401k/Private Lender

[Jaren Woeppel]

Hey Everyone,

I have a project in mind and have a family member looking into giving me a loan. He would like to give me a loan from his 401k, but I don't really know how to go about setting it up. Any experience in this area, I hear about taking in private investors with their 401k money all the time on the podcasts? Are there companies that service these private lender loans to keep track of everything?

[Darren Eady]

Setting up a loan from a self-directed 401(k) would be too difficult for one transaction. You would have to create a mortgage note and comply with the other terms of the self-directed 401(k)  custodian. 

 If you're just talking about him getting money from his 401(k), that's as simple as borrowing through his 401(k) custodian  and lending you the money.