Investing in His Rural Neighborhood Earns Ohio Man the 2016 Self-Directed Investor of the Year Award

Over the past five years, David watched as several homes in his rural neighborhood of southwest Ohio succumbed to foreclosure. He followed the recent activity as a resident, but it also piqued his interest as an investor.

In particular, David was intrigued by the house across the street from his own 54-acre farm after the previous owners, friends of his for more than 20 years, passed away.

At that time the property was acquired by someone else, but David kept his eye on the property and waited patiently for a few more years – hoping he’d have another opportunity to purchase the home.

Patience and Timing Fall into Place

Beginning in the summer of 2016, several factors converged that would lead David to complete his first self-directed IRA investment – one that would earn him Equity Trust’s 2016 Self-Directed Investor of the Year Award.

After several years monitoring the property’s status, David discovered it was near foreclosure and saw his opportunity to make a private offer to the current owner. He described market volatility in the summer of 2016 as the deciding factor for him to look into purchasing the property with his retirement account.

“I watched my stock go down considerably that day (the day of the Brexit vote) and grew concerned about the level of volatility in my portfolio, especially now that I’m 50 years old,” he says. “I wanted to diversify a portion of my retirement savings outside the market and it just so happened that this opportunity appeared.”

David then asked his 401(k) custodian about purchasing real estate with his retirement funds and they provided a phone number for Equity Trust.

“Living in Ohio, I knew there was a company in Cleveland that would allow me to do this,” he recalls. “So I started researching and asked friends and associates in the Cleveland area for more information about Equity Trust.”

– David

He decided to visit the Company headquarters and met with a Senior Account Executive to set up his account and rollover funds from his 401(k).

Personal Knowledge, Homework, and a Team of Professionals Help Set the Stage

David was familiar with the property, having lived across the street for more than two decades. “I knew the house intimately and knew the man who built it, so I had a good understanding of the property,” he says.

David admits there were emotions involved, including his desire to help clean up his neighborhood and improve a nuisance property. “There’s a tremendous amount of foreclosures in this area,” he says. “I just imagined if this house was foreclosed upon that I would be looking at it every day and be pretty powerless.”

However, he guarded against an emotional decision by taking his time to perform his due diligence and working with a trusted team of professionals.

“I did my homework,” he says. “I watched other houses sell in the neighborhood to help estimate my bid price and took a lead from a delinquent tax report in the local paper to identify just how underwater the current owner was.” He discovered the current owner owed approximately $77,000 in back taxes and liens.