Wake Up to Wealth - Leveraging Your Retirement for Real Estate Success with Greg Herlean

Starting point is 00:00:00 This is Wake Up To Wealth, a podcast dedicated to helping you change the way you think about wealth. And now, here's your host, Brandon Brittingham. Hey, what's up, everybody? I am back with another episode of Wake Up to Wealth and extremely excited today. Got one of my homies and a business partner, extremely smart guy in the real estate investing space, Greg Herlene. How are you doing, buddy? I'm good, man. Thanks for having me, Brandon. Absolutely. I appreciate you being here today. And one of the things we're going to really dive

Starting point is 00:00:41 into today is we're going to talk a lot about a space that Greg is extremely knowledgeable, and that is leveraging your retirement accounts to invest in real estate. Thanks for having me, Brandon. Hey, man, thank you again for joining us. Myself, being a real estate investor and been in the game a long time, I got to admit this, like, I didn't really know about the self-directed and leveraging retirement accounts and things like that until recently. In fact, and I'm sure you can elaborate on this. Like when I talked to financial advisors or people were telling me it was a bad idea and it didn't make sense. Right. So, and I found out through you, right. And,

Starting point is 00:01:26 and actually learning that it's freaking great and it's a great tool. So like just kind of dispel some, this for us, like walk us through this, like how does it work and why is it a good idea? Well, look, it's, I fell into this by default as, as I can can appreciate as I listen and watch you, from that hustle mentality, you're just going to create success because you have to. There's no other option. That's how I was when I was 22, with the exception of, probably maybe similar to you, had no money, friends had no money, and banks wouldn't lend me money. And so for me, when I literally heard someone talk about this subject, about self-directing, most 22-year-olds at the time would be like, I'm not going to listen about self-directing IRAs. This is not my subject. I tuned in because I was like, wait, hold on. Somebody could lend their money, their IRA money, retirement money to me so I can go out and flip deals. So I learned that at 22, pure out of necessity because I couldn't get a loan. And so I learned very quickly about how

Starting point is 00:02:30 this concept works at a young age. And then ever since then, it's really been 15 years ago, I started a company that helps people do exactly that. But the prior 10 years of that, all I did was do real estate deals with either my IRA money or partner with other people's IRA money, friends and clients of mine to do real estate deals. And so look, the myth that I think the biggest thing that people, you know, it's interesting to me on this subject is only 4% of Americans actually self-direct, which means majority of people, which is over a hundred million people in the United States, don't self-direct and don't even know they can. And it's because their advisor doesn't want to teach them that. Why would someone want to teach you? You can move your money away from

Starting point is 00:03:14 them so they don't get paid a fee and put it in something that you know, like, and understand. And so that's probably one of the biggest problems is lack of knowledge, education, for obvious reasons, surprise, surprise, fees, commissions. And then I'd also say, I'm not one to say this is for everybody. There's a reason why there's less people that do it. Now, should it be more like 15% or 20% of people that do it? Probably, but not 100%. The people that don't want to do any due diligence, read about what they're going to invest in,

Starting point is 00:03:42 focus on it, do a little bit of underwriting. It's not for them. But for me, it was a complete life changer because I had no money and I had an IRA investor believe in me, partner with me on my first deal. And after doing that a few hundred times, I learned really quickly that I wanted to be the IRA investor lending. I wanted to be the guy that was lending me the money because he wasn't doing anything. He was passively collecting checks, not paying taxes. So anyways, that's the long answer to your question, but that's how I got into it. And it's also one of the issues that I see in America today. Yeah. So another thing that I think when you run into this subject is there's the fear of like, well, this sounds difficult. You know, I don't understand how to do this. Like, it sounds hard. Now, before I ever met you, right? Like, and I didn't know

