Using IRA for private lending

    by Aditi Bansal

Updated on Freitag, 5. Mai 2017

The American IRA is experienced in this field with simplified processes to for borrowers to easily and quickly handle any IRA lending transactions. Secure your funding from commercial hard money lenders to quickly flip a real estate property and seal that deal.

tags  #Commercial hard money  #Private IRA lenders #


As traditional lenders continue to tighten their lending standards, real estate investors are seeking alternative sources of funding for their business. Commercial hard money lenders are taking advantage of this opportunity to service the needs of solid entrepreneurs and other borrowers seeking quick financing for their real estate investments. In most cases, these borrowers have established solid asset backing and a great track record on servicing huge mortgages yet they still can’t qualify for bank loans for one reason or another.

Private IRA lenders can effectively compete by simplifying the underwriting procedures and giving quick funding for borrowers. On the other hand, borrowers are willing to part with much higher interest rates above the traditional bank loan rates.

Do you have Access to Quality Borrowers?

Provided you can access quality borrowers, the law permits you to carry out Private IRA lending by using your IRA. In many cases, Private IRA lending can provide a perfect IRA investment platform due to tax deferral on interest payments. Additionally, you can enjoy tax-free interest payments with your Roth IRA as long as the account has been active for over five years and you’re over 59.5 years of age.

Options in Private IRA Lending

Private IRA lending allows borrowers to invest in any of the following debt instruments:

  • Mortgages
  • Car notes
  • Hard money lending
  • Private business loans
  • Commercial real estate development
  • Property tax liens and deeds
  • Secured notes
  • Unsecured notes
  • Purchases of distressed debts
  • Bridge loans

Secure and Unsecured IRA Loans

IRA loans can either be secured or unsecured. Secured lending is backed by collateral to guarantee repayment of the loan plus interest. On the contrary, unsecured loans come at much higher interest rates and the principal amount you can borrow is lower. This is due to the high risks involved with no collateral backing.

Many investors prefer lending money through their IRA to real estate investors or individuals looking to buy homes. The advantage is that the lender has the leverage to use the property as security. This means that in a case of default, your IRA will take possession of the property and you can choose to sell it or rent it out to recover your money.

A major gain of private lending using a self-directed IRA is that the returns generated from the investment are tax-deferred until the distribution is undertaken, and all gains are tax-free.

Factors to Consider before taking IRA Lending

Private IRA lending gives you an opportunity to structure your repayment terms and set interest rates. You have the power of choice at your disposal, and you can choose to use secured or unsecured promissory notes with a trust deed. Remember that the American IRA does not take responsibility for the success or failure of IRA loans you enter into.

The private IRA lender is responsible for the foreclosure, collections, and defaulted notes of the transaction.

Use Professionals to Manage Your Investment

Just like with every investment, it’s critical to involve professionals to safeguard your interests. Before you engage a private IRA lender, consult a reputable title company, servicing agent, and a real estate attorney to ensure that your investment is protected.

This page has a focus on Commercial hard money, Private IRA lenders was shared by Aditi Bansal.

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