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2022Self-Directed Real EstateMarket Report: Where and How Equity Trust Clientsare Investing in Real Estate

2022 Self-Directed Real Estate Market ReportDespite continued economic uncertainty, real estate remains a solid investment for those looking to hedgeagainst market turbulence or invest in something they can better control. Better still, investing in real estate insidean IRA or other retirement account provides tax advantages, allowing investors to keep more of their profits.This is not new to Equity Trust clients, some of whom have been achieving financial freedom with alternativeinvestments for decades. The 2022 Self-Directed Real Estate Market Report shows how and where our industriousclients grew their wealth with real estate and what other investors can learn from them.In this report, you’ll discover: States with the highest and lowest purchase prices in 2021 Hottest markets for out-of-state buyers How home prices have trended over the years for Equity Trust investors vs. the national average Whether investors prefer rehabs, rentals, or flips as their go-to strategy Much moreIn some cases, you’ll find data spanning as many as 14 years to provide a fuller picture of self-directed real estateinvesting trends and help you prepare for what’s to come.Real Estate Investing in Your IRAReady to learn more about how self-directed investing could fit into your retirement planning? Visit TrustETC.comor call (888) 382-4727 to start a conversation with an IRA Counselor.About This ReportThe Data in the Self-Directed Real Estate Market Report was aggregated from information provided by EquityTrust clients as of December 31, 2021. Where noted, the data spans from 2009-2021. The information is intendedfor educational purposes only.

Contents2022 Self-Directed Real Estate Market Report2Real Estate Purchases by Month: 2021 vs. Past Years45Real Estate Purchases by Region: 10-Year Trend6Where are Equity Trust Investors Purchasing Real Estate? Top 3 States 7Where are Equity Trust Investors Purchasing Real Estate? Top 10 States 11Client Real Estate Purchases in 2021: By Region12Out-of-State Real Estate Purchases – 2017-202113Out-of-State Purchases: Past 10 Years14Real Estate Strategies by Region 15Out-Of-State Real Estate Investing Purchase Price by Region 16Purchase Price per State - Top 1021Purchase Price per State - Bottom 1022Average Purchase Price by Year23Partnering to Purchase Real Estate 24Notes Secured by Real Estate About Equity Trust Company2526

Real Estate Purchases by Month: 2021 vs. Past Years450Reboundingfrom 2020Equity Trust clients’ total realestate purchases in 2021remained above 2020 levelsfor the most part, with as manypurchases completed in Marchas any other recent AugSepOctNovDec4

NORTHEASTClient Real EstatePurchases in 2021South Continues PopularityGrowthMore than half of Equity Trust clients’ real estatepurchases took place in the Southern UnitedStates in 2021, an increase from 47 percent in2020.The Midwest and Northeast showed slightdecreases from the previous year while theWest’s share of activity slightly increased.MIDWESTWEST16%8%23%SOUTH53%5

Real Estate Purchases by Region: 10-Year TrendWest2012South2013Northeast2014MidwestWest: 20.43%South: 46.19%West: 18.93%201620172018West: 14.26%2019West: 13.97%202020210Midwest: 28.36%Northeast: 8.73%South: 47.37%Midwest: 27.22%Northeast: 8.12%South: 52.89%40Midwest: 26.83%Northeast: 9.27%South: 48.40%20Midwest: 24.71%Northeast: 9.36%South: 49.55%West: 15.75%Midwest: 29.23%Northeast: 9.34%South: 48.03%West: 16.68%Midwest: 26.86%Northeast: 8.30%South: 45.76%West: 17.92%Midwest: 25.77%Northeast: 10.43%South: 47.35%West: 16.71%Midwest: 26.06%Northeast: 10.49%South: 46.39%West: 15.36%Midwest: 25.04%Northeast: 7.79%South: 47.21%West: 17.34%2015Northeast: 8.34%60Midwest: 23.25%801006

Where are Equity Trust InvestorsPurchasing Real Estate?A Closer Look at the Top Three States7

Where are Equity Trust Investors Purchasing Real Estate? A Closer Look at the Top Three States 1FloridaFourteen percent of all Equity Trust clients’ IRAreal estate purchases in 2021 were in Florida.CASE STUDY:Teacher Grows Portfolio, Creates Memorieswith Florida Vacation RentalRead Now8

