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Managing your Real Estate Investment

After you've completed your investment, you can manage your portfolio and take the following actions within our online portal. 

Managing Property Income 

Deposit Service 

NDTCO enrolls all real estate assets in our complimentary deposit service, at the time the transaction is processed. This unique ID will be specific to your NDTCO account and a single asset in your account. You will receive a specific ABA/routing number and account number via portal message, which you can give to your property manager, rental company, or tenants, that would like to set up direct deposits into your NDTCO account. No fees apply for a Deposit Service setup, this is included in your NDTCO annual administration fee.    

Benefits of using our Deposit Service:  

  • Funds will automatically be allocated to appropriate asset.  
  • Funds are available quicker (at no additional cost), not subject to a 5-business day hold.   

Rent Payments Online 

Your IRA’s tenants have the option to make rent payments online via ACH at portal.ndtco.com and it’s FREE! All they need to do is click the “Pay Now” button.   

Incoming funds will have a 5-business day hold before the funds are available in your account.  

Checks Mailed to NDTCO 

All income from the property belongs to your IRA. Instruct your renters to make the rent checks payable to your IRA as follows: NDTCO, as custodian, FBO Account Holder’s Name IRA.  We cannot split checks. Each IRA account has to have its own separate rent check for partnered properties. The checks should reflect the same percentage of ownership listed on investment documents.   

We cannot deposit any income checks into your IRA that are made payable to you personally. Any such checks will be returned to the renter with correct payee instructions. All checks need to be accompanied by a deposit coupon.   

There is a 5-business day hold on incoming rent checks beginning on the date of deposit.  

Managing Property Expenses 

All expenses for the property are the IRA’s responsibility. Bills for the property need to be sent to the account holder directly and then can be paid directly from the IRA using our online Bill Pay System. Bills paid by personal funds can be considered an excess contribution or potentially a prohibited transaction, subject to penalty by the IRS. You have three ways to manage expenses generated by your investment in Real Estate.  

Pay Expenses Using Online Portal (FREE) 

Use the 24/7 bill pay feature in the portal to execute payment. Simply submit a free one-time bill payment through our Online Portal.  

You may set up recurring payments for HOA or Mortgage bills through the Portal’s “Pay Bills” page. You can remove, update the amount, frequency and start date of any scheduled HOA or Mortgage bills from the “Pay Bills” page. It is a good idea to keep records for property expenses in your personal files.  

Property Manager Pays Expenses 

Property Managers may set up a trust or escrow account that is used for receiving rent and paying any expenses.   

Have a Non-Disqualified Party Pay 

After the non-disqualified party pays a bill on behalf of your IRA, you can use our online bill pay system to reimburse a non-disqualified party.  

Insurance 

The IRA should be named insured. Some insurance companies will only put an individual’s name as the named insured. If this is the case, they can list you (personally) as the named insured, but they must show that the IRA is the “First Mortgagee” or the “Loss Payee”. When insurance companies will not allow the IRA to be named as the insured there are often challenges getting the reimbursement check into the IRA, causing significant frustration for some account holders.  Many account holders have found it easier to choose an insurance company that will allow the IRA to be named as the insured as it prevents issues should a claim ever need to be filed.     

  • In the event of a claim, the check MUST be made payable to the IRA and mailed to NDTCO for deposit. The address shown for the insured is NDTCO’s address. DO NOT PAY the insurance bill with personal funds. If an insurance bill is paid outside the closing or not escrowed with a mortgage, submit a payment using the Online Portal.  
  • Any expenses for your IRA can be paid through the online bill pay. Invoices/bills should be set up as follows: IRA c/o New Direction Trust Company. 
  • Only authorized signers of NDTCO can sign for insurance documents.  

Agreements 

Lease/Rental Agreements 

Rental and lease agreements must be signed by NDTCO. Please upload any signed Rental or Lease agreements through the Portal messaging system.    

Property Management 

  • Your property manager must know that your IRA owns the property, not you.  
  • Choose a property manager who is not a “Disqualified Person” or an entity owned by a disqualified person.  
  • We will need at least a quarterly report from the property manager showing all income and expenses paid for the property. Quarterly reports can be retrieved from the property manager and uploaded directly to NDTCO through the portal.   
  • For further information on how to manage expenses and rental income, reference Managing Property Income/Expenses section above. 

Selling Your IRA-Owned Property 

1) You choose a broker and he or she prepares a listing contract 

Make sure your IRA is listed as the seller and not you personally: NDTCO, as custodian, FBO Account Holder's Name IRA.   

2) You and your broker negotiate the terms, and when met, accept the offer to sell 

Sign the offer and complete the online Sell Direction Letter. You can upload a copy of your contract to NDTCO while completing the Real Estate Sell Direction Letter. Submit your Real Estate Sell Direction Letter and Contract as soon as the property is under contract. 

Please sign the contract as follows:  

  • On pages requiring the seller’s signature, sign as the seller. Please write “As Beneficiary of” and the name of the IRA(s) (titling).  The seller’s name should be the same titling as it was on the original deed when the property was purchased.   
  • Please note you are allowed to sign contracts, counteroffers/addenda, leases and disclosures regarding property within your IRA (except all closing documents and Insurance).  

