Young Smart Money Transcripts: How To Invest In Real Estate Using Your Retirement Account (Self-Directed IRAs)

Please enjoy this transcript of my interview with Executive VP of Business Development and Marketing, Dan Kryzanowski.

Meet Dan Kryzanowski

Revenue-driving executive with a gritty, empathic “entrepreneurial mindset” responsible for leading new initiatives, partners, and teams across the US and globally to produce significant revenue wins in the IOT and physical worlds:

è  15 Yrs.+ Client-Facing Leadership (EVP of Business Development & Marketing, Head of Account Management). Real Estate, FinTech, Enterprise Software (SaaS / PaaS / FaaS).

è 10 Yrs. Commercial Leadership at GE Capital & Merrill Lynch (NPS / VOC / SWAPS).

è 5 Yrs. of FinTech (FT), Investor / Banking software sales & retention in Austin.

è 3 Major Turnarounds and GTM of Post-Acquisition business units (Increased Valuation 9-figures)

è 2 Languages (Spanish, English), 2 Universities (Wharton, Thunderbird), 2 Certifications (PMP, TSSB Finder).

Niche Expertise and Personal Interests:

✔ Investor, mentor, and speaker/author/podcast guest across the Family Office, FinTech and Real Estate communities: 100+ events/articles/interviews in 2019

✔ Niche expertise in Alternative Investments, Checkbook Control Self-Directed accounts (SDIRA, Solo 401(k), and Self-Storage: $100,000,000+ assets transferred

✔ Volunteer with HOBY (Hugh O’Brian Youth), empowering thousands of high school sophomores to develop leadership skills and embrace real world experiences in a collaborative, open environment: 1,000+ Ambassadors since 2011

Listen to the episode on Apple PodcastsSpotifyStitcherCastboxGoogle Podcasts, or on your favorite podcast platform.

Dan Kryzanowski
We kind of went through that and then you know, the big wild moment for me is he said Did you know you can use your retirement dollars? And for me this just it’s kind of a, you know, the C part and I was like, wow, this. This is amazing.

Apple Crider
You’re listening to young Smart Money podcast that inspires young entrepreneurs to take their personal finances to the next level. My name is Apple Crider, and I am a huge personal finance nerd and entrepreneur who’s constantly looking for a better way. Whether it’s amassing millions of credit card points, learning which parts of the tax code can work to your advantage or just figuring out how to run your business as smart as possible. I am all about it. Join me as I sit down with some of the smartest financial planners and specialists for young entrepreneurs out there and extract the action steps you need to get the most bang for your buck from your business. Welcome back to the show. If you have been listening to noon for a while, you will know that the words Roth IRA, you put those two words together, I am just jazzed up already. So whenever I get the chance to talk about Roth IRAs, I’m always hopping right on in. So today we’re talking about not specifically Roth IRAs, but self directed IRAs. So Dan Christian auskey. He is a friend of mine, we met at the fin con conference last year in DC, and he is the Executive Vice President for a company called rocket dollar. And basically what rocket dollar does is they are a company for self directed retirement accounts. So specifically, we’re gonna be talking about self directed IRAs. So as you guys know, an IRA individual retirement account, it’s a type of investing account that the government is going to country some tax breaks for, because they want to incentivize you to save for retirement so that they are not going to be on the hook for that so that you will be responsible for your own retirement. So within an IRA traditionally, and within the IRAs that I personally have set up, I’m pretty limited in the scope. Things that I can invest in. So it’s really just stocks, bonds, mutual funds, ETFs. And that’s pretty much it, or I can just keep it in cash. So that’s, that’s pretty limited in the grand scheme of things. Now, what self directed IRAs allow you to do. And what Dan is going to kind of fill us in on is how you can then use your IRA to instead of just investing in stocks, bonds, ETFs, mutual funds, whatever, which there’s no problem with that. I’ve been doing that for a couple years now. And I’m pretty satisfied. But if you do want to invest in alternative asset classes, think like real estate, or hard money lending, or all of these other different options that you don’t necessarily have the opportunity to invest in with a standard cookie cutter IRA. Dan is going to be talking about how you can get outside of that kind of cookie cutter mold and start taking more control of your Roth IRA. He calls it checkbook control, that’s kind of what it’s called. But basically, it’s as easy as writing a cheque. You can use the money in your IRA, whether it’s Roth or Traditional to invest in any number of asset classes outside of the traditional things that are going to be offered by your Vanguard, your Schwab, your fidelity in that kind of IRA package. So I’m super excited to dive into this. This isn’t an area that I have any experience in because obviously I have I don’t have a self directed IRA at the moment, I’m going to actually be moving into some more advanced retirement account options throughout this year for my business. And so I might go down the self directed route, I might not, I’ll keep you guys in the loop with what I decided there. But I’m super I’m always jets talk about retirement accounts. And Dan’s got a ton of really valuable knowledge here. He’s been doing really cool stuff with his self directed accounts. He’s got a ton of really cool stories from clients that he’s worked with as well. So I’m stoked to dive into this. I took a lot out of this conversation, and I’m very confident you will as well I tried to slow down down a couple times because at points like he knows a lot about this stuff. So he dives in kind of deep, so I didn’t want to I didn’t want the vocabulary to scare anybody away. I tried to pull him back out a couple times just to make things as accessible as possible. So sit back, relax and enjoy the episode. All right, Dan, welcome to young smart money. How are you doing today?

