- Self-Directed Accounts
- Investment Types
- Why Equity Trust
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Real Life Examples
As soon as Brad from Indiana heard about self-directed IRAs at an Equity Trust educational event in his area, he recalls, “I was hooked. It was really a no-brainer.”
Brad learned at the seminar that self-directed IRAs allowed him to use his retirement funds to invest in alternatives to the stock market such as real estate, raw land, promissory notes, and tax liens, to name a few. He immediately opened an account after the event and set out to learn as much as he could about alternative investments, specifically tax lien auctions.
After watching webinars and researching on the internet, he decided he would attend his first county tax lien sale. In his first Equity Trust self-directed investment, Brad netted approximately $92,000.
“I had done a lot of research before the sale and flagged this particular property as something I was interested in,” he says, adding “The land that was up for sale was on a very busy street next to a major hospital in Indianapolis.”
“If you do your homework correctly, you can mitigate your risk and make some good profit.”
Brad, Investor, Indiana
He found that roughly 15,000 to 20,000 cars drove by the property on a daily basis and knew that if he was patient, it would interest a commercial developer seeking a prime location with steady traffic.
Brad purchased the lien on the half acre of vacant land for $823.71 in his IRA and sat on it until the one-year redemption period expired. His IRA was then awarded the deed title by rules of Indiana State Law. Because he only invested around $800, he could afford to hold the property until the right offer came along.
Two years later, it did. Brad’s IRA sold the property to a medical office developer who needed his land for additional parking for their building next door. It sold for $97,500 – over an 11,000 percent ROI.
Brad remembers, “There was definitely a little learning curve when trying to learn how the process works and make sure the paperwork is acceptable.” Equity Trust’s dedicated investment liaisons helped smooth out this process for him, and now he says he has a good feel for the process but takes solace in the fact that the liaisons are there when he needs them.
The success from his first deal has inspired Brad to make tax liens his specialty. “It’s not the most popular or well-known strategy” he says, “but something I can invest in with very little cost and, if you do your homework correctly, you can mitigate your risk and make some good profit.”
Brad’s advice to fellow investors is to “keep it simple. Sometimes the simpler strategies work better than the real advanced ones. If things make sense and you’ve done your homework, you’re probably making a good decision.”
Brad is a shining example of a client who was a beginner when it came to the world of investing in alternatives, but has done his homework and found success in his first self-directed investment. He’s excited to put that newfound knowledge to use with future investments.
What investment options are possible with an Equity Trust account?
Can my IRA purchase real estate that my corporation, partnership or LLC owns?
Case studies are provided for illustrative 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.
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