Starting point is 00:04:31 how to do this. And we had ways for people to invest with us. I kind of learned how to do it before I had a resource like you. And so the first one I did, I didn't, you know, admittedly, I didn't really know what I was doing. And I was able to talk to their custodian, get the paperwork to them and figure it out. Now, it took me a couple of days because I had no freaking clue what I was doing, but it was not difficult. Right. Now, the custodians all made it difficult that I dealt with, but with you guys, that's not the case. So someone that's like hearing this, they're like, you know, you know, let's take a real world scenario. And this has happened multiple times. Someone calls me, Brandon, I want to get in one of your deals. That's passive. You know,

Starting point is 00:05:20 I want a targeted fixed return. But this sounds complicated, right? And I can take them to somebody like you and they can move it over to you guys at the custodian and then get into one of our investments. It sounds complicated, but it's not. Someone's listening to this. Could you walk them through how that works? Yeah. Look, first we set up about 150 to 200 new accounts every single month. So we've got a very seasoned team that's very good at this, that we hold your hand through the process. My competitors, and the reason why I got in this business, what they would do is they'd say, yes, all you got to do is go to our website,

Starting point is 00:05:57 fill up the application. Well, the application's got questions you've never even heard of. Right. So all of a sudden it's just, it's overwhelming. And so I have, I'm a, I'm old school. I'm a true believer when it's your retirement money, you've spent maybe decades on saving that we want to answer all your questions. We're going to make it smooth. So we do a 15, 20 minute phone call. That's it. Get your application filled out with you over the phone. Then we'll, it's emailed to you. So you get to review everything that you filled out. And then after that, that once you're okay with it, which takes 24 hours, you now have a self-directed account established with us within 24 hours. We then request your money to be sent from wherever it's at. If you have an old 401k from a previous

Starting point is 00:06:34 employer or an IRA or Roth traditional, any kind of IRA, we'll request them, your current custodian, to send the money to us on your behalf to then be put into your new self-directed traditional IRA or Roth IRA. That process of them releasing the money, as you've probably experienced, can take anywhere from seven to 15 days. But once they release the money, and now is establishing log online, you can see it in your self-directed account, which really the only thing that's different with us compared to them is you get to make your decisions on what you invest in. The rules are the same as far as how much you can contribute, how much you can take out as distributions. None of that's changed. The exception is you get to

Starting point is 00:07:14 choose your investments. Unlike right now, wherever you're at right now, a big powerhouse brokerage, Fidelity, Charles Schwab, they give you a list of options. Then they might ask you on a scale of one to 10, how conservative are you? Then all of a sudden, they just plug in what it should be, and that's it. You get to invest in things that are in your backyard, literally a deal you might want to do or with somebody like you, Brandon, in a fund very passively. People enjoy self-directing because they're sick of the ups and downs of the stock market. And that's typically what you get rid of is all the ups and downs and you invest in something

Starting point is 00:07:49 that you like. Could be businesses, could be Bitcoin, could be precious metals. 75% of our investors invest in some sort of real estate, probably because of my background. We're really good at real estate and we understand typically what someone's trying to accomplish when using their IRA and real estate. But lastly, to your point and your question, it's a simple process. Get your account established. Step number one takes 15 to 20 minutes. Get your money to roll over. We do all that work for you. It arrives within seven to 14 days. Once your money's in your account,

Starting point is 00:08:19 you then direct us with documentation. If you're going to invest in your fund brand and someone's going to do that, you guys have documentation. It'll just be titled in the name of their IRA. You submit that to us and we release the money via wire or check, however you say, to that investment. It's a simple process. When the profits and distributions get paid out, they go back into your IRA, which is the art of it. Now you're not paying taxes on any of those gains that goes back into your IRA. Yeah. So another thing too, right, is someone, let's just say they've got a decent amount in an IRA over here, right? They don't have to move the entire amount. They could take a portion and move it with you guys to have some diversification, correct? That's right. You can test it out. Put in $50,000 or if you got 100, throw in 50 in a self-directed.

