Putting your money to work effectively while mitigating risk is an important goal of today’s real estate investors. Dan Kryzanowski is an experienced commercial real estate investor and hard money lender. Notably, he is Executive Vice President at Rocket Dollar. In addition to focusing on managing his own real estate investments and carving out a wonderful life for his family in Austin, he helps other investors achieve similar goals and save time in the process.
Specifically, through Rocket Dollar, Kryzanowski helps individuals save time and energy by showing them how to tap into their self-directed IRA or solo 401(k) account for investment capital. In fact, he states that self-employed individuals who have 1099 income can defer as much as $62,000 annually, and this doubles for married tax filers. With this money, individuals can create a healthy income stream by developing a real estate portfolio with investments in multifamily, self-storage, and more.
While several other companies offer a seemingly comparable service as a custodian to a self-directed IRA account, Dan Kryzanowski and Rocket Dollar stand apart. Rocket Dollar is not a custodian. It provides checkbook control for IRA accounts. In addition, it offers services for solo 401(k) account holders. For only $15 per month, Rocket Dollar helps individuals optimize the power of their investment accounts and save time in the process.
According to Dan Kryzanowksi, there are two primary types of investors. One group of individuals does extensive due diligence. Then, the investors prefer to make the investment and move on to the next opportunity. Often, these are the investors who initially give Rocket Dollar control over an initial tranche of $100,000. The second group of individuals is investors who are venturing into the water slowly and perhaps for the first time. These investors may be more willing to initially invest up to $25,000. Kryzanowski also recognizes that some investors are first-time syndicators who are trying to raise funds from their network of colleagues, friends, and family. For these individuals, Rocket Dollar provides a short snippet that can be inserted into email canvassing efforts. This snippet talks about how investors can use their self-directed IRA or solo 401(k) funds to make the investment.
Rocket Dollar’s business model is simple. It collects a flat $360 annual fee, which equates to approximately the cost of a monthly Netflix subscription. This is the company’s fee to cover its administrative costs, and the fee is flat regardless of the size of the portfolio or the complexity of its investments. This annual fee is primarily how Rocket Dollar raises revenue. As part of the service that it offers to subscribed members, Rocket Dollar hosts webinars, podcasts, and other types of informational sessions. These are designed to help investors make well-informed decisions with a high level of confidence.
While Rocket Dollar educates individuals about their options, it does not offer financial advice. It specifically helps investors to see the time-saving benefits associated with checkbook control as a means for diversification. Dan Kryzanowski sheds light on the fact that Rocket Dollar is specifically affiliated with between 300 and 500 partners that offer real estate investments, such as syndications. However, Rocket Dollar is affiliated with partners outside of the commercial real estate realm as well.
Dan Kryzanowski delves into the fact that there are $10 trillion invested in IRAs alone, but only $100 billion of these funds are in self-directed IRAs. While self-directed IRAs have been available for almost five decades now, relatively few individuals are taking advantage of them. He acknowledges that individuals who have greater control over how their retirement assets are invested may have a greater return. However, individuals keep their money locked up in a traditional IRA with a relatively minimal number of investment options until they are at least 59.5 years old. Putting your money to work as soon as possible through a checkbook IRA allows individuals to take control of their finances.
Awareness and knowledge are two obstacles that prevent many people from taking advantage of a checkbook IRA. These are prime objectives that Rocket Dollar strives to address through its educational and support services. The concept of IRA investments has largely gone under the radar with regard to social interaction. Kryzanowski specifically strives to create a buzz about this investment opportunity through education.
Outside of Rocket Dollar, Dan Kryzanowski is an avid investor. He has a multifamily property near the commuter corridor in Seattle as well as 10 single-family rentals. He sees Seattle’s commuter corridor as a great place to invest in because of the stability of Amazon and other major employers in the area. Regardless of whether he is investing in commercial real estate himself or as a hard money lender, he looks heavily at the location as well as the individual. He specifically mentions a multifamily investor who has consistently made payments on an 8% note for the last 15 years. He has also invested as a silent equity partner in five restaurants, and he recommends taking advantage of these opportunities in smaller investment amounts through crowdfunding platforms.
When Kryzanowski reflects on his overall professional and investment activities, he stresses the importance of putting your money to work while also saving time. Time is a limited resource, so he enjoys helping others put their money to work without the burden of filling out form after form to make an investment. At the same time, he is willing to accept a slightly lower return on investment on a quality hard money loan scenario because of its simplicity.
In hindsight, Dan Kryzanowski stresses the importance of knowing real estate laws before making investments. He lost a healthy sum of money on a residential real estate investment in Austin years ago simply because he did not understand local laws. He also advises splitting your investment funds between debt and equity for enhanced portfolio management.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.