REAL ESTATE INVESTING RETIREES THREATENED by new Kansas CityHousing Authority of Missouri rules regarding Sec 8 rental payments. I was informed yesterday by an agent of the Kansas City Housing Authority that rent checks for my property that is owned through my Self Directed IRA could not be sent to the custodial company, Horizon Trust Company; nor could the checks be made out to HorizonTrust Company FBO Sara Mckeever.
First KCHA agent claimed that they could not send money to an IRA. I explained that Horizon Trust Company is the fiduciary company that handles Self Directed IRA’s and the payments have to go to them or it would violate all the IRS rules.
Second he claimed that the EIN number for HORIZON TRUSTCOMPANY was already claimed by another company called PREMIER REALTY. And, therefore they could not have another company using the same EIN number besides Premier Realty. As I listened to him I tried to understand what he was saying. Basically what he was saying is that Premier Realty owns HORIZON TRUST COMPANY.
After he insisted that they could not wire money to Horizon Trust Company and that they had to send it to me, I said that is ok AS LONG AS THE CHECK IS MADE OUT TO HORIZON TRUST COMPANY FBO SARA MCKEEVER. He said they couldn’t do that either and that the check would have to be made out to me. I tried to explain to him that I do not own the property. The property is owned by HORIZON TRUST COMPANY FBO SARA MCKEEVER.
After this he said that since I refused to cooperate KCHA would have to have the tenant move out of the house.
I insisted that he transfer me to the legal department because this was clearly incorrect. Agent insist that they have to send the payments to the “owner” of the property. I kept telling them that the “owner” is HORIZON TRUST COMPANY FBO SARA MCKEEVER.
At the age of 67 I could feel my heart racing and was trembling all over my body.
The agent finally gave me his supervisor’s name and telephone number. I asked him, “Is she going to talk to me?” His only reply was that he gave me her name and number. I called and, of course, got voice mail. I left a message that this was absurd. It is like telling a customer that they can’t wire money to Bank of America because BofA already has a customer named Premier Realty.
I called Horizon Trust Company and they tried to call the supervisor and, of course, also got voice mail.
After hanging up and thinking about this issue I think I have finally figured out that instead of using Premier Realty’s account number (which would be different from mine as a bank account number would be different at BofA) KCHA must be using the EIN number for Horizon Trust Company and not the account number for Premier Realty when they wire funds. This is the only thing that made any sense and this would indicate that they have the payments set up wrong.
I will do battle with KCHA today and see if this isn't just a misunderstanding. I will report back this weekend. If their illogical concept sticks, however, this is going to be disastrous for any retiree that owns real estate through their Self Direct IRA, and who wishes to rent to Section 8 tenants in Kansas City MO.
Let's not forget that this is going to be a disaster for tenants as well because retirees that own their homes through a Self Directed IRA will not be able to rent to them.