3) Closing 

  • You receive the closing documents from the title company and review them for accuracy and completeness. Use the Portal messaging system to securely send the documents to us.   
  • We sign as the seller and email or overnight mail the documents to the title company. We also provide them our wiring instructions with your IRA name and account number indicated.  
  • The title company wires your proceeds back to your IRA account with us and we record our asset on our books as sold. The asset is removed from your IRA.  

Please Note: ALL complete and correct documents, including closing documents, must be received at least 3 full business days prior to closing date. Forms received after 12:00pm Mountain Time will be considered as having arrived next business day.  

Prohibited Transactions 

The following actions are considered prohibited transactions and could result in the distribution of this asset from your plan. Prohibited transactions apply to all disqualified persons to your plan. 

  • Purchase, sell, or exchange assets with the account  
  • Yield a commission/fee for the purchase, sale, or exchange of assets  
  • Rent, occupy, or otherwise use property owned by the account  
  • Personally execute renovations/repairs on property owned by the account  
  • Retain account earnings on a personal basis  
  • Cover account expenses with personal, non-account funds  
  • Use of your IRA’s assets as collateral for a personal loan  
  • Use of your IRA’s assets to guarantee credit for a loan on the property  
  • Buying or selling a property from or to a disqualified person  
  • Receive rent payments directly instead of having them go to the IRA  
  • Use the property personally as a vacation home or any other reason  

All expenses for the property are the IRA’s responsibility. Never pay any bills with personal funds. Such payments may be considered prohibited transactions, which could jeopardize the tax-advantaged status of your IRA. 

Annual Fair Market Valuation 

Per IRS regulations, you must submit Fair Market Value (FMV) information for your IRA-owned real estate once per year at a minimum. 

Failure to provide an annual valuation may result in the taxable distribution of your asset. Accounts that have shown no activity, including the valuation, will not be held by NDTCO because we cannot meet the IRS requirement to annually update the value of your IRA and file an accurate IRS Form 5498 for your account.   

To complete a Fair Market Valuation Form, please: 

  • On the Overview page, find the appropriate asset and select Take Action and then Valuate in the right-hand column.   
  • Provide any requested information and upload your supporting documentation.  
  • Agree to the Terms & Conditions and click Submit. Done!  

Supporting Documentation: 

  • Valuation from the County Tax Assessors Office   
  • Comparative Market Analysis (CMA) 
  • Appraisals   
  • Emails are not valid for FMV purposes   
  • Zillow Screen shots are not valid for FMV purposes   

In-Kind Distributions 

To take an in-kind Real Estate distribution, the following are items are needed: 

  • Complete the online Distribution and Notice of Withholding Form through the portal. To access the form login and select ‘Distributions’ on the lefthand. Complete the section for in-kind distributions, stating the property address, and what percentage is being distributed.  Changes to scheduled distributions can be made directly in the portal from the distribution page.   
  • Fair Market Valuation (FMV) will need to be completed with a full appraisal (within 3 years if RMD age, within 1 year if under RMD age).  
  • Prepared deed outlining the change in ownership – reflecting the overall ownership 100% (for example, showing 10% is being deeded from IRA to individual; then stating new ownership is 90% IRA and 10% individual). 
  • We need a clean copy of the deed. NDTCO will sign on behalf of the IRA and send to the account holder for recording.  
  • Please note, NDTCO does not prepare or record the deeds. We suggest contacting a legal professional or title company for assistance.   
  • NOTE: For Required Minimum Distributions(RMD), the distributions will be based on the appraised value for 3 years, and will NOT be adjusted based on a comparative market analysis (CMA, comp) submitted in the in-between years.  
  • When creating the Deed for a Real Estate Distribution, the property can be Deeded to an account holder and spouse (or another person) jointly. This is similar to sending a distribution check to a joint banking account, all cash inside that account is owned 100% by both account owners. The Deed cannot, however, show the account holder only owning a specific portion of the distributed property.    

Unrelated Debt-Financed Income (UDFI/UBIT) 

If there is a mortgage on the property—regardless of whether the property is owned directly by your IRA, or by a legal entity owned by your IRA—you may incur Unrelated Business Income Tax. IRS Form 990-T is used to calculate UBIT for your IRA. NDTCO does not calculate UBIT or submit form 990-T. Click here to download our free UBIT calculator.  

See here for more information on UDFI, UBTI, and UBIT.   

Managing Your Account 

Our online portal combines human power and digital innovation, making it simple to view all your account information in one centralized location. Within the portal, you have the ability to directly message our support team, review recent transactions, download account documents, and review a vast library of educational content easily and securely.   

Simply log into our Online Portal to access and manage all of your account information.   

Learn more.   

Forms 

Please login to the Portal to view forms. 

Property Management Acknowledgement Letter 

A Property Management Acknowledgement Letter identifies the Property Manager and his or her understanding of the IRS requirements. 

Sell Direction Letter (SDL) 

This form directs us to sell the asset/property. Please complete a SDL at the time you accept a contract offer. You can upload a copy of your contract to NDTCO while completing the Sell Direction Letter.   

Real Estate Buy Direction Letter 

This form directs us to purchase the asset/property. Can be accessed through the portal from the Invest tab on the lefthand side.  

Authorization Agreement for Direct Withdrawals 

This form is to be completed and signed by tenants/borrowers should they want automatic rent/note payment withdrawals.