Dan Kryzanowski
Apple, great to be here, my friend and super excited to be speaking to your audience today.

Apple Crider
Yeah, I’m stoked to chat it up. So we’re talking about something that I have a ton of interest in. I’m a huge personal finance Nerdist audience knows, especially when it comes to retirement. So I’m super stoked to dive into this. Before before we do I mean, we’re gonna be talking about self directed retirement accounts. But I want to give you the opportunity because I’m always talking about retirement. I know I have a younger listener base. So they’re not always as receptive. But I think I think it’s good to hear from different perspectives when it comes to like why thinking about retirement is actually important. So can you kind of like give your two cents or kind of like how you think about retirement and talking about retirement to young people in particular, do you have any strategies or processes that you’ve used for that that have been particularly effective?

Dan Kryzanowski
Yeah, absolutely. And, you know, I’ve been fortunate a lot of folks, probably some of our shared connections have reached out to me for advice. So what I generally share, say, folks a few years out of school or just general guidances, you know, like anything, what’s kind of your short term and super long term goal and I purposely don’t go deep into the middle. So by short term, I mean, you know, if your family let’s say you, you were born, my one of my mentees at UT Austin, his family was in real estate, he’s felted he’s touched it he’s even has his realtor license in college. He’s pretty handy also. So with that said, I think you know, for his, you know, ultimate retirement, I think it’s going to be owning properties. Now, yes, you can do this with your piggy bank checking in your retirement account. But I would say initially, you know, if you can move in this is probably general advice if you can move into a condo or anywhere to start building equity. strongly suggest that because most folks I mentioned on the call here have some sort of side gig or by default or 1099, solten. As a realtor, you can write off a whole lot of things. And there’s other depreciation benefits. So as early in your career as you can get to know zero taxes, I think it’s a positive and a big factor of that is, you know, either buying real estate and doing stuff or more so just putting money into an IRA or solo 401k, whether that’s self directed or not. So, you know, the one for me looking back my saving grace, and this was a different time in place. You know, my career started 20 years ago, right before 911. The one thing I did though, is I always maxed out my 401k. And you can argue that was a good or bad idea. But the benefit here was, you know, in 10 years, I had x hundred thousands of dollars in the bank that I was then able to really use for multiple self directed investments. So, yeah, I mean, as I say, there’s the buckets for savings for retirees. But I would say, you know, having hard physical assets in your 20s is one thing that I would, you know, strongly think about, there’s many folks I know in their 30s that, you know, have that optionality to frankly not work, kind of a nine to five and live off of maybe not fully, but live off of some passive income. And I think that’s the goal that you want to get to. Also, so, you know, with that, it’s, it could be a little scary, you know, maybe not the most lucrative in the first year, but it’s like anything, if you stick to it. As I said, you have that wonderful optionality at age 30 to really control your time and what you want to do going forward.

Apple Crider
Totally, totally agree. And you brought up a lot of really valuable stuff there, just in terms of I mean, the whole idea of financial independence and creating those passive income streams, reducing your tax liability, that’s something that I’m always harping on. So I’m glad you touched on a lot of those points. I’m curious, because we’re going to talk a lot about the whole the whole self directed stuff that you were kind of hinting at there. But before we do, can you kind of fill the audience in on kind of how you got into the self directed retirement account space? I mean, it’s a pretty specific area to be in. So kind of walk us through the process of like, How How did then get get to this place?

