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The Secrets Wealthy Self-Directed IRA Investors Know About Finding Private Lenders

Self-Directed IRA, Private LendingOur office has thousands of clients that are using their Self-Directed IRAs to invest in non-traditional assets including real estate. The most successful among them have learned to use other people’s money to finance their real estate deals. This article will outline how they find enough private money to give them an unlimited money vault.

Is borrowing allowed in a Self-Directed IRA?

Yes, you are permitted to borrow within a Self-Directed IRA as long as the loans are non-recourse. Non-recourse simply means that, in the event of a foreclosure, the lender has a right to seize the property the loan was secured by and nothing else. They cannot come after you, your Self-Directed IRA, or any other assets that you and/or your Self-Directed IRA own.

Why would I want a private lender?

Most people stop making deals after they have run out of their own money and/or reached the maximum amount they can borrow from traditional banks. That means they generally get stopped after they buy 3 or 4 houses. Building relationships with private lenders allows you to obtain an unlimited amount of money so that you can make an unlimited amount of deals.

How do I find a private lender?

The truth is that you already know enough people to get you started in private lending. The idea is to start with the people you know and then build from there through referrals. Some of the people you can approach about private lending include but are certainly not limited to:

  • Family
  • Friends
  • Dentist
  • Lawyer
  • Accountant/CPA
  • Doctor
  • Realtor
  • Insurance Agent
  • Pastor
  • Church Members
  • Co-workers (past and present)
  • Other people you do business with
    • The lady that owns the dog kennel you board your dog at
    • The beautician that does your hair
    • The owner of the family restaurant that you go to all the time
    • The owner of the dry cleaner that you take your clothes to
    • Etc.

How do I approach someone about being a private lender?

It’s simpler than you think. When someone asks you what you do for a living, you share a presentation that you have practiced. Here’s an example:

“I buy real estate, fix it up and re-sell it or hold it for long-term investment. I use private financing to acquire these properties. A lot of my private investors loan me funds from their Self-Directed IRA or 401(k) since they are not making very much on their investments in those accounts. They like investing with me because I always give them a loan secured by a 1st mortgage on a property. They get above bank rates through the interest I pay them. If you know of anyone who may be interested or if you may be interested yourself, I would be happy to sit down and have a discussion about it.”

It really is just that simple.

In our next article…we will talk about what you do when a potential private lender wants to discuss things further with you.

Performing Due Diligence as a Lender – Joint Webinar

Presented by Sean McKay, Senior Vice President of American IRA, and J. Eric Kindberg, Attorney at Law with Berger, Kindberg, & Navarro Law.

Click here to sign up for this free webinar.

Date: February 26, 2014

Time: 7:00 p.m.

Details:

Join this webinar and learn “How to be a successful real estate business based private lender”.

1. Definitions: Consumer vs Commercial Lender

2. What Do You Want to Be?

3. Time involvement

4. Expand from what you know

5. Case Study:  Frank the retired NYC Plumber

a. What’s he want to be

b. Time

c. Level of Ignorance

d. Making Choices

e. Making the Deal

i. Check out Bob

ii. Check out the Property

1. Physically

2. Fiscally

iii. Check out the Purchase Contract

iv.  Check out the Numbers

f. Do You Have Any Doubts?

g. Protect Yourself at Closing.

h. Protect Yourself After the Closing.

i.  When Things Go Wrong

j.  Your Backup Plan

i.  Short Term

ii. Medium Term

iii. Long Term

Click here to sign up for this free webinar.

J. Eric Kindberg Bio:

REAL ESTATE ATTORNEY, REAL ESTATE INVESTOR, REAL ESTATE BUILDER, REAL ESTATE BROKER,  Eric Kindberg just likes to play in the dirt.  He passed the South Carolina bar in 1975, after graduating from USC, obtained his Real Estate Broker license soon thereafter, and purchased his first rental property in 1977, in Greenville, SC.  Fifteen years later, he moved to North Carolina, passed the NC Bar, and has practiced law, played with rental property, been a private lender, run a general construction company, and generally had a good time ever since.  His law practice concentrates in two areas:

First, he emphasizes investment real estate, investment real estate borrowers, and private lenders.  How to buy’em, how to fix’em, , how to hold’em, how to sell’em and how to lend money on’em.  All while staying as legal and as protected as possible.

Second, his practice concentrates on protecting and transferring accumulated wealth via Wills, Trusts, POAs, skillful Estate Administration, and the proper use of corporations, LLC’s, land trusts and other created entities.

Eric is also the Executive Director of the Carolina Private Lender Association.

He may be reached at Eric@LawCarolinas.com or Eric@MyCPLA.org or directly at 704-507-6444.

How to Be a Successful Real Estate Business Based Private Lender

Sean McKay, Senior Vice President at American IRA, and Eric Kindberg, Attorney at Law, will be presenting this joint webinar.

Click here to register for this free webinar.

Date: February 26th, 2014

Time: 7:00 p.m.

Details:

Join this webinar to learn “How to be a successful real estate business based private lender.”

1. Definitions: Consumer vs Commercial Lender

2. What Do You Want to Be?

3. Time involvement

4. Expand from what you know

5. Case Study:  Frank the retired NYC Plumber

            a. What’s he want to be

            b. Time

            c. Level of Ignorance

            d. Making Choices

            e. Making the Deal

                        i. Check out Bob

                        ii. Check out the Property

                                    1. Physically

                                    2. Fiscally

                        iii. Check out the Purchase Contract

                        iv.  Check out the Numbers

            f. Do You Have Any Doubts?

            g. Protect Yourself at Closing.

            h. Protect Yourself After the Closing.

            i.  When Things Go Wrong

            j.  Your Backup Plan

                        i.  Short Term

                        ii. Medium Term

                        iii. Long Term

Click here to register for this free webinar.

J. Eric Kindberg Bio:

REAL ESTATE ATTORNEY, REAL ESTATE INVESTOR, REAL ESTATE BUILDER, REAL ESTATE BROKER,  Eric Kindberg just likes to play in the dirt.  He passed the South Carolina bar in 1975, after graduating from USC, obtained his Real Estate Broker license soon thereafter, and purchased his first rental property in 1977, in Greenville, SC.  Fifteen years later, he moved to North Carolina, passed the NC Bar, and has practiced law, played with rental property, been a private lender, run a general construction company, and generally had a good time ever since.

His law practice concentrates in two areas:

First, he emphasizes investment real estate, investment real estate borrowers, and private lenders.  How to buy’em, how to fix’em, , how to hold’em, how to sell’em and how to lend money on’em.  All while staying as legal and as protected as possible.

Second, his practice concentrates on protecting and transferring accumulated wealth via Wills, Trusts, POAs, skillful Estate Administration, and the proper use of corporations, LLC’s, land trusts and other created entities.

Eric is also the Executive Director of the Carolina Private Lender Association.

He may be reached at Eric@LawCarolinas.com or Eric@MyCPLA.org or directly at 704-507-6444.