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Private Lending with a Self-Directed IRA

September 25, 2012

Over the last year, our industry has seen a growing number of retirement investors looking to use self-directed IRAs to engage in private lending transactions in order to improve their retirement fund potential.  This is because a self directed IRA gives you the option to loan money, similar to a bank. You choose the borrower, amount, interest rate, length of term, payment frequency, and amount.

IRAs can issue both secured and unsecured loans.  Secured loans are backed by collateral to ensure repayment of the loan amount plus interest.  Unsecured loans are typically offered at higher rates than secured loans and have lower borrowing amounts because they are associated with higher risk and not backed by collateral.

Many investors choose to loan money through their IRA to individuals looking to purchase a home.  When loaning IRA funds for a mortgage, you have the opportunity to secure the loan with that piece of property.  This means that if the mortgage defaults, your IRA takes possession of that property and you can decide to sell it or lease it out, providing you with additional funds within your IRA.

One major advantage of private lending with a self-directed IRA is that all gains generated by the investment are tax-deferred until a distribution is taken (Traditional IRA distributions are not required until the IRA owner turns 70.5).  However, with a self-directed Roth IRA, all gains are tax-free.

Private lending offers the opportunity for excellent investment returns today and the potential for even more profitable opportunities in the future.  With NuView IRA, you have the opportunity to self-direct your IRA in notes, real estate, mortgages, private companies, and many other investment options that most financial advisors are unaware.  Give NuView a call today at (407) 367-3472 or visit them at www.nuviewtrust.com to find out all the options available to you.