Dan Kryzanowski
Yeah, no, absolutely. And, you know, in the spirit of the hangover and thinking of weddings, and I know, you know, you’re a smart guy spent some time overseas, so I’ll give the PG 13 versions of those could repeat. Okay, I respect that say was me, a Southern Gentleman, and I was wearing powder, blue underwear. So, you know, I’ll keep it at that. But uh, you know, not half joking. We were actually co best men in a friend’s wedding. He was from North Carolina. So that was my little shout out to powder blue point 12 this year. And, you know, with that, you know, of course, we’re talking shop and he said, Hey, you know, I flip houses and I’m like, sounds interesting. What’s that and all I really Heard if he said 15% I’m like, wow. So you’re 15% of my money. He’s like, absolutely. And it’s, you know, first lien I said, What’s the first thing? He’s like? Well, it’s not your house. I’m like, Well, I like North Carolina. Worst case. No. We kind of went through that. And then, you know, the big wild moment for me is he said, Did you know you can use your retirement dollars? And for me, this just, it’s kind of when, you know, the C part and I was like, wow, this, this is amazing. So instead of me sitting and some, you know, year 2040, target date fund, or, you know, if folks are familiar what happened at the end of February this year, it’s like, ooh, can I stomach the market dropping and this you know, this happened to me Of course, no way. People die with some pretty heavy Dibs. You know, is this something you can stomach and while the general market tends to go up, I mean, if you’re in you know, certain funds, like say an international or something, you know, sometimes the rustle you never know what you’re truly in it may not bounce back to where you need it. So with that, I just said, you know, it makes sense for me to control. That’s just my money. But you know us as humans in general, I mean, if we look how life has played out, it really wasn’t sending our money somewhere to a hedge fund manager and the 40 years later, hoping there was a return. I mean, everything was very tangible. in your community things you can touch, feel collateral, you can touch feel, and I feel you’re doing a lot of that with self directed accounts. So that was, you know, how I learned about it. And you know, of course, I opened an account on one of the legacy providers out there and started to invest.

Apple Crider
Sweet, so did you just just kind of dive all in right away? I mean, that this guy told you like, yo, you should be investing in real estate, getting these contracts, doing some flipping? Did you kind of just say, great, I’m dumping these hundreds of thousands of dollars that I’ve saved up over the over the decades into a self directed account, or what did that look like for you?

Dan Kryzanowski
No, so it was a great question. I mean it was a slow play. So you know, no matter what you invest in whatever pool of money, but my advice, of course, is diligence. And that’s enough to be a super expert. And of course you cannot, you know, the the call to quote unquote market can change. You know, the person could be a bad actor, but I’d say generally speaking, you know, obviously, I had a few days with this guy, so we got to really know him. And even things that I’ve invested in, I’ve at least have spoken to him not flown out to meet who I was investing in, or have a video call with. A lot of times, it’s just a gut. You know, I think relying on your gut is pretty solid. When I look back in investments that have not gone well, it’s either that something was right in the gut, or, you know, the four year old spleen, I call you too many sugar packets, and you’re not really thinking clearly. So, you know, equate that to what you want, you know, in your 20s But uh, yeah, I mean, basically, for me, it was the, the diligence and the person. So no, and that’s it. I’ve been wanting smaller and I wouldn’t attend thousand dollars. So this is a new worlds for me. You know that that was that was a fair chip. And then you know, once that paid back goes easy for me to go to 25. And then the next time around go to six figures. So, which, you know, it’s kind of unique what I’ve seen with people, a lot of times the first investments so you know, the flip side for folks raising money out here, even your best friend, like give you a very, very small amount the first time because they want to make sure you hit your KPIs and do whatever you say you’re going to do over the first year 18 months, and then you know, they might add a zero on the next check. So it’s a it’s pretty wild, but no, I went in small and generally speaking, I tend to go small whenever I do my first investments.

Apple Crider
Yeah, I think that’s that’s generally pretty. I mean, that’s the advice that most people aren’t gonna argue with that would say, What did what did that look like? Because I’m curious with with a self directed account, I was somewhat under the assumption that like, okay, he or just kind of walk us through like, what did that $10,000 it was that like a part of a property was that the downside payment for something like What was that? 10,000?

Dan Kryzanowski
Yes. So what it was it was part of a basically a payment so with

it very so basically what this does is they instead of going to banks or taking out loans from say a bank traditionally or mortgage, it’s strictly hard money loan. So if a property is 100,000 whether, you know, I give them 100,000 on the next property or, you know, if you put in 10 I put in 10 the next day people it doesn’t get to that extreme but generally speaking, yeah, he is not taking his company’s not taking money from banks. So with that, yeah, I was, you know, basically, usually it’s just one of two you know, I might put 5050 let’s say an example I put the full hundred. So for me, what it looked like is I was probably not personally but I was comfortable with it because of the market comps. Showing that let’s just use round numbers you know, they bought for at the factory Use of the down the street are worth 150. They put in 20 to refurbish it, and you know, who knows what they sold it for, because that’s their profit. But, you know, I was paid on. So let’s just say that the deal went out a full year, for sake of argument, I would be paid that 1500 dollars. So the 15% times the 10 grand of interest, and it came back as an interest check in principle, which was great. And the best thing because it was in my retirement account, I did not have to pay taxes when they came, you know, tax time. So that’s a pretty, I’d say exciting piece about it. So that’s how I made my first investment. And you know, of course, I then moved money from my old old’s call it I think a stock is fidelity, move more money, and so maybe the next day to 25 day with him, and this is kind of an a copy paste throughout. And yeah, it said it’s worked out really well.