Where are Equity Trust Investors Purchasing Real Estate? A Closer Look at the Top Three States 2TexasNearly ten percent of all Equity Trust clients’ IRAreal estate purchases in 2021 were in Texas.CASE STUDY:Alan from Texas shows it’s never too late to beginself-directed investingRead Now9

Where are Equity Trust Investors Purchasing Real Estate? A Closer Look at the Top Three States 3OhioNine percent of all Equity Trust clients’ IRAreal estate purchases in 2021 were in Ohio.CASE STUDY:Wall Street Journal Shines Light on Self-DirectedReal Estate Investors and a Fix-and-Flip Hot SpotRead Now10

Where are Equity TrustInvestors PurchasingReal Estate?Top 10 States — Percentage ofAll Client Purchases in 2021MICHIGAN3%9%4%CALIFORNIA6%PURCHASES PREVALENT IN SOUTHEAST, MIDWESTThese states are where the most real estatetransactions took place in our clients’ accounts in2021. The same 10 states — many of them in theSoutheast and Midwest — made the list in 2020.OHIOINDIANATENNESSEEN. CAROLINA3%6%S. CAROLINA3%GEORGIATEXAS5%10%FLORIDA14%11

Out-of-State RealEstate InvestingWA12%OR27%Percentage of Properties inEach State Purchased by NonResidents — 2021How does this compare to the trend over time?See the next page for out-of-state purchasesover the past five years combined.ID48%NV52%Some Equity Trust self-directed real estateinvestors who are priced out of their local marketor have knowledge of other markets in the countryfind success investing in rentals or fix-and-flipsoutside their home state.CA42%MT47%AZ42%MN14%SD50%WY78%UT47%NH 43%VT 2%PA20%WV38%MS50%AL45%MA 44%RI 14%CT 50%NJ 11%DE 29%VA15%MD WI22%ME67%GA25%SC32%FL37%HI54%12

Out-of-State RealEstate Purchases —2017-2021WA16%OR25%Real-Life Real Estate: LongDistance InvestingMichigan resident Arnold purchases a beachhouse in South CarolinaLaurel of Colorado purchases condos in NorthCarolina*Based on percentage of investment purchases 2017-2021ID52%NV58%These maps show that not only is it possible tobuy investment properties outside of your homestate, but many investors are using this approach.Here are case studies illustrating how two clientsnavigated the investment from out-of-town.CA30%MT31%AZ40%MN15%SD53%WY43%UT23%NH 31%VT H17%IN39%PA21%WV36%MS42%AL36%MA 33%RI 15%CT 24%NJ 34%DE 36%VA14%MD 21%ME60%GA21%SC29%FL30%HI73%13

Out-of-State Purchases: Past 10 YearsSee which states have experienced more out-of-state interest from self-directed investors over the past 10 years,as well as the states seeing a decrease in buyers from across state lines.Biggest Increases in Out-of-State PurchasesBiggest Decreases in Out-of-State PurchasesStateDifference in out-of-state buyers for 5 yearsending 2021 vs. 5 years ending 2017StateDifference in out-of-state buyers for 5 yearsending 2021 vs. 5 years ending 2017New Mexico42%Connecticut-60%South Arkansas-20%California9%West Virginia-18%North Dakota8%Iowa-15%Vermont7%Delaware-15%South Carolina5%New York-12%14

MidwestReal EstateStrategies byRegion *A flipped property is defined as a property held for lessthan 1 yearBUY & HOLD45%FLIPPED PROPERTY22%RENTAL31%BUY & HOLD51%FLIPPED PROPERTY18%RENTAL29%BUY & HOLD56%FLIPPED PROPERTY15%RENTAL28%BUY & HOLD51%FLIPPED PROPERTY21%NortheastWhat are clients doing withtheir investment properties?In all regions, a majority of clients are rentingtheir investment properties, receiving cashflow to their IRAs or other accounts. By usingtheir IRA, these investors receive an addedbenefit: gains are not taxed when held in aretirement account.RENTAL33%WestSouth15

