Medicaid Insurance – Affordable Health Care

When you are looking for health care that you can afford, you are probably going to start by looking at some of the basic plans offered by the major carriers. If you don’t have special health care needs, then this can sometimes be the gateway to a good and reliable health care plan. If you do still have trouble paying for your health insurance, even when you have the cheapest plan, then you will still want to consider some other options. One of the most popular options in the country for people who are in one of the lower income brackets is Medicaid insurance. This is a state funded program for people who are having trouble making ends meet. There are also a number of other options that you have when it comes to affordable insurance.First, let’s explore what really works about Medicaid insurance. The first wonderful thing about this kind of insurance is that it is designed to give health care to people who do not make a lot of money. Since health care is so expensive, this program is really expensive for keeping people don’t have a lot of money healthy. Another great thing about this program is that it allows people to take care of all of their health needs. They are able to see specialists when they need to. They are also able to get special equipment with this kind of insurance, such as crutches or asthma inhalers.The downside of Medicaid insurance has to do with flexibility. Many people who use this kind of insurance complain that there is not enough flexibility when it comes to which doctors or specialists you can go to. When it comes to finding a doctor in your area, you will find that this kind of state funded program does not necessarily do the best job. Also, many people who use this program have complained that it is hard to find help when it comes to setting up appointments with specialists.Instead of looking at only Medicaid insurance, you may want to consider some other options. A good way to look for other affordable health insurance options is on a free quote page on the internet. You can find some free quotes from all of the major carriers and also get the most competitive rates on the market. This is the smartest way to make the best decisions when it comes to getting affordable health insurance.

How to Invest in Commercial Real Estate With Self-Directed IRA Funds

Sunny Doe has been working as an Engineer in the Bay Area for more than 15 years. Over the years, he contributed to his company’s 401K plan and has accumulated over $350K in his IRA rollover account. While it is very convenient to invest in the stock market, he notices that the returns on the mutual funds in his IRA account are under-performing. As he grows older, Sunny faces the reality that his gray hair is not his asset but could be a liability in the high-tech field. He is also concerned about the volatility of the stock market. On a day the market is doing well, Sunny enjoys checking the balance of his account several times. On a bad day, he feels discouraged and questions the investment choices made. In addition, Sunny also wants to diversify his investments as most of it has been placed in the stock market.After learning that he can use money from a self-directed IRA to invest in real estate, he is motivated since he has been successful in real estate investments where he has more comfort and control. Learning that 44% of net worth per capita in the US is in real estate, he knows he is in the right direction. Upon further research, he discovers that money from a self-directed IRA account can be used as a down payment.What is a self-directed IRA?In 1974, Congress enacted The Employee Retirement Income Security Act (ERISA) which established IRA’s to give us the freedom to make our own Individual Retirement Arrangement or IRA. ERISA allows you to open an IRA account and control the investment of your money. It did not state that you have to invest in stocks, bonds, or mutual funds. Most IRA companies choose to focus on stocks and mutual funds because it makes good business sense for them. It’s like McDonald’s focuses on fast foods and does not serve prime rib. So if you want to have more investment choices besides stocks and mutual funds, you have to use a service of a self-directed IRA company. Once you open a self-directed IRA account, you can use the money to invest in stocks, bonds, mutual funds, real estate, mortgage notes, businesses, precious metals and other assets.Self-directed IRA CompaniesBelow are some of the companies that offer self-directed IRA accounts. The author does not endorse any companies.

Equity Trust Company, (440) 323-5491.

IRA Trust Services, (650) 593-2221.

Pensco Trust, (866) 818-4472.
When you contact these companies for information about their fees, they normally provide a service menu and associated fees. Some are based on the size of the assets and/or the number of assets, some are based on the services you need.There are 3 kinds of self-directed IRA companies. You need to know this to understand how they operate.

Custodian: this company holds the assets on your behalf and executes your instructions. It is normally a bank or entity approved by the IRS to hold the self-directed IRA assets.

Trustee: this company just holds the self-directed IRA assets. It’s normally a bank.