Apple Crider
Sweet. So there’s a couple things I want to dive into there. You mentioned, first lien a couple times can you give the audience who maybe isn’t as familiar with real estate, what you mean when you say that

Dan Kryzanowski
Yeah, basically means if stuff hits the fan, you in this situation, the first lien holder is going to be the owner of the property. So let me have the opposite. I know a lot of folks might say, Hey, you know, Dan, I’m 24. I put, you know, maybe I scraped up 10 grand in a Roth six and 29, six and 2020. I heard of these crowdfunding platforms, what do I do? What I would say is you’re probably not going to be the first lien. So if something looks risky, or you don’t understand it, realize if stuff hits the fan, the bank, because a lot of these times it’s going to be much like think of what your parents did with their house they bought they had a mortgage, you know, the bank is going to get the property and you’re going to be the second or third. So it’s basically like standing in line. So to the extent that you’re the first lien holder, you know, basically once again, if stuff hits the fan, you’re gonna own this asset. So that’s the The best way to think about it whereas, you know, once again, that’s why being a hard money lender sure is risky because if it’s a single property, it’s not a fun. You know, presumably, if you’re not doing it in your backyard, you might not be as familiar with the local economics and like everything I said, you really have to get to know the person, I’m the kind of the amount of capital you’re putting in. So I wouldn’t put in your full amount on day one. But also, I think, a very fair question, especially when you’re looking online there’s many real estate crowdfunding platforms you know, see if somehow you’re going to be in the first lien and most likely you’re not so realize you’re kind of in a you know, in this second position, you probably still will get paid off, you know, especially in current market climates, but just be more aware of that. You know, you will the first thing all there’s basically first in line,

Apple Crider
totally, I think that’s an important thing to just go over that if anyone does get involved in any of this, like peer to peer hard money, whatever they they understand what to look for there. So You talked about hard money lending, what else can you do? or What else have you personally done with self directed accounts? Like what are the other options people have available to them now that they’re outside of the kind of limitations of like stocks, mutual funds, ETFs, etc.

Dan Kryzanowski
Yeah, so I mean with me as I got comfortable, and also was advising startups, and I’ve done personal loans, I think female entrepreneurs, you know, are great to do loans. I think they’re First of all, they’re great businesswoman. They’re very trustworthy, it’s great returns you know, with that so as I do, I said, you know, I’m doing a lot and so you know, usually my first investment or loan is that smaller dollar and just the administrative time started to add up so for me, it was frustrating. So that but let’s say like you, you flip houses and I give you 25 pay every quarter and you pay me and that’s that, you know, it was becoming a headache, or every time. Gentleman I reference in North Carolina when I wrote him a check that he and I would be on the phone with our custo my custodian for me just to write him a small check. So sometimes, frankly, when he’s like, hey, do you have an extra 10 K or five or 15 to put in a steal for three months, it wasn’t worth the time and hassle for either of us, which was frustrating because you’re leaving money on the table. So, you know, with that, you know, what kind of came through and what ultimately rocket dollar became about two years ago, was checkbook control self directed accounts, and I’ll answer your question, but why I say it in this order. It’s, it’s not a self directed custodian, which means it’s probably an SD IRA. custodian, so it’s like mom and dad still holding your allowance money, you got to ask for your money back then. And if you’re self employed, you’re still not getting the benefit of really contributing a lot. So our view at Rockefeller was to really democratize it using myself as a case study to answer your question was checkbook control, meaning I have full access to my money at all times, just like with your piggy bank, checking account, self directed with the sole 401k so anybody that even says gig economy out here, you would qualify for the solo 401k. So what I did with my checkbook control, self directed solo 401k and probably put that in the call notes, or the Rockefeller FAQ, if you want to learn more, yeah, I continue doing the hard money loans. I also expanded it out of residential to very heavy in self storage, because I’m familiar with the space that was as an equity investor on multifamily, which just think apartment buildings, I did both debt and equity on that not as much a hard money loan, but a different type of debt. And then as I said, female entrepreneurs, some of the startups that I mentor, I will do angel investments. Obviously, I’m well aware of the risks going in as an angel investor, but I actually use my Roth account. So think of the Facebook story. Hopefully, I’m not dating myself, the same Facebook here, you know about with the crowd, but it’s the seed versus tree analogy. I mean, if you were to put in, you know, 10,000 dollars in it turns into a million you’d much rather pay taxes on the 10,000 million. So that’s I think a pretty fair sampling of other people you know that that I said that comes through trust relationships alls and getting to know folks, another biotech company this gentleman’s already exited for over a billion dollars in his life. So trust me, you don’t want me you know, even I think I dropped the head off the grasshopper a temporary bio, so I’m not gonna buy or any sort of guy on that. But from an investment standpoint, obviously, that’s going in my Roth because, Sure, I’d have a pretty good feel. And you know, from the diligence, so long answer to kind of how I got to it, the mechanism I use, and then for folks here on the call, I said, even if you started off with like, you know, five k 10 k, having that checkbook control is going to save you time. I also, you know, say you want to go into 10 crowdfunding things that are grand apiece, you can do that. And from an administrative side, it’s going to be as quick and easy as using your checkbook. Your piggy bank account versus being Stuck on the phone with some, you know, think of it like your old stodgy uncle out there and just trying to explain to him what crowdfunding is.

