Meet Dave Shaw: Successful Real Estate Investor

Dave Shaw, a successful real estate investor, explains how he invests and builds retirement wealth using a self-directed IRA.

My wife, Mary, and I invest our retirement savings using a self-directed IRA with Advanta IRA. We use these funds to invest in real estate assets, specifically mortgage notes, rental properties, and rehab-and-flips.Dave Shaw, Successful Real Estate Investor

Why do we like self-directed plans? We like having control over our own investment decisions.

When our savings were held in an investment account acquiring stocks and bonds, we had input but no real control. When something major happened in the stock or bond market, it had ALREADY happened!

Any action on our part was after the fact. As the adage says, hindsight is 20/20. If only we had known about the power and functionality of self-directed IRAs a long time ago!

A Self-Directed IRA Changed Our Game

Putting your own expertise to work can enhance potential success. Ups and downs can happen in the housing market, too. However, when you self-direct and YOU choose your investments wisely and make your decisions based on what you know and understand, you can mitigate the impact on your portfolio.

For instance, I have 14 years of experience as a Certified Property Appraiser. I am also an active real estate agent and appraiser in the Tampa Bay area. That knowledge gives me an edge in making real estate investments. I capitalize on my experience when determining investments in our self-directed IRA.

Private Lending Assets are a Favorite

One area Mary and I are successful in is using our self-directed funds to make investments in first position mortgage notes. These assets have attributed to the growth of our retirement income.

Our process involves researching the individual wanting the loan, evaluating the property potential (upside) and then determining our degree of investment. Our IRA normally extends loans at a 65-75 percent loan-to-value of the after repaired value (ARV). The IRA is paid interest monthly or at the sale of the finished home at 12-15 percent. The borrower pays all closing costs, including Advanta IRA’s fees. Additionally, our IRA makes loans on a profit-sharing basis, where a slightly lower interest rate is charged, but shares a percentage of the net profit at sale. 

The major intangible benefits of investing in real estate are realized by making a positive impact in neighborhoods by improving them through rehab-and-flips. Also, we are able to help some people dig out of a financially bad situation and assist others in achieving their dream of buying a better home they can afford.

Yes, We Perform Proper Due Diligence!

One thing to note: in the business of real estate investing, everyone talks about “deals,” inferring a good or better than average opportunity.

Investment opportunities are NOT “deals” until YOU do your due diligence and determine it is, in fact, a deal for you to invest. Due diligence is critical to ensure your investment funds succeed. Make sure the venture is worthy and has the potential to produce the returns you desire. It is also crucial to fully vet all persons involved in your acquisition—from borrower to real estate agent to any other person relevant in your decision making process. While there is absolutely no sure-fire way to guarantee success, due diligence increases your chances of being successful and decreases your margin of error or miscalculation.

Thanks to Advanta U, I Am a Self-Directed IRA Specialist.

I am a proud graduate of Advanta IRA University (Advanta U) where I earned the designation of Self-Directed IRA Specialist. Advanta U is a specialized program geared towards investors who want to become more knowledgeable in the world of self-directed IRAs. Advanta provides free courses for this purpose. The curriculum is interesting and exciting and has helped me understand the benefits and risks of self-direction.

Want to Connect?

Attend an upcoming lunch and learn on October 17 I’m speaking at in the Tampa area office of Advanta IRA. You’ll learn how I use my knowledge to invest in rehab-and-flips with my IRA.

I am more than happy to discuss any questions readers may have regarding self-directed IRAs and how they have helped us build a tidy nest egg for retirement. Real estate investments are our passion and we enjoy meeting and helping like-minded investors and sharing our secrets.

Dave Shaw invests in Pinellas County in Florida, Iowa, and Minnesota. He can be reached at 563-419-4558, 813-720-7907 or via email at [email protected].

This guest blog was originally published in 2014 and has been updated for accuracy. October 2017