Lending through IRA

[Jane Irwin]

We are recently retired, new to investing and belong to a local REI club. We have been approached by different individauls who want to borrow money. Specifically a loan of $25,000 at 8 percent and the borrower was looking for a 2 year loan which seemed lengthy given we do not want the money tied up that long. At any rate the money is going to be used for "marketing" so we can not attach it to any specific collateral and just on a promisary note. What steps can we take to ensure we get our money back or have some recourse if the subject does not pay us back. Should we make the subject provide a credit report and base our decision on that.

[Jon Holdman]

Only lend if you have first position security in a property worth more than the amount you're lending.  Period.