Administrator: this company just does the paper work. It normally works with a trustee or a division of a bank.
What are some prohibited transactions or restrictions of a self-directed IRA?

You are not permitted to buy or sell a property between your IRA account and yourself, or your spouse, or your direct ascendants or descendant.

An IRA owner is not permitted to commingle self-directed IRA funds with his personal funds. However, the IRS allows an IRA owner to use personal funds to pay for incidental fees, e.g. closing costs.

The IRS precludes any personal guarantee for the loan and treats the violation the same as a withdraw from IRA account. Most commercial loans require personal guaranty. And so financing is the major challenge. Non-recourse commercial loans in which the property itself is the only collateral do not require this personal guarantee. However, it is difficult to apply for a non-recourse loan. In addition, most non-recourse commercial lenders are not familiar with loaning money to a self-directed IRA account as the borrowing entity. So they are somewhat hesitant in lending money especially when the self-directed IRA account is the only borrowing entity of the property. The so-called self-directed IRA and hard-money lenders that do not require the personal guarantees literally charge “an arm and a leg”, e.g. 8% to 12% interest for the loan. So, getting financing at a low rate seems to be the trickiest part.
Financing for Properties with self-directed IRA Funds Sunny has several financing options:

Buy in cash: This is the easiest and most straight-forward way to invest with fund from a self-directed IRA. However, this puts a major restriction on size of his investment properties. Besides, Sunny loves the idea of using someone else’s money to make money.

Get seller to finance: This may work out. However, most sellers prefer to get cash for their properties. The seller who agrees to provide financing probably had a problem selling the property. If so, there may be something wrong with the property.

Borrow money from a “self-directed IRA” or hard-money lender: These lenders charge very high interest rates, 8% to 12%. Sunny has a major problem with this kind of interest rate. The banks will end up keeping all of the profits!

Apply for a non-recourse loan: It’s fairly hard to qualify for a non-recourse loan as lenders tend to have very strict guidelines, for example:
· The borrower must be an experienced commercial real estate investor with high net worth and stellar credit history. And so Sunny wants to work with a local lender who knows him well.· The property has to have long term lease with a national tenant, e.g. Walgreens.· The property is in good condition and at a good location.· The loan amount has be large, e.g. at least $1MM.

Invest together with other investors: Sunny buys a commercial retail property together with other investors. All the co-owners apply for one loan. As long as he owns less than 20% of the property (this limit is set by individual lender), the lender does not require him to provide loan application and sign any guarantee. This will satisfy the IRS restriction on personal guarantees. Sunny pays the lowest interest rate and can maximize leverage in the best properties. This is the best option for self-directed IRA investors as they co-own a better property at the lowest interest rate.
Income Tax: Assuming Sunny deposits 30% and borrows 70% of the money to buy the property, then 30% of the income will be taxed deferred. This cash flow will go back to his self-directed IRA account. The other 70% of the income attributable to the debt is subject to income tax called Unrelated Business Income Tax or UBIT tax at the trust rate. All of the rental expenses and depreciation are deductible from income. In addition, the first $1,000 of income is exempt from UBIT tax. When the property is sold, the IRA may avoid UBIT and capital gains tax if the debt had been paid off by principal payment at least one year before the sale.Title to the propertyHis self-directed IRA account, not Sunny Doe, must be on title to the property. For example if he has a self-directed IRA account with Pensco Trust, he must take title as “Pensco Trust FBO (For the Benefit Of) Sunny Doe’s IRA Account”. Pensco Trust will sign all the real estate and loan documents on Sunny’s behalf as trustee of his account at close of escrow. Sunny applies for a tax ID from the IRS website for this entity after close of escrow for income taxes filing.Possible Investment ScenarioSunny invests with his brother in a $2M single-tenant dialysis center on a 10 years NNN lease with a net operating income of $150,000 (cap rate of 7.5%). They form a Limited Liability Company (LLC) to take title to the property. The LLC operating agreement specifies that his brother owns 80% and Pensco Trust FBO Sunny Doe’s IRA Account owns 20% of the property. With this arrangement, they apply for $1.4M (70% LTV) loan with a national lender and use a total of $600,000 for a down payment. $120,000 of this $600,000 comes from Sunny’s IRA account since it owns 20%. Since Sunny’s share is 20% initially, only Sunny’s brother has to apply for the loan and provides lender with financial documents. The bank also requires Sunny’s brother to sign a personal guaranty; hence Sunny is not obligated to sign a personal guaranty which in turn complies with IRS requirements.

