Lender · CA · Member since 2023 · 31 posts · 30 votes
Curious for the SDIRA investors here…
Have you ever considered using your SDIRA to lend on real estate instead of buying the property yourself?
I feel like most conversations around SDIRAs focus on rentals, flips, or notes, but private lending seems like a side of real estate investing that doesn’t get talked about nearly enough.
For those who have done it