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Paul Andrus: Autonomy = Rental Property Success with a Solo 401(k)

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Paul Andrus: Autonomy = Rental Property Success with a Solo 401(k) 2019-11-08T12:59:17-05:00

Would you call turning a $73,000 property into a $160,000 sale a great return?

Well, what if you were receiving $1200/month renting out that property for 5 years before making that sale?

Would you consider this an unrealistic opportunity? An investment requiring capital that is outside your means?

For Broad Financial customer Paul Andrus, this is nothing more than a natural byproduct of his ability to invest with his Self-Directed Solo 401k.

Paul Andrus is an experienced real estate investor from California who signed up with Broad Financial in 2014. Seeking freedom from the shackles of traditional retirement firms that place restraints on what you can invest in, Paul found that BF’s Self-Directed Solo 401(k) gave him the autonomy to make money the best way he knows how.

After his Solo 401(k) was officially set up in 2014, Paul purchased a condo in Detroit for $73,000 cash using retirement funds that he saw stagnating in the stock market. Over the course of the next 5 years, despite the industrious city’s often negative reputation, he had tenants renting the property out for $1200/month from the moment he gained control of the condo. Aside from a couple months, there was never a period over those 5 years when the condo was not delivering Paul a steady stream of income.

He put this impressive return in succinct terms: “I made a killing on this property.”

That being said, Paul understands this level of success with an investment is more outlier than common occurrence. While he praises the autonomy Broad Financial provides with its offerings, he warns against considering a massive return to be a certainty when signing up.

“Does this mean you’re going to make a great return on every property? No, not necessarily, Broad Financial doesn’t guarantee you your investments. It’s a tool that lets you do what you want, it gives you freedom to make your investments and choices that you otherwise wouldn’t have.”

Already armed with a wealth of knowledge about how to make money in real estate, the advantage that Broad’s Solo 401(K) with Checkbook Control gave Paul resulted in a perfect storm for maximizing profits. The eye-popping numbers of this particular investment may not happen every time, but Paul firmly believes that investing with his Broad account place him in the best position to capitalize when a great opportunity came his way.

Additionally, he asserts that those great opportunities to pad your retirement are not available to you with a restrictive, traditional 401(k), even in the real estate field.

“If you have a 401(k), you’re not given choices to invest in real estate unless it’s some kind of REIT. And those REITs are highly regulated and there’s a lot of fees,” Paul said.

“They don’t perform like this. There’s no REIT in the entire stock market where I would’ve made this return. Not one! So, I’m a big fan [of Broad Financial] because it gives you the freedom to make choices.”

The ability to put their retirement investments in real estate rather than the stock market is an extremely common reason we hear when Broad Financial customers are interested in signing up. Paul is not only a shining example of its validity as an idea, but also one of its biggest advocates.

Paul feels strongly about real estate’s viability as an investment despite the consequences of what any economic downturn may bring. Assets you have tied up in the stock market would almost assuredly take a massive hit, while real estate would be able to hold the fort.

“Rents, I have found, don’t go down. You can have a recession, a ‘Great Recession,’ and rents may freeze but they won’t go down. It may be a little harder to find a tenant, you might have vacancy a little longer but generally you won’t see rents go down.”

By taking a portion of your investments off of Wall Street, Paul insists that you are protecting your portfolio’s overall value and helping to ensure greater success. Frankly, he’s surprised more people don’t know to do this already.

The diversification of your portfolio that is allowed by using Broad Financial is key to making the profits that can balance your other conservative investments. There’s so many people that have so much cash…it doesn’t have to be in the stock market, and a lot of people don’t know that.”

“This is the way you can do it.”

There are certainly many people who are unfamiliar with the concept of self-directed retirement investing. Those who become educated in turn often hesitate to move forward out of fear that this option may be too complicated and over their heads.

This is no doubt an understandable stance to have. Your retirement is extremely important and taking what you perceive to be a risk with it can easily be considered a mistake.

Additionally, self-directed investing is not without its challenges. It is a necessity to follow IRS rules as you go about your investments. That’s why the support your Self-Directed IRA or 401(k) company provides to you is paramount when diving in. Broad Financial excels in this area, and Paul can attest to this:

With questions regarding how to secure a loan for an investment he was interested in, Paul called up Broad Financial seeking the answers he was looking for. The support staff member he connected with informed him that he was actually able to receive a loan from his IRA as long as he made payments on a strict schedule back into it.

Paul found no difficulty in adhering to the directions he received.

“You need to follow the rules very exactly, and [Broad Financial’s] forms say very clearly you have to make monthly or quarterly payments [on the loans]. So it’s kind of like being your own bank at the same time, too.”

Ultimately, Paul enjoys simplicity. Aside from how our support staff can efficiently resolve an issue of yours, Paul appreciates how his Broad account gives him the autonomy to make money exactly how he knows best: real estate. In fact, he urges anyone with a specialty to consider Broad for that very reason.

“I’m a big fan of real estate, but there’s a huge list of things you can invest in. So if you’re a specialist and you work in some other commodity, then you can consider using your knowledge in that industry to make money with [your Broad account].”

As Paul proved with the condo in Detroit, investing through Broad can make a noticeable difference for building up your retirement. The ability to take advantage of what you know best, rather than have your retirement ride on random stocks you have no faith in, is something that you may not be able to afford to pass up.

We sincerely hope you find your home-run investment like Paul’s sooner than later. As Paul will tell you, it may not come as soon as you’d like. Later is ok, he’d say.

Regardless of if it’s sooner or later, Broad Financial will be here to make sure everything goes according to plan.

Custodial or Checkbook Control Plan: Which is Best for You? We Offer Both.

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