Starting point is 00:09:11 Make your advisor kind of compete for it. I mean, that's what I did in the beginning. I was like, all right, well, I'm going to move some over here and see how I do against what you got. Yeah. Yeah. I think that's the cool thing. You mentioned also kind of the flexibility, right? So I'm not as versed in it as you, that's why I'm asking, but like someone can invest into like an actual real estate deal, right? It doesn't have to just be passive. They could go and correct me if I'm wrong, they could go buy a piece of real estate with this. Yeah. I mean, it's almost limitless. There's a few, it's almost limitless. It's easier for me to tell you what you can't do, which is you can't invest in your own vacation

Starting point is 00:09:51 property or home that you live in or you're going to use. But if you wanted to go and wholesale a deal, if you wanted to go buy an asset, a rental, buy and hold a rental with your IRA, you can do that. Let's say you wanted to buy a $200,000 rental. You can put down $100,000 from your IRA, you can do that. Let's say you wanted to buy a $200,000 rental. You can put down $100,000 from your IRA, excuse me, and then you can get a non-recourse loan for $100,000. There's banks that will lend to IRAs and you can leverage it. Oh, well with it. The IRA just can't guarantee it nor can you personally. But the point is, is you can flip, you can hold, you can wholesale, you can syndicate. You just can't be living or using a property that you're IRA investing. Yeah. So I think you kind of answered this already, but why do you think more people, why don't more people know about this? Why don't more people talk about this? Why is this not out

Starting point is 00:10:43 there for more people to know about? Because a lot of times when I bring this idea to someone, they've never heard of it and they freaking love it. They're like, wait, so you're telling me I can give you 50,000 to get into your deal. You're going to give me X, you know, targeted return based on, you know, where we think we're going to be. And I've never heard of this before until today, right? Which the investor's excited, they've just never been taught it. Well, and that's part of the hurdle that I and my company deals with because they think that some people, God bless them, think that I created this. I wish I did. The self-directing and the ability to do so came out in the mid-70s.

Starting point is 00:11:36 So it's 50 years old, basically. And so this is not something new. And so people haven't heard about this primarily because there's a lack of education and content and people, advisors will not teach you this. This is not this, you know, you talk about like, you want different results, but you're doing the same thing your parents and grandparents and great grandparents did. This is that like, if you just keep doing what they did, you're going to have the same results. And so I feel like this is something that came out in the 70s. Now I feel, I know this. I've now seen the wealthy take advantage of this. Look, the wealthy, they own the lobbying that's happening and the policies

Starting point is 00:12:13 that are being created, right? So they create these rules, the rich, the lobbyists, the government, they utilize these rules and they double down. I mean, look, I mean, when Mitt Romney was running for presidency, they talked about how big he amassed his retirement plan. It wasn't because he picked the right stock. He was investing in his own stuff. Peter Thiel, he put $5,000 in as a starter in his PayPal. When PayPal was a crazy idea, turned into a few hundred million dollars and will never pay taxes on it because he used a self-directed. The rich know these things. And that's partly why I'm a bit proud of what I've created. I feel like a little bit of Robin Hood here where I came from nothing, military back, my dad was in the military and my parents never got financial advice or pick this next stock or this is the next hot whatever. The middle class in general, and even

Starting point is 00:13:06 a lot of the richer upper class don't get advice and don't understand these rules. And so that's what we do. This is what's great is if you have $5,000 or $5 million with us, you can do this concept. And I think it got lost in translation a long time ago when all these advisors would learn about it, but not tell their clients. And I know there's some great advisors. I get texts every day, different referrals. And there's certain advisors that I love because they'll send me a message like, hey, look, my client, he's in the private club with them because he's got millions of dollars, wants to invest in real estate. I want him to open up an account with you to invest in real estate while he leaves his other money here in Morgan Stanley. Love that. That guy, he's not