Apple Crider
Okay, there’s a lot, there’s a lot I want to unpack in there. There’s a lot of ways you mentioned that I think our listeners might be a little bit confused about. So first off, can you just kind of re evaluate the, or kind of relay out the difference between having a custodian and what that even means versus having checkbook control. So I think that’s something that our listeners aren’t going to be super familiar with. So just kind of laying that out of the ground level.

Dan Kryzanowski
Sure, so custodian and you’re right, this words being used less than less, but somebody is then they hold your money basically, and they ensure to the nth degree, that everything you do is above board, and they, you know, might even be they probably have their own processes their own paperwork. So it’s a very I’d say long arduous process cover your rear versus on the Flipside is the checkbook control where, you know, we feel people, you know, the sub, even my son authority is over the age of probably eight, you can say, Hey, here’s the three things you don’t have to do. Here’s whatever else you can do and then you can do them. So let me be very specific here with the checkbook control. Like the custodian, the laws are very simple. So let me give an analogy. First, are folks familiar on the call the health savings account where, you know, we need surgery grade, you have your health savings account, which is probably some debit card tied to a credit union that you don’t know. But you need that surgery, you can do it and it’s tax deferred dollars. Now you go for a manicure pedicure, you know, that’s below board, you’re gonna get thing. In the in the self directed whether you’re with the custodial self directed IRA or solo 401k. There’s three things you cannot do. So no life insurance, no collectibles, like Air Jordans, collectible arts, and the big thing is not yourself, your linear family. So you cannot invest in your own startup. You know, you can not buy a flat and then have your parents come visit you on the weekends. Everything else is in play. So from that standpoint if you basically just abide by those three very simple regulations what the IRS says you cannot do, you can basically do anything else. So you know, crypto friends company, private loans, startup real estate, you know, I would say cannabis is still out of play. I think that’ll change in the next few years. But it’s a pretty simple guidelines that you know, and I would just from a reference point, you know, at rocket dollar on the first you know, x hundred million of assets, the next thousand people that sign up for an account, nobody’s been in that gray area. So you know, we also don’t try to, you know, give you the Wink wink in the sales and the support on our FAQ. We’re very kind of upfront about what we feel you can and cannot do. So. Yeah, I mean, we saw a lot of folks and just as we see, you know, called the millennial Gen Z crowd, I think You know, as investors, you guys are very strict with diligence you know, spreading a portfolio and then most of all just having access to your money not having like a financial advisor or some third party out there that’s holding your money. So I think there’s a different sense of maturity and everything else out there that, uh, yeah, that I kind of see. So with that said in the hypothesis that at least we put on a rocking dollar is playing out that folks would prefer the checkbook control accounts versus the custodian.

Apple Crider
Totally, totally, I think. Yeah, I definitely see where the draw is there. I’m, I’m curious. And just to kind of relay, relay that out what you said, um, it was it was a lot more open than I originally expected. When I first started looking into these things, how many different things you could invest in, I imagine there would be a lot more red tape, but the fact that it’s really just like, these are the three big things you can’t do and then Most other things is probably a yes that was that was pretty surprising to me. I’m I’m curious though, why why is this something that since there are so I mean seemingly few restrictions on like what you can and can’t invest in? Why is this not something that like the bigger brokerages like your fidelity’s, your Vanguard, your Charles Schwab, why isn’t this something that they are actually offering to their clients?

