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Investor Insights Blog|“Golden Rule” Approach Profits More than Just Retirement

Real Estate

“Golden Rule” Approach Profits More than Just Retirement

For one Missouri family, how they treat their contractors during real estate rehab projects is just as important as the work itself. From a “no swearing” rule to cookies and team lunches, mother-daughter investment duo – Jan and Brittany – take a unique approach to rehabbing in their local market.

“I tell all my contractors it’s really simple to be successful with me,” Jan said, “show up on time, do what you say you’re going to do, and be nice to everyone.”

Jan has used this approach throughout her 29-year career as a real estate rehabber, focusing on high-end homes in the suburbs of St. Louis and Los Angeles.

Though not in the business yet, Jan’s first “rehab” was the starter home she bought with her husband Gary.

The couple purchased a house that was in their budget, but needed a fair amount of work – work she realized she loved doing. The couple renovated the home during the two years they lived there before selling it when the family moved.

“We made more money on the sale than from both our full time jobs,” she recalled.

Using Knowledge and Experience to Drive Retirement Decisions

Realizing real estate’s potential, and the passion she had for rehabbing, Jan became a real estate agent and decided to become a full-time investor.

Years later, after losing an unsettling amount of her 401(k) in the stock market, Jan discovered self-directed IRAs and decided to use her real estate expertise to build for retirement.

“I decided it was time to take control of my IRA…I converted everything (in my retirement account) to a Roth IRA when the account balance was at its lowest.”

Jan was excited about the prospect of using her knowledge and experience to invest for retirement, rather than letting the stock market dictate the outcomes.

“My business is real estate, so I understand it very well,” she says.

“My expertise is in renovating houses — finding properties, hiring contractors, making decisions and selling properties – and I wanted to use that expertise for my retirement investing as well.”

Jan believes simpler is better when it comes to her rehabs. A pen and an envelope are the primary tools she uses. “If I can’t work it out on the back of an envelope, I don’t want it,” she says.

Contractors as Partners – A Novel Approach to Investing

Jan estimates she employs between 20 and 30 people on each rehab and relationship-building is important to her success, in both business and in life.

She focuses more on the character and personal qualities of her employees, believing the trade skills can be managed, learned or improved.

She fosters a positive work-environment, enforcing a strict “no swearing” rule and adhering to the Golden Rule at all times.

Jan uses a partnership model for her projects. She makes the general contractor a partner on her deal, anywhere from a 30/70 partnership to an even 50/50 joint-venture.

Watch: Interview with Jan

“This is a great model for us, not just because of the IRA rules, but because it makes sure our contractor is invested in our deal’s success,” she explained.

In addition to the motivation it provides, this method can help save on costs as well. “For example, every $100 the contractor saves on the rehab, $30-$50 of it is staying in his pocket,” she continued.

“Golden Rule” Approach to Rehabbing and Management

Jan is quick to praise her contractors and has formed a lasting relationship with her general contractor.

“I strongly believe in the Golden Rule – treating your contractors the way you want to be treated.”

This approach is the bedrock for the close friendships she’s formed in her business – with her contractors and the new homeowners.

Jan is the first to empower her employees and celebrate their successes.

“We really like to think of our contractors as the experts,” she says. “They will know more about plumbing, electrical, tile, and roofing than I will ever know – so it’s really important to ask for their input and use their ideas.”

She notices a change in her contractors when implementing an idea they had. Not only do they feel appreciated and valued but are motivated to do a great job implementing their own idea.

“I go out of my way to tell them what a great job they’re doing,” she said. “I tell them in front of their families, my family, and other contractors – anything I can do to encourage them.”

All are Welcome – “Our Project is Your Showroom”

She wants her contractors to be proud of the work they’re doing for her and to feel comfortable showing it off to friends, family, or potential clients.

She encourages her team to think of her projects as their showroom – encouraging their best work and fostering a positive environment.

In particular, Jan fondly remembers what this meant to one of her tile layers. “He did such a wonderful job adding ornate tile to the kitchen, bathroom, fireplace, and even on the home’s exterior,” she remembers.

“So I encouraged him to bring his family and friends to see the results” she recalled. Surprised by her offer, he responded that no one had ever offered him this opportunity.

“It was the first time his children had ever seen his work, and they were teenagers at this point,” she remembered. “It’s grown into such a valuable relationship now. He knows we appreciate him and he appreciates us.”

This family atmosphere is something that’s important to Jan and her projects. Her family often brings lunch to the work site so the entire team can sit down and eat together.

Empowering the Next Generation – Mother-Daughter Duo

Jan’s refreshing approach to managing her employees is one we hope to see emulated throughout the industry and beyond. But she is also interested in helping others find similar success.

I’m passionate about encouraging women and children to become entrepreneurs and get involved in investing.

Jan, Real Estate Investor

First in line is Jan’s daughter, Brittany, who’s been helping her mother from an early age. What started as licking stamps and stuffing envelopes has evolved into a full-scale partnership.

Since the age of 13, Brittany has partnered her Roth IRA with her mother and father’s accounts to complete various rehab projects.

“I do what I do for freedom,” Jan says, “and I want Brittany to have that same freedom even sooner than I did.”

Family and family values have been at the heart of Jan’s rehabbing success for over 29 years.

The impact she makes in the community and in the lives of her employees is an inspiring approach to a business often full of “contractor story nightmares.”

“I hear so many nightmare contractor stories from people in real estate and I’m happy to report, I don’t have a single one to share with you,” she says.

Based on the “Golden Rule” approach she shared, this certainly does not come as a surprise.


Can my IRA purchase real estate that I currently own?

No. This is considered a prohibited transaction (see IRC 4975). You may not purchase a property, or interest in a property, that’s currently owned by a disqualified person, which includes yourself.


If I invested in a rental property with my IRA, how does the rental income get into my account?

The fastest way to receive rental payments is via ACH direct debits using the Online Payment Center, where tenants and property managers can easily submit payments to Equity Trust accounts.

Rental payments can also be sent to Equity Trust for the benefit of (FBO) your IRA. The checks or money order should be made payable to: “Equity Trust Company Custodian FBO [Your Name] IRA [IRA Number].”

Once received, the checks or money orders are deposited into your IRA. All checks must be sent to Equity Trust with a payment coupon.


Am I restricted to only purchasing residential property with my IRA?

You are not limited to residential real estate. Your IRA can hold various investment properties such as commercial buildings, vacant land, condominiums, mobile homes and apartment buildings, in addition to residential property.

Case studies provided are for illustrative purposes only. Past performance is not indicative of future results. Investing involves risk including possible loss of principal.

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