Helping Veterans – and a Friend – with a Creative IRA Investment

By Keith Blazek3 Comments

It’s possible for self-directed IRA investors to make a meaningful impact in the lives of others – as seen in the origins of the Building Veterans ministry – proving it’s possible to build wealth and impact communities.
Roger, an Equity Trust client from Maryland, used his IRA to support a cause near to his heart and impact the lives of American veterans, while also helping his financial future.

He used his self-directed IRA to “give life to a ministry in the town of Brunswick, which has had trouble growing – not so much for a great financial return.”

Roger’s friend, Bob, is a pastor and Vietnam veteran who dreamed of creating a ministry for vets, particularly those returning from Iraq and Afghanistan. Many veterans unfortunately suffer from post-traumatic stress disorder (PTSD) and struggle with their adjustment back to civilian life.
Bob’s goal was to establish a ministry that provided veterans housing and spiritual guidance as a form of therapy and community-building. Who better to help these vets than fellow veterans who used to, or currently are, facing the same challenges? His ministry also provides skills training, such as carpentry and construction, as a way to help the vets find meaningful and gainful employment.

IRA Capital Helps a Dream Become a Reality

Roger helped his friend Bob find an ideal property to start the ministry. Although needing significant repairs, the bank-owned property was priced well and seemed like the perfect fit. It was a large 1920’s house with 5 bedrooms and a sizable kitchen and dining room. The property also included a second building which would later become a workshop and skills-training facility.
In an unexpected twist, the bank financing fell through at the last minute, jeopardizing the earnest money deposit Bob had placed on the home and potentially hindering his ability to close on another house.
Bob feared his dream would not come true.
In stepped Roger, who provided a $100,000 loan from his retirement account to help Bob acquire the property and begin his ministry. The 6-percent interest he received was funneled back, tax-deferred, into his IRA.

The Start of Building Veterans

Bob soon found several veterans to live in their newly acquired home and, together with the vets, the team renovated the house (Roger could not help with the labor – per the rules pertaining to self-directed IRAs). The renovations allowed Bob to refinance the house and repay the initial loan back to Roger’s IRA. The newly renovated house was now ready to accept the ministry’s first residents.
Although a modestly profitable retirement investment, Roger concedes that the real payback was making the Building Veterans ministry a reality.
“If I wasn’t able to step in and use my self-directed IRA funds as the initial financing for the house, the whole thing could have fallen through,” recalls Roger. “If they had to go to a hard money lender, those terms are pretty onerous and may have been around 15 to 20 percent.”
As it was, Roger was able to help a friend, his retirement, and facilitate a project with a palpable impact in the local community and the lives of American vets. Thanks to his investment, a friend’s lifelong dream was fulfilled and at least 10 veterans are receiving guidance and support as they transition back to civilian life. The ROI of Roger’s investment goes beyond dollars and cents; it has changed lives.
The above case study is for educational purposes only. Past performance is not indicative of future results. Investing involves risk, including possible loss of principal. Information included in the above case study was provided by the investor and included with permission. Equity Trust Company does not independently verify all information provided by third parties.