Starting point is 00:13:50 afraid to help his client do what the client's trying to accomplish. Most advisors are afraid. They're afraid to lose all their dollars. And that's the wrong approach. And by the way, this is, like I said, there's over a hundred million IRAs. In the hundred million IRAs, something three or four million IRAs, there's over $7.2 trillion sitting in them. So I mean, the amount of money that's there to do different deals and the amount of opportunity is limitless, frankly. Yeah, no, no, absolutely. So you kind of answered this too, but for somebody that's listening to this, I mean, is this for anyone who has a retirement account? Can anyone who has a retirement account do this? So the quick answer is yes. Anyone that has a retirement account can self-direct. Now,

Starting point is 00:14:39 the only question mark that comes about is what type of retirement account? There are a few retirement accounts that you can't self-direct with. Meaning if you have a current 401k with your current employer or 403b or TSP, you work for the government, you have a pension plan that you currently are contributing to or work with, those plans you can't move over, not a portion of or all of. Once you leave or get let go, you can. And in fact, I would say half of America changed jobs in the last six years because of COVID and other changes. So most likely, if you're listening to this, you or someone you live with probably has an old 401k that doesn't really matter much, which I hate hearing that. Like, oh, it's only got $20,000. I hear like, oh, it only has 200,000 all the time. Like those little dollar

Starting point is 00:15:26 amounts, 10, 20,000 or 200,000 all matter. Pay attention to them. Start self-directing. You can do one deal with $20,000. So that too qualifies. If you have a traditional simple SEP, Roth, all those qualify, regardless if you're employed or not. You can self-correct those accounts. But if you have a 401k, a current 401k, that does not qualify. Got it. All right. So we, switching gears for a second, on the podcast, we always end the same way. And the show is called Waking Up to Wealth. I named it Waking Up to Wealth because the point behind it was to teach people about wealth, right? That maybe didn't get education like this, or didn't get advice like this. So I ask everybody at the end of every show,

Starting point is 00:16:13 and it's whatever your version is, what is waking up to wealth mean to you? Ironic, my answer, because it works very well with your question, what's waking up to wealth? Waking up to wealth to me is sleeping good at night. And believe it or not, I learned that the hard way, right? In 2008, we've all doubled down, pulled out all of our equity, got all this leverage. But my answer to waking up with wealth is making decisions financially that make you sleep good at night. And for me and for you, it could be different. And that's totally okay. But for me, when I get to see X amount in my boring bank account, which everyone says don't have money in your bank account, it makes me feel good at night.

Starting point is 00:16:58 And when I have X amount in my retirement account that's compounded, that makes me feel good rather than having a balance sheet that says I'm worth $100 million, but I have $80 million of debt. So for me, personally, it's about making financial decisions that make me sleep better at night. Got it. So what we're going to do is, obviously, Greg is a great resource. And if you're listening to this and you're like, man, you know, I want to get into this. I want to leverage this. I'm going to leverage the self-directed. At the end of the show, we're going to post the link of how you can get in touch with Greg and Greg's team. Then I would suggest he puts all kinds of really good information out there on Instagram.

Starting point is 00:17:39 Where can they find you on Instagram? Just my name, Greg Herling. There's no others. Got it. Yeah. Follow him. Pay attention to some of the stuff that he drops because he drops education around this. And we'll get you guys a link to get directly to Greg and his team. And they'll know that you came from the show because we're going to give you a special link. And hey, man, I just wanted to say, I know you're a busy guy. You got a lot going on. I appreciate you taking the time coming on the show and talking to my audience today.

Starting point is 00:18:07 Thank you, brother. Thank you. Thanks for having me. I appreciate you. Thanks so much for tuning into this episode of Wake Up To Wealth. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts.

Starting point is 00:18:24 This way you'll get updates as new episodes become available. And if you feel so inclined, please leave us a review on Apple Podcast and tell your friends about the show. It is how new people find us. Until next time.

Wake Up to Wealth - Leveraging Your Retirement for Real Estate Success with Greg Herlean

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