Self-Directed IRA Lending is A Key Tool in the Tool Box of Mega Successful Investors
Mega successful investors know that they need an arsenal of tools in order to maximize their ability to close those deals. One of the less known tools is an in-depth understanding of Self-Directed IRA Lending. Think about it…how many deals have you lost because your clients couldn’t get the money they needed from a bank?
Finding Self-directed IRA Lenders
- Identify prospects you know
- Open conversations
- Introduction letter
- One-on-one appointments produce the best results
- Get commitment
- Remember, you are presenting an opportunity that will benefit the potential private lender. No Begging, No Selling, No Chasing!
- Remember, many potential private lenders do not know they can make loans with a self-directed IRA.
Self-Directed IRA Lending – How to Approach Self-directed IRA lenders
Think about what it would take for you to feel comfortable loaning someone money. When you begin to think about it in that light, these guidelines make a lot of sense:
You must gain the confidence of the self-directed IRA lender.
- A great business plan can be a powerful tool in gaining their confidence. This plan will show them that you have thoroughly thought out the deal you are seeking money for.
- Detail your skills and experience in relation to the deal you are seeking funds for. Showing them you are experienced in this type of investment gives them confidence that you have the skills you need to make the investment successful.
- Share your credit report with them. A stellar credit report shows the lender that you are a person who pays what they owe.
- Provide the lender with comps for the area in which you are purchasing the real estate.
Self-Directed IRA Lending – Reasons to Seek Self-directed IRA Lenders
Why people seek self-directed IRA lending is as diverse as the people and the deals they are working. Some of the most common reasons:
- Immediate availability of funds is a main reason that investors use self-directed IRA lending. Having those funds available allows investors to swoop in and gather up great deals because they don’t have to make their offers contingent on financing.
- Ability to close deals quickly is another reason investors seek out self-directed IRA lending.
- Smaller down payments and in some cases no down payments are required with self-directed IRA lenders.
- Self-directed IRA lenders often offer no points at closing.
- You can sometimes get money upfront from self-directed IRA lenders. That’s correct, if you are lucky enough to negotiate this type of deal the private lender will actually give you money at the closing. For instance, if the real estate costs $60,000…you can sometimes negotiate to borrow $65,000.
- There are times when you can negotiate ‘no payments’. For instance if you are working on a Fix and Flip deal, you can sometimes negotiate with the self-directed IRA lender so that you don’t have to pay them until you sell the home.
You can quickly see that using self-directed IRA lending can give you an edge over your competitors when you are making those offers.
Note: All of these are examples. The actual terms of your private loan depend upon the negotiation between you and your self-directed IRA lender. You should always check with your professionals about the rules and guidelines related to self-directed IRA lending.