By Jennifer D. Meacham
RISMEDIA, Oct. 22, 2007-When it comes to self-directed real estate investing, Shawn and Sarah Barry suggest you join the club.
In 2004, the Barrys formed PropertyVestors, now a 300-member-strong real estate investment club near Richmond, Va.
“I found out that other agents have no one else to turn to when it comes to investments in other areas,” says PropertyVestors co-founder Shawn, a Realtor with Exit First Realty in Glen Allen, Va. “This appeared to be the answer.”
Members sign up for free at PropertyVestors.com, and receive monthly e-newsletters, an e-book by Sarah Barry called “Capitalizing on Real Estate in Today’s Economy,” and access to online articles. Shawn says about 25% of PropertyVestors members also pay “premier” dues of $245.25 per year, a fee that gets them priority project alerts, educational Webinars, quarterly portfolio profiles, and free consultations from the Barry power team. One percent goes to New Horizons Foundation, a non-profit job training program for building’s sheet metal and HVAC industries.
Armed with finance degrees earned from Virginia Tech (where they met), the Barry team has been investing in real estate since 1994. Both had backgrounds in finance: Shawn as a financial advisor for a McLean, Va.-based wealth management firm, Sullivan, Bruyette, Speros & Blayney (“The largest East Coast provider for Charles Schwab’s accredited investors,” according to Shawn) and Sarah as a financial auditor for General Electric.
Their first investment was a HUD-foreclosed town home in Virginia’s Fairfax County. “It happened fairly quickly,” says Shawn, now 34. “It was a sealed envelope bidding process. We analyzed the value of the town homes in that area – the going value was about $155,000 at the time – and worked with a real estate agent to put in a bid for $145,000.”
A week later, their bid was accepted. “We had money set aside to fix it up, finish the basement and update the town home,” Shawn says. “We saw it appreciate quite a bit, then we sold it and rolled those funds into a new home.”
Bring it on
The Barrys were ready to dive full-time into discounted-real-estate hunting. The two starting bringing in family and friends for bigger projects, and using a securities broker as needed. Shawn earned his real estate license. Sarah earned certifications from the nation’s leading self-directed IRA custodian and facilitation firms.
“We discovered that the more buying power we have, the better deals we can bring to the table,” says Sarah, 33. And so PropertyVestors was born.
“We look at investing very much as if you’re investing with a traditional Charles Schwab,” Shawn says. “It just needs to be diversified; we really focus on that for weathering market storms … Working at SBSB was a great experience, and I learned a lot from it. And now I apply that same philosophy of diversification to our real estate group.”
For the Barrys, “diversification” in real estate means a revolving portfolio of rehabs, green projects, flippable properties, options to buy, rentals, foreclosures, pre-construction financing, tenancy in common deals, land lots, private loans and discounted notes. And it means financing ranging from letters of credit with liens against existing assets, to self-directed IRAs.
It’s only been three years for the club, but its members expect to take action on more than 100 deals this year. “The group is becoming even more active, even with a downturn market,” Shawn says. “At the end of the day, you have to learn as much as you can about each of these strategies,” Shawn says. “It’s only then that you’ll know what strategies will work the best for you in your particular marketplace.”
Jennifer D. Meacham is a business and personal finance columnist and co-author of “IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment” (Square One Publishers, $16.95). Nominate a “Self-Directed Real Estate Professional” to be profiled here, or e-mail your self-directed retirement investing questions to Jennifer at email@example.com.