The Basics of Self-Directed IRA Lending
Traditional lenders – banks, S&Ls, credit unions and established finance companies – have tightened their lending standards significantly. This has left a huge opportunity for smaller lenders to service the needs of perfectly solid entrepreneurs and other quality borrowers who need financing through Self-Directed IRA Lending. Many times they have established track records and solid assets backing the loan application, but are still unable to obtain bank financing.
Lending from Self-Directed IRAs can frequently be completed by streamlining underwriting procedures and providing quick funding. In exchange, borrowers are frequently willing to pay interest rates well above the market rate for bank loans.
With Self-Directed IRA Lending, you negotiate the interest rate and terms with the borrower. The Self-Directed IRA custodian does not set the terms.
Self-Directed IRA Lending Investment Options
Mortgages and Trust Deeds
Private Business Loans
Commercial Real Estate Development
Property Tax Liens and Deeds
“Hard Money” Lending
Purchases of Distressed Debt
Important Rules to Remember About Self-Directed IRA Lending
Self-Directed IRA lending allows you to structure repayment terms and set up interest rates.
You have the power of choice and, as such, you can decide whether promissory notes are secured or unsecured with a Deed of Trust.
Due diligence is the key to a successful Self-Directed IRA loan.
• Foreclosure, collections, and defaulted notes are the responsibility of the Self-Directed IRA lending account holder. Utilizing a note servicing company makes this process easier.
If you have access to quality borrowers, the law allows you to engage in Self-Directed IRA Lending, using your IRA. In fact, in some ways, Self-Directed IRA Lending can be an excellent IRA investment, because of the tax deferral of interest payments. In the case of a Self-Directed Roth IRA, your IRA can even receive interest payments tax free – provided the account has been open at least five years and you are older than age 59½.
As with all investments, it is important to involve professionals so that your interest is protected. In the case of Self-Directed IRA Lending those professionals most commonly include the title company, attorney, and servicing agent.
At American IRA, we do this every day. We have simplified our process so that you can quickly and easily take care of your Self-Directed IRA Lending transactions. If you would like to open a new account or have questions about opening a new account, please contact our office at 1-866-7500-IRA(472) or email@example.com.
If you are an American IRA Client and you have questions regarding the investment process, please contact our office at 1-866-7500-IRA(472) or firstname.lastname@example.org.