Purchase Price by Region 16

NortheastAverage Purchase Price 107,000Median Purchase Price 72,500Average Purchase PriceMedian Purchase PriceRentalProperty 136,000 57,000FlippedProperty 83,000 65,000Buy & HoldProperty 100,000 79,00017

MidwestAverage Purchase Price 78,000Median Purchase Price 57,000Average Purchase PriceMedian Purchase PriceRentalProperty 79,000 54,000FlippedProperty 71,000 59,000Buy & HoldProperty 83,000 59,00018

SouthAverage Purchase Price 131,000Median Purchase Price 81,000Average Purchase PriceMedian Purchase PriceRentalProperty 161,000 117,000FlippedProperty 127,000 69,000Buy & HoldProperty 117,000 67,00019

WestAverage Purchase Price 141,000Median Purchase Price 76,000Average Purchase PriceMedian Purchase PriceRentalProperty 207,000 155,000FlippedProperty 135,000 71,000Buy & HoldProperty 111,000 56,00020

Top 10 StatesPurchase Priceper State Where did clients pay themost for properties in2021? For a third year, Hawaii tops the list.StateMedian 2021 PurchaseHawaii 301,000District of Columbia 253,000Utah 208,000Washington 188,000South Dakota 169,000Vermont 168,000Arizona 151,000Massachusetts 129,200Wyoming 129,000Rhode Island 125,00021

Bottom 10 StatesPurchase Priceper State Where did clients pay theleast for properties in 2021? These median purchase prices showit doesn’t take a six-figure retirementaccount balance to get started in selfdirected real estate investing.Read:How Real Estate Investors can Beat theCompetitionCurious about real estate investingconcepts that don’t require a lot of capital?Check out this video:Investing in Wholesale Properties and RealEstate Options with a Self-Directed IRAStateMedian 2021 PurchaseNew Jersey 25,000West Virginia 31,000Louisiana 33,400Alaska 33,500California 39,000New Mexico 40,000Arkansas 45,000Iowa 46,000Michigan 47,000Nebraska 50,00022

Average Purchase Price by Year: Equity Trust Clients vs. All National Purchases 500,000 480,000 460,000Purchase Prices NearlyMeet Pre-Recession Level 440,000 420,000The increase in our purchase pricesin 2021 puts our clients’ averagepurchase price within striking distanceof 2008 prices for the first time. 400,000 380,000 360,000 340,000 320,000 300,000How This Compares toNational Trends 280,000 260,000 240,000Compared to the median home priceof all U.S. real estate purchases, EquityTrust clients are generally findingsignificantly lower-priced real estateinvestments. 220,000 200,000 180,000 160,000 140,00019.9% 120,000 100,000Equity Trust 80,000 .3%2.9%6.3%2016201713.3%4.3%5.29% 40,000 e: Zillow median sale price data.23

Partnering toPurchase Real Estate:A Family Affair For various reasons - not enough capital, notwanting to tie up too much of their accountbalance - many clients turn to partnering (coinvesting their account with other sources) tomake an investment. It’s possible to partner anycombination of Equity Trust accounts, withinthe same household or not: for example, twoIRAs, an IRA and a CESA, etc.In 2021, more clients turned to their ownhousehold’s accounts to partner: 62 percent ofthose partnering accounts did so with membersof their own household or other accounts theyown, vs. 34 percent in 2020.While some partnered three or four accountsfor their investment, the majority co-investedwith two accounts.Partnering:Household vs. Non-Household AccountsHOUSEHOLD - 63%NON-HOUSEHOLD - 37%Number of AccountsPartnering for Investment2 ACCOUNTS - 83%3 ACCOUNTS - 7%4 ACCOUNTS - 9%5 ACCOUNTS - 1%24

Clients See ReturnsFrom Passive RealEstate ApproachA more hands-off approach to real estate is loaningmoney to other real estate investors, also known asnote investing. Here’s a look at the percentage ofreturns our clients receive from their real estate-backednote investments.Overall Median Note Purchase Pricein 2021: 69,300 Notes Secured by Real Estate:Interest Rates Received 2021Interest Rates% of Total10% 37%5% - 10%57%Under 5%6%25