Use Your IRA
Have you heard of a Self-Directed IRA?
Use your IRA to invest in Mortgage Notes!
Self-Directed IRA
A self-directed IRA is legally no different from any other IRA. It indicates that you the client choose your IRA investments. The rules governing IRA investment types are exclusive—not inclusive. Therefore, you can invest your IRA funds in a virtually unlimited set of investments, except for those specifically excluded.
The only assets excluded by the IRS are life insurance contracts, collectibles, and capital stock in an “S” Corporation. You can verify that it's legal to invest your IRA in mortgage notes by going to www.IRS.gov and searching for Publication 590. Pages 40-41 defines what cannot be held in an IRA.
Is this New?
No. You've been able to buy real estate and mortgage notes within your IRA since IRA's were created over 30 years ago. Many financial professionals are unfamiliar with this, and continue to recommend bond and mutual funds for IRA investments. Also, some institutions limit investment choices to funds and products for which they'll earn a commission.
Getting Started
First, verify that your current IRA custodian permits you to purchase mortgage notes. If not, contact us for information on custodians that will allow you to place your IRA funds in any acceptable investment. In additional to IRA or SEP IRA funds, you can also transfer existing pension plans (e.g. 401k, 403b, ESOP or 457 plan) to a custodian.
Once your funds are transferred, let us know how much you'd like to invest in mortgage notes, and hold the funds at your custodian in a short-term investment that can be easily liquidated. When we have a mortgage note available that meets your investment objectives, we'll call you to discuss the investment in depth so that you can decide whether it's right for you. If it is, we'll send you the Investor Loan Package and the appropriate documents for signature, and give you instructions to give your IRA custodian on how to transfer funds to the title company holding the escrow for your mortgage note investment.
The real advantage to using your tax-deferred money to invest with us is that the rate of return is fixed - you know that you are going to receive a predictable 12% on your investment. Not many investment options today can make this claim!