Dan Kryzanowski
Yeah, Diamond my question and, you know, to preface it’s a, you know, these have been around since the 70s. At least, the IRA, the self directed IRA and the fidelity’s and they dip their toe, but, you know, it’s not as simple as you’re gonna go into your nine to five and just be thrown in some target date mutual fund, you know, so from that the average you know, I would say Joe Jane America, not as much as the knowledge they’re just, you know, busy people have their lives, their kids, their hobbies, their jobs, so With that, when you just think of literally the trillions that are in the likes of fidelity Vanguard, it doesn’t behoove them to say, you know, we’re going to try to educate the populace and something slightly more complex. And there’s a little more administration and I just think, you know, I think legally these big guys will always be fine with, you know, proper lawyers, but from a reputation side, you know, let’s say here, somebody turns around and, you know, invest in a startup that goes belly up, and they say, well, fidelity, you didn’t really tell me even though you know, in this example, the big guys would not have no legal liability from a reputation standpoint, they like you know, we’re just going to stay away from that. So that’s the main reason you know, why they, as I said, and also just from a, I think, a generational stamp, or let’s just say, you know, collectively our parents out there they have not you know, they’re more of the type of art sadly especially my parents generation go to work nine to five work for years. probably been on the pension at the end, it’s just a much different mindset of, you know, kind of the top down mentality letting other people control for you. And frankly, that’s where a lot of the assets are where I think as we look no particularly for a lot of listeners here on the call, you know, if you get an inherited IRA, you’re probably not going to let it sit in some s&p bunkers while you pay somebody 2% just to, you know, have it in the SMP, you’re probably going to at least diversify, maybe keep some in the market, but to go into private assets. So that’s tangente away a little bit, but that’s the big reason why fidelity Vanguard, you know, they just have a relatively simple business model that they’re making a boatload of money on. So you know, what, why, why rock the

Apple Crider
boat? That That makes a lot of sense. Yeah. I mean, they’re, they seem to be doing alright, so far in terms of just how much assets they have under management. So I totally, totally makes a lot of sense. I want to dive deeper into the real estate side of things because I know you mentioned one way to do that in terms of the hard money lender. But, and I know you mentioned as well, you’re investing both equity and debt. So can you kind of break down a couple different ways that it’s kind of possible to use a self directed IRA to invest in real estate outside of hard money lending?

Dan Kryzanowski
Sure, absolutely. So, you know, I mean, the first and the most common is just want to make it clear within self directed accounts, you can still invest in the public markets, so you can go invest in the real, you can invest in a builder, a developer, you can buy their debt, if you’re familiar with the stock market. So all of that is still still in play. And the more I’d say private side, you know, folks in the crowd are probably most familiar with is a lot of the different crowdfunding platforms out there where you know, as little as 500 or 1000, you can own a piece of a building in New York City. That’s, you know, very common you know, crowd streets for one just throwing out one example with a Southern Oregon and they just a large deal. So You know, there’s a lot out there, acre trader, I think is a real great one for folks on the call here. If you want to own, you know, part of a parcel of land, I would say part of an almond farm, obviously you can’t buy the whole farm but you know, for a few thousand dollars you can get it. So that’s pretty cool. I think that’s a very sort of real example. You know, what you’re seeing online and then on the true private side, as I said it in terms of niche, you know, niche real estate, stuff like self storage. I think mobile home parks RV are becoming the new sexy thing of the 2020s. You could, you know, the silver tsunami, old folks homes and I would say that the end of the rude way, but think of the resorts and everything where folks tend to live, you know, that are in the retirement stage. All of this is in play and, you know, by debt and equity. What I mean is, if folks that are finance majors out there, you know, the duck gets paid before. So, let’s just talk something I personally invested in and once the You know, doing my diligence, the lowest amount they had was 20,000 to invest. And the a share pays 10%. So much like we said before, it is similar to a hard money loan. But you know, it’s the debt. And so after you know, certain people get paid, I’ll get 10%. No matter how good or bad the property does, well, I should say bad. But generally speaking, these guys have missed out a payment of 30 years, so pretty guaranteed. And then the B shares equity. So once all the debt holders get paid, let’s just use roundup for say there’s a million dollars in debt and there’s a million in equity. And the equity after the million of debt holders get their million dollars back under 10%. Let’s say 1.1 million, the equity holders get paid. And of course, what’s been pitched is that the equity holders would get a much greater return because once again, if the project doesn’t do as well, much like the stock, you’re not going to get paid on the appreciation. So I’d say the best concept is to just think of the order and you know, be aware of the first lien and then that and then private debt and then equity and realize Of course From there, you know, the value back first lien holders going to get the less or should get the least amount in terms of percentage, and then the private debt or secondary debt on top of that. And then finally, anybody that’s an equity holder. That’s the nice thing. It’s like if the project goes gangbusters, you might get the coven of 2030 40%. So I’ve seen that in some things that I’ve invested in, and that’s obviously pretty attractive, particularly in a retirement account where you’re not paying taxes on capital gains. So that’s some of the other things that I’ve personally done with my portfolio is that I’m very heavy in self storage as an equity investor. So in these scenarios, the bank has that think back to that first lien and then it’s just private investors. There’s no sir call it like middle tranche in the in the middle with private debt. And this pays a dividend just like the stock quarterly. So I received let’s just use round numbers, I put 100,008%. I get $2,000 every quarter, which is great. And then of course, you know, we presume that these properties are going to sell for roughly twice as much as what we bought them and, you know, five or so years. So it’s it’s pretty popular. So those are just two examples of things that I’ve invested.

