. They’re like, “There’s an issue we want to reach out to you and give you the way to fix it.” I was like, “Awesome.” I hear from the student, “Quest is not going to fund this deal. What would we do now?” I’m like, “Let me call Quest and find out.” I get on the phone and here’s what’s going on. When you buy a note and you’re funding it with your IRA, how does it get recorded at the county? If you’re using Quest Trust, it’s either “The Quest Trust Inc. For the benefit of Scott Carson, IRA number 1234567” or it will say “Quest Trust Company for the benefit of IRA number 1234567.” What is happening, there are investors that are buying assets in their IRA. It’s not just Quest, but other trustees. They’re not following through and they’re not paying taxes. The City of Detroit is now reaching out and suing the self-directed IRA custodians. It’s happening all across the country. It’s just not happening to Quest. It’s happening to other people out there and other entities out there as well.
As I was talking with Nate Hare, he was saying, “Quest has been sued several times by this city even though it’s not our deal. It’s an investor’s dea
Genre: KNOWLEDGE LINK