Finding Inspiration in the Faces of Young Children: A Neighborhood is Reborn

Life has a way of coming full circle. Decisions and experiences, even those decades in the past, often sprout and bear fruit later in life.

This concept is demonstrated in the story of one Georgia investor, Brian, who walked away from a successful career and toward a poor neighborhood in Montgomery, Alabama where he felt he could make a difference.

The drive that led Brian to Montgomery was born in the same place he was, one that he graciously describes as a “very rough neighborhood.” Long ago, Brian decided to use his experiences as fuel instead of allowing them to be hindrances, going on to earn an undergraduate degree in Architecture & Civil Engineering as well as a MBA in Finance & Strategic Marketing.

Brian recalls that, when he grew up, the prospect of making $30,000 a year was a very good living. When he later went into the business of constructing commercial locations nationwide for a large U.S. corporation, he aimed to never take his success for granted.

Finding a Calling in Real Estate

He began to explore other options for the 401(k) funds he’d accumulated. He discovered that a self-directed IRA would allow him to invest in not only real estate, but promissory notes and other alternative investment options as well.

Some would say Brian found his calling in real estate, even if it wasn’t exactly a recent discovery. Brian was involved in real estate for over 15 years, except he was previously acquiring, constructing and developing real estate for large companies.

While successful in his career, Brian said the work failed to satisfy his entrepreneurial spirit and desire to make a difference in the lives of other people. He felt he was destined for something more. Brian decided to leave his career behind and begin anew. From this point on he’d be doing it for himself and the real estate firm he led.

Brian recalls, “I had experience in real estate from my job in the construction of mixed-use retail complexes as large as 500,000 square feet, but it’s completely different when it’s your IRA on the line.”

His first investment was wholesaling a small mobile home in Georgia. Shortly thereafter, Brian received a call from an out-of-state investor in his network who informed him of a 24-unit apartment in Montgomery, Alabama available for less than $100,000.

“I was curious to check out the apartment, but I wasn’t sure I would ever move forward,” he remembers.

Brian recalls thinking, “twenty-four units at less than $5,000 per door was certainly worth the two hour drive to learn more. I had previously spent thousands of dollars on my college education, so a tank of gas to see a project like this was a simple decision.”

Upon arrival, Brian stared at a grim concrete building – overgrown by weeds and decorated with boarded-up windows. Brian spoke of how he felt when he first stepped foot inside, “When I opened the doors, it wasn’t a pretty picture,” he recalled. “The building was abandoned for quite some time and was in serious disrepair.”

School Bells Ring and Life Comes Full Circle

At first sight, Brian understood the dangers that this neighborhood, and others like it, could pose to America’s children. However, it didn’t quite resonate until he heard the sound of bells ringing.

“I hadn’t realized what time it was,” he said. “I heard bells ringing but I didn’t think about school getting out.”

As he exited the property, leaving the uncovered chaos behind, he was stopped in his tracks by the sight of two little girls walking home from school. The girls were completely oblivious to the blighted location, and potential dangers that could come from it, across the street.

This image would forever be burned into Brian’s mind; the moment he saw these two little girls, only slightly younger than his own daughters, walking before him.

The interesting opportunity brought by this apartment complex caught his attention, but now he had a reason. “I felt I couldn’t leave that apartment building vacant and risk it remaining untouched,” he said.

Brian spoke of how he felt once he’d made the momentous decision. “I had never been more certain about anything in my life. I knew it had to be done,” he recalls.

Leaning on Past Experience and a Financial Background

“I was embarrassed to tell anyone about what I was doing,” Brian admitted. “After all, who in their right mind quits a good job? But I felt all my past experiences and education prepared me for this moment,” he said.

He was new to the concept of self-directed IRA investing and refused to begin this new project blindly. He spent countless hours learning everything from the self-directed IRA investment process to the paperwork required.

“It was like estimating the cost of the retail stores, but on a smaller scale,” he said. “I knew what was good and what was not and knew where I could acquire a good price.”

A “Pre-hab” Shows the Potential for a Prospective Buyer

Eventually, Brian used his IRA to fund a newly formed LLC. The LLC managed to complete a $40,000 “pre-hab,” as Brian called it, including maintenance and repairs designed to clean up the property and allow potential investors to envision the building’s potential.

Brian remained active in the market. He later structured a note with seller financing, eventually selling the note to an investor able to finish the rehab and tenant the units. Brian also purchased a piece of land near the apartment with another Equity Trust qualified retirement account. The land would serve as a parking lot, since the complex didn’t have one at the time.

Community Comes Together – Improving the Path to School

In addition to Brian’s investment, a local church purchased another boarded-up building and renovated another area near the school. The neighborhood with multiple abandoned buildings is being reborn.

Brian’s path is unique, but he reiterates that this is not a recommended blueprint for other IRA investors. He hopes people are inspired by the results, but also acknowledges it wasn’t easy to achieve and required every ounce of his knowledge and experience.

Fast forward to today, and Brian isn’t just the man who quit his job to make an investment. He now leads a real estate development firm in Atlanta and is actively involved in his community.

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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.