Married 26 years, Denise and Bill Graves have spent the past year working side by side at Boerne, Texas-based The Graves Group.
“I started out doing 1031 exchanges, so that was the push initially,” says CEO Denise. She’s a luxury real estate broker, who founded The Graves Group as an extension of Bradfield Properties in 2002. “We brought Bill onboard full-time last year, because we found that the five of us had a need for someone to look for an alternative to a 1031.”
Enter Bill Graves. At 55, Bill has logged 25 years as a real estate broker in the San Antonio, Texas, 
area; 20 years in retirement planning, including working with IRAs and 401(k)s; and 17 years as a certified financial planner.
His solution? Tax-sheltered real estate investing using self-directed Individual Retirement Arrangements.
It was a seamless addition, given that Bill had been investing in real estate using his own SEP IRA since late-2003. “I wanted to start use it for personal benefit – to test the waters first – and then start helping my [retirement planning] clients with their untapped IRA money for real estate investments,” Bill says. “They may have personal residences, one to three vacation homes, and are tapped personally. What this does is open up a whole new pool of funds for real estate investment activity.”
In October 2006, Bill also joined a consortium of financial professionals at Asset Exchange Strategies. It’s one of dozens of organizations cropping up to train and “certify” agents and advisors in self-directed IRA investing rules and strategies.
“Since then our business has been 90 percent traditional real estate transactions and 10 percent IRA based,” Bill says. “Over the next year I forecast that to be more of a 60:40 split. The website is up, the relationship with AES is established, and now I’m starting to advertise. Before it was word of mouth; now we actually have a viable status.”
The new division has helped make The Graves Group the “No. 1 sales team in the Texas Hill Country,” as ranked by the San AntonioBusiness Journal. In 2006 it logged $40 million in sales volume, and in the first half of 2007 another $19.3 million.
With “a few” self-directed IRA purchases for clients under their belt, they’ve discovered that “the process doesn’t seem to be a whole lot longer on the ones that we’ve done than the regular loan process,” Denise says. “We coordinate with Bill to set everything up, but everything else is the same. It’s streamlined once everything is in place. It just takes an expert, just like in any other specialized transaction, who knows what they’re doing.”
Working with self-directed IRAs also has opened up The Graves’ Group’s opportunities.
“The way real estate is set up, if you don’t look at more creative ideas you’re limited on what you can own by yourself and receive a tax deferral on,” Denise says. “As we become a more sophisticated society, people want more options. The baby boomers are getting older, and looking for something to push the tax crunch farther and farther out. This becomes a great option, especially when done with a Roth that doesn’t require withdrawals. It makes another piece to the whole puzzle.”
And how about bringing Bill into the team to facilitate those IRA investments?
“I wondered how it was going to work out,” Denise says. “But everyone does their own individual business and we come together as a group to advertise and brainstorm and address problems (five heads are better than one). There’s not a down side to it. It’s been a real plus.”
To read more with Bill Graves, see Ms. Meacham's "Real estate-related revenue streams" post.
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| Jennifer D. Meacham, Gather Money Correspondent | ||||
Jennifer's column, "The Bottom Line," is published every week to the Gather Essentials: Money channel. Jennifer covers money matters for RedwoodAge.com and self-directed retirement account investing for RISMedia. She's co-author of the best-selling retirement investing guide "IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment" (Square One Publishers, New York). Keep up on the latest news and analysis into how you can take control of your business and personal financial future by joining Jennifer's "Self-Directed Investing 101" network. | ||||
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Comments: 6
My best advice is to never invest in anything you don't fully understand. Always seek the independent advice from a good accountant, financial planner or tax lawyer.
Someone with a legitmate invstment opprotunity would enocurage a potential investor to seek independent advice and will never pressure you to "buy now or regret it forever." If that's the case, then run for the hills.
Independent advice is important, look at how many people went out and got bad mortgages without the advice of a good accountant or real estate lawyer. These folks are paying the difference now. Indepenent advice is always the order of the day when investing, anything with potential tax implications or in making a major purchase like real estate .
I would like to respond to directly to your first paragraph. Investing self-directed Individual Retirement Arrangements isn't a crowd thing (at least not yet). That is unless you consider less than 4 percent of the trillions held in U.S. retirement accounts "a crowd." ; )
The challenge arises in that sometimes your independent advisors can be wrong. In the field of self-directed IRAs, for example, there are still financial planners and estate attorneys who errantly believe that investing in real property, without cashing out, is not allowed. Hence, that's when the journalists can hopefully step in to fill the information gap. I'll continue to cover these and other self-directed investing issues in The Self-Directed Investing forum here on Gather.