Self-Directed IRA

Invest in what inspires you!

Freedom in retirement starts with freedom in investing.

While every IRA has tax advantages, only a self-directed IRA has the advantage of breaking free from the confines of Wall Street to work harder and smarter in the investment of your choosing.

MORTGAGE LOANS
RENTAL PROPERTIES
FIX-AND-FLIP PROJECTS
BUSINESS STARTUP
BUSINESS CAPITAL INFUSION

You Choose the Terms

Although your account is technically the “Investor,” as the account holder, you have the power to qualify buyers and make final decisions on investment terms and interest rates.

Secured or Unsecured

As the account holder, you can negotiate with the borrower to determine whether the investment will have security or not. Typically, security instruments will include a deed of trust, a vehicle title, etc.

Can A Self-Directed IRA invest in Real Estate?

Self-directed IRAs can issue loans, turning the accounts into miniature banks. The amount you can lend to others is limited to the amount in the account, but otherwise, there aren’t any minimum balance requirements. You can start lending from your SDIRA if you have $1,000 in the account or $100,000.

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You control the lending process when you use your SDIRA to issue non-recourse mortgage loans and secured real estate notes. You can choose the interest rate you charge, the term of the loan and the amount you’re willing to lend. You’re also in charge of choosing the people or companies you’ll loan money to, although there are some restrictions.

SDIRA unlocks multiple investment options beyond the basic stocks, mutual funds and bonds.

Who Can Finance Real Estate with a Self-Directed IRA?

Your SDIRA can decide who to lend money to, with some exceptions. Under IRS rules, the self-directed IRA can’t lend to any disqualified persons. That means you can’t borrow from your self-directed IRA, nor can your relatives or anyone connected to the plan, such as the IRA provider or custodian.

Otherwise, you can choose who to lend to, whether it’s a first-time homebuyer from the internet, mortgage broker, real estate professional, a startup looking for funding or a close friend who needs money.

From office buildings to raw land, your self-directed account can tap into the booming real estate market. Whether you’re an experienced real estate investor or you’re looking to get started, we’re here to help.

A tax-advantaged plan can hold:

ISSUE MORTGAGE / DEED OF TRUST
RESIDENTIAL PROPERTIES
COMMERCIAL PROPERTIES
RENTAL PORTFOLIO LOANS
RAW & UNDEVELOPED LAND
MINERAL RIGHTS

Can A Self-Directed IRA Borrow Money?

You can also use your self-directed IRA to borrow money, mainly if you’re using the SDIRA to invest in real estate. You can apply for a non-recourse loan in the SDIRA’s name. The property the SDIRA purchases acts as the collateral on the loan.

An important thing to know about getting a non-recourse loan through your SDIRA is that the lender can only go after the SDIRA, not you if the loan defaults. The lender can seize your SDIRA but can’t try to seize any other property or assets owned by you.

Most Important Self-Directed IRA Investing Rules

Before you start investing from a self-directed IRA, there are a few important rules to know before you start:

Due diligence: The first rule is to do due diligence before lending to anyone. Your SDIRA provider or custodian will not do this for you. It’s in your best interest to vet any potential borrowers and set the loan terms based on the information you uncover.
Disqualified persons: The second rule concerns disqualified persons or who you can and can’t lend money. If the borrower is related to you or has a business connection to you, you can feel confident that the IRS considers them disqualified.
Investment activity: All investment activity comes from the self-directed IRA. You and your SDIRA are entirely separate entities. Any money you lend comes from the IRA. If you contribute $1,000 to your SDIRA and then lend it to someone, you need to deposit the money first. It also means that any profits, such as interest earned, need to go back into the SDIRA. The borrower should make payments in the name of the self-directed IRA, not your name.

If you are borrowing with your self-directed IRA to purchase real estate, there are a few more rules to note. You can’t use your SDIRA to buy a home to live in. Similarly, you can’t buy a house for your brother or children using a non-recourse loan or any funds from your SDIRA.