A note is a vehicle that is used to extend credit from one or more individuals or entities to another individual or individual’s entity.

Investing in Trust Deeds and Mortgage Notes with a Self-Directed IRA

To clear up confusion, trust deeds, deeds of trust, and mortgage notes are largely the same investment, depending on the state in which you reside. Your American IRA self-directed IRA may invest in trust deeds, deeds of trust, mortgage notes, and other interest-bearing notes.
These notes may be either in first or subordinate positions and may be purchased from brokers or private parties. Usually, the documentation is recorded at the county recorder’s offices, and title to the property is insured as instructed.

You may also purchase or sell portions of mortgages. In such cases, your retirement account holds an undivided interest in that portion of the note and receives a proportionate amount of income due under its terms. In addition, you may purchase discounted notes as well as real estate purchase options.

To properly complete a transaction, you will need to complete a Buy or Sell Direction Letter. It is important to follow the guidelines provided on these forms to avoid any unnecessary delays and costs.

As with real estate purchases, these retirement investments entail specific requirements that are critical to the smooth completion of the transaction. To find out more about these types of transactions, please contact our office.

American IRA, LLC does not offer investment, tax, financial or legal advice to clients. Individuals who believe they need advice should consult with the appropriate professional(s) licensed in that area.