Apple Crider
Okay, super, super useful. Um, for the listeners that are maybe a little bit like, they don’t know where to start, like say they’ve only ever invested in in stocks and ETFs and whatever. And so all of this is kind of new territory for them in terms of hard money and debt and all this stuff. What are where would you recommend they start? I mean, I know you mentioned a couple websites where you can kind of do crowdfunded real estate that’s a little bit more like, a little bit more like hand holding and kind of walking them through the process. So what are what are some good avenues you think for somebody who’s never really ventured into this area before in terms of real estate to to get both some education and then just a little bit more structure in terms of initial investments?

Dan Kryzanowski
Yeah, this is a great question. This is part of the mission of rocket dollar instead. educate and empower Yeah, of course we sell accounts in the back end and we’ll talk on that in a moment. But, excuse me, the big thing here is that you know, we we share myself, the other founders, we share our portfolios, you know, not to the nth degree, we’re talking on this call, but we share the types of investments that somebody might be more you know, to crypto and bought Bitcoin, well, you’re just using a different you know, bucket of money, your retirement everything else pretty much the same. So that’s just one kind of my side example. And we showed some rockin dollar comm on our blog. I mean, we go to TP portfolios are made. You know, secondly, we bring on the people that are raising money, the sponsors, other true independent advisors to talk about what they’ve advised folks on so on rocket, your dollar podcast, we go through like any podcast pick and choose and read the show notes who you may want to go into. And then I think finally in terms of the You know, the technicalities of these accounts per se. As I said, our FAQ, we call it a knowledge base because I think it truly is that and HubSpot voted us one of the top in the world, the knowledge base does go into detail more kind of what you could do contribution limit. So that’s not as much what you choose to investment more than mechanics, which I think are also interesting. So just wanted to preface those with some sort of resources. And then, uh, yeah, I mean, there’s just, there’s a lot out there. So, you know, I’d say my, my one word of advice would be, you know, even with real estate, everybody thinks, you know, the markets are going up forever, but you know, read the fine print or ask the questions like, hey, am I the first lien holder are, you know, do you actually own the dirt under the property? There’s some pretty good questions, I would send the one nice thing about crowdfunding now more of the reputable sites that have been around. Let’s say if you’re investing in a business, like a bar restaurant, not real estate, which one is extremely risky, but on some crowdfunding, the way that it’s structured is you’re getting paid off. The first year revenue. So even if the restaurant ultimately goes belly up in a few years, it’s like, I think the Steven Spielberg analogy, he got $1 off of every ticket, you know, that the top line before anybody else got paid. That’s as some of these other ones are structured and crowdfunding. So, you know, I would look into it. And as I said, even with maybe even personal money with some of these, you can go and as small as $100, you know, maybe 500 bucks, you know, do five of these little crowdfunding deals or, you know, for some of the lawyer types or lawyer, you know, there’s probably some pretty basic one page contracts if you’re doing a private loan. So, you know, there’s more things that I think are becoming transparent or cookie cutter people new stuff on the private side, but like anything, I would just say start small learn. And, you know, if it does behoove you on the on the retirement side, I’d say if you feel that you can have, you know, five or especially 10,000, at least say even by the end of the year and contributions probably makes sense to open a self directed retirement account, to have that optionality to invest in what you want when you want

Apple Crider
to I mean, that was all super valuable and great, great places for the listeners to go to check that stuff out. And I’ll be sure to link up a lot of those resources in the show notes for them to reference. Dan, I tell us tell us a bit more about rocket dollar and where our listeners can follow up with us. And just where the best place for them to go is, if they are actually interested in opening up one of these counts.