Small Business Struggling? Take a Pill, Dude!

Is your small business struggling in this recession economy? No problem. Very soon you will be able to pop a pill and rewire your brain so you think like the most successful entrepreneurs in the world. Imagine popping a pill and suddenly having Robert Kiyosaki or Guy Kawasaki in your brain. You’ll think like a business guru-no joke! Cambridge University scientists have announced that there may someday be an “entrepreneur pill” that will help people replicate the brain chemistry of the most successful small business owners. Would that be better business through chemistry?In the Meantime …Unfortunately the entrepreneur pill isn’t available quite yet. The bad news is that small business owners need it more than ever. Shrinking profits and dwindling customer traffic have many small business owners pulling their hair out. Luckily, they can take steps to gain a fresh perspective on their business, even if they can’t yet directly access the brain chemistry of small business guru.If your small business is struggling, here are five ways you get a fresh perspective on your small business.1. Give Your Business a MakeoverTo give your small business a makeover you need new ideas and help from some experts. While you may not be able to afford the pricey consultants who do makeovers on major corporations, you can benefit from their advice without paying a dime. Check out Small Business Makeover section on the CNNMoney website. There you’ll find makeover case studies on all kinds of small businesses from carpet-sellers to bath-and-body stores. If you’re offering your products or services online, you’ll be delighted with their Website Makeover section.2. Get Your Burning Questions AnsweredIf you want to get a direct answer to the burning questions you have about your small business, you can always submit it to the CNNMoney directly through their “Find Business Answers” form. There is no guarantee that your question will be selected to be answered, but there’s definitely no harm in trying. As a bonus, it still doesn’t cost you’re a dime. CNNMoney usually puts this form at the bottom of its articles. To locate one of these articles just Google for CNNMoney + “find business answers.”3. Access Online Training from the SBAThe Small Business Administration has recently begun offering a number of online courses on “Surviving in a Down Economy.” The new courses include:- Strategic Marketing: How to Win Customers in a Slowing Economy
- Down-Shifting in a Slowing Economy: Business Planning Guide
- Raise new capital / Refinance exisiting debt – How to Prepare a Loan Package
- Diversify with federal contracts – Business Opportunities: A Guide to Winning Federal Contracts4. Look for a Geographic CureIf you run a bricks-and-mortar business maybe you’re not located in the right place. To locate your business at the right place at the right time, check out the top 100 places to live and launch a small business by Fortune Small Business. These include the 7 tax-free havens for business (Wyoming, Nevada, Florida, Texas, Washington, New Hampshire and Tennessee) plus the six best towns where technology thrives (Bellevue, Portland, Boise, Blacksburg, Bethlehem, and Folsom). The list is nearly endless and may help you decide if it’s time to move your small business because the grass is greener on the other side of the state line.5. SCORE BigSCORE is a non-profit group of 11,200 retired executives who mentor small business owners across the country for free. According to their website, “SCORE offers free and confidential advice to small businesses: face-to-face counseling, online counseling, online workshops and more.” You can post your questions to their website and get an answer, usually within 48 hours. Best of all, SCORE is an unlimited resource. You can ask as many questions as you want plus access their huge library of small business resources.So what’s the bottom line for small business owners? While you may occasionally feel hopeless you are definitely not helpless. This list is just the tip of the iceberg in terms of the inexpensive resources at your disposable to keep your small business afloat. So until that entrepreneur pill hits the market, get going and get help.Have you been using any other small business resources that have proven very successful for you? I’d love to hear about them!