Lorraine and her husband, Richard, accelerated their path to retirement when they began investing in real estate in their self-directed IRAs. Their investments helped a local economy hit hard by the recession and continue to inspire their children.
In 2008 and 2009 their Florida community was wrought with foreclosures. Lorraine and Richard saw opportunities in buying foreclosures as investment properties with their self-directed IRAs.
Because of the downturn, they had no trouble finding available service providers to make repairs on their properties.
“Nobody was hiring anybody,” Lorraine says, “And so we met air conditioning guys, builders, and painters. We kept them in business in a lot of different ways. You cannot do (the work) yourself, because it’s in an IRA.”
Lorraine and Richard still work with these companies. And even though business is booming now, the service providers still remember how the couple kept them afloat during tough times.
“When we call, it’s always, ‘Hi, Lorraine. How’s Richard?’ and, ‘Yes. I’ll go do that tomorrow or today.’ They can tend to drop wherever they are doing, like the tiling person and the air conditioning person. They just have always had our backs, basically, because we helped them out when they needed the business.”
Lorraine and Richard were also sympathetic toward renters during the downturn.
“Because they were foreclosed on – and these are decent people who just bought at the wrong time – ¬¬ we would keep the rent exactly the same for up to five years, as long as they maintained the houses,” Lorraine says. “That ended up being a really good relationship for the longest time.”
Financial role models
Self-directed investing has enabled the couple to spend more time with their four children, who have graduated from high school.
“Because of the way we structured everything, Richard was only 48 when he retired,” Lorraine says. And so through their teen years, we’ve actually been able to be around and look after them.”
Their investing has inspired their children to want to grow their wealth as well.
“They’ve watched,” Lorraine says, adding, “They want to do the same things. And so they’re looking into, ‘Where do I put my money to build it up?’”
Lorraine tells her children what she tells other investors looking to get started.
“You start off small,” she says. “You don’t have to make a million dollars overnight.”
Lorraine is not shy about talking to skeptical people how they’ve successfully invested in real estate with their IRAs.
“I meet people to this day, and they say, ‘I’ve gone to a couple of meetings, but does it really work?’ I think that’s what happens to a lot of people,” Lorraine says. “They don’t think it’s going to really work, so you have to plunge in and then find out, yes it does and that, within five years, we could retire. We went from working 60 to 70 hours a week to retirement in five years because of self-directed IRAs and Equity Trust.”