Dan Kryzanowski
Absolutely. So let’s start with the good stuff first. You know, I’m from Philadelphia. So we’ll say you know, up to $100 off and sorry, you can’t see me You should question my Ben Franklin here. But yeah, you know, as a joke, if you can spell it, you can get it. close friends with Apple here. It’s d krisan. auskey. Try ZNO ws. So we’ll obviously have that in the show notes. Definitely. The twitter feed permits 140 characters not by too many, but well, but uh, you know, that’ll get you up to $100 off pending your account type and You know, from here likewise, for folks that did want the one on one, just simple Dan da n at rocket dollar.com. And we probably won’t talk maybe on a future show. But I would say for folks that might be raising money, you know, whether it’s, you know, you have a startup idea on the side, and maybe you’re a little versed in real estate, and you’re the one that’s fine flipping houses, you know, realize the service rocket dollar provides for you, it doesn’t cost you anything, it’s completely free. So folks that are raising money, you know, we say, you know, six figures in six minutes because we will assist you to raise more money from less people faster. We’re not pitching your deals, but we’re giving you proven tools that literally could get you six, you know, let’s just say on a, you know, 2015 to 20% of your raise, probably retirement dollars. So anybody on the phone that is raising money, make you aware of that. And then the final thing, of course, you know, within Rockefeller some of the things we talked about here, of course log the Rockefeller dollar podcast. We bring in really, really good experts I say pick and choose the shows, you know, whether it’s 1031 exchange asset protection, something as simple as you know, I’m, I’m I accept hard money loans you know, we have I think each show really set up a lot of the great questions you had looking at our podcast list I feel there’s probably a podcast with the National expert on each one of those which is which has been really fun. And then you know, of course the products are listed the solo 401k so anybody that’s self employed, I’d save it for like my realtor rockstars or, you know, self employed consultants, you know, in addition to like, think what your W two friends do, how they differ 90,000 when they maxed out their 401k you cannot only do that, but you can also add another, you know, 30,000 on it. So if you have a true Rockstar year, say as a realtor make maybe make 250 K or so, you can actually salary the per up to 56,000 Times up by two if you’re you know, young and married, so It’s a, there’s a lot of powerful things I think just at least become aware of that’s listed on our page. And then finally, of course, the FAQ knowledgebase that’s been voted one of the top out there really goes into detail. So, you know, even if you’re just here to learn, I’d suggest, you know, go to the resource, sign up for the newsletter. You know, the podcast, as I mentioned, cool stuff, it’s not boring. It’s, you know, on a part of an almond farm, or, you know, part of the heartland acreage, but you can do it for a few grand, like, that’s pretty cool. So, you know, that’s what we offer within the Rockefeller portal.

Apple Crider
Exactly. I mean, there’s a ton of there’s a ton of valuable stuff over there. I’m personally looking into that solo 401k, like you were mentioning there and found a lot of really good resources on the site, so they’d love to have you back at some point. Talk about those once I get mine opened up and such, but um, yeah, Dan, I just want to say thank you so much for your time. I really appreciate it. I know. I got a ton of value out of this conversation. I’m sure our listeners did as well. Do you have any last closing thoughts you wanted to leave us with today?

Dan Kryzanowski
No, I just said, you know, for, you know, keep on, keep on doing what you’re doing. I think it’s great that you know, and I’m happy to engage in mentor mentee relationships or just for quick questions with folks. But I just I really appreciate the mindset diligence and the fact that you know, kind of a generationally, me You guys are really taking back control and power in yourself. That’s just super exciting for me, and I think the way the world should go, so, you know, as they say, onward and upward.

Apple Crider
Absolutely. Well, much respect, Dan, and I hope to see you next year at fincon.

Dan Kryzanowski
Awesome, brother. Thanks so much.

Apple Crider
Well, that is going to do it for the episode here with Dan krizia. Now ski, I had a ton of fun learning about self directed IRAs. I’m almost convinced I’m almost convinced to dive on in. And we will see with these retirement accounts that I’m opening up throughout this year, if I decide to go down that route or not. If you have a self directed IRA or if you’re thinking about creating one open one up, definitely let me know I would be very interested to hear your experiences. As I continue to refine my decision making process myself and if you want to follow up with Dan at all, all of those links that he mentioned will be in the show notes for you to peruse, check out at cetera so that is going to do it I hope you got a ton of value from the episode. And if you are looking for any of the other resources mentioned in this show or any other episodes of the podcast, head on over to Apple crater comm slash resources that is kind of an aggregated spot of all of the best resources that I have found that have been mentioned on the podcast for you to find one simple spot so all of my top credit cards, all of the services that I use on a daily basis and all the things that have been recommended by my guests, so definitely check that out. And if you got value out of the show, I would really appreciate you leaving a review on your podcast listening platform of choice they really do boost my ego but also helped me figure out how to make this show as beneficial as possible for you. So hop on over there let me know if you are enjoying the new style of shows focused more on the personal finance side of things. I know I am a huge personal finance nerd, maybe you’re not so let me know how you feel about it. Otherwise, have a wonderful, wonderful day and I will see you in the next one.

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