When you think about issuing a loan from your retirement funds, you might think it sounds like something only someone with a huge army of accountants can achieve. But you can do it simply via Private IRA Lending. Using a Self-Directed IRA for private notes is a perfectly valid investment as long as you stick to the rules and regulations of how Self-Directed IRAs work. However, today’s post will go a step beyond that, asking: what kinds of options are available to you, once you decide that Private IRA Lending is the route you want to go? Here are some options to consider.

Mortgages and Trust Deeds

One common option within Self-Directed IRAs is investing in Mortgages and Trust Deeds. This involves lending money to individuals or entities so they can secure a mortgage or trust deed on real estate. It’s a secured investment, offering the potential for steady returns through interest payments. It also adds the security of having the property as collateral, which can give you a lot more confidence as an investor.

Secured and Unsecured Notes

Another possibility is investing in secured or unsecured notes. The key here is to understand how each functions as a “category” of loan. Secured notes are backed by collateral, providing an added layer of security for your investment. Unsecured notes, on the other hand, lack collateral. But because they’re not secured, they may offer higher interest rates to compensate for the additional risk you may be taking on. You’ll have to find a balance that suits your individual risk tolerance.

Private Business Loans

Self-Directed IRAs can also be used to extend loans to private businesses. This option allows you to support small businesses while potentially earning attractive returns on your investment. The key here is knowing how to evaluate a business opportunity. Is it viable? Is it creditworthy? These are the questions you’ll have to answer for yourself before issuing the loan.

Commercial Real Estate Development

Investing in commercial real estate development projects is potentially great avenue for Private IRA lending. By providing funding for development projects, you can participate in the lucrative world of commercial real estate. This adds a layer of diversity to your portfolio.

Car Notes

Car notes, or auto loans, present another lending option within Self-Directed IRAs. You can extend loans to individuals or businesses for the purchase of vehicles. In this scenario, you would earn interest on the borrowed amount over the loan term.

Property Tax Liens and Deeds

Investing in property tax liens and deeds is a unique lending option that involves purchasing delinquent property tax debts. By paying off these debts, you acquire a lien on the property. This can lead to ownership if the debt remains unpaid.

“Hard Money” Lending and Bridge Loans

“Hard money” lending involves providing short-term, high-interest loans, secured by real estate. These loans are often used by real estate investors who need quick financing for property purchases or renovations. Bridge loans, meanwhile, then “bridge” the gap between the purchase of a new property and the sale of an existing one.

Purchases of Distressed Debt

You can use a Self-Directed IRA to purchase distressed debt, such as non-performing loans or mortgage-backed securities. While this does carry higher risk, it can also offer significant rewards if the debt is successfully rehabilitated, potentially sold at a profit.

Self-Directed IRAs offer a plethora of lending options for investors looking to diversify their retirement portfolios. From mortgages and trust deeds to private business loans and commercial real estate development, the possibilities may even seem like they’re endless. But no matter what your choice, you’ll need a Self-Directed IRA to get started.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at www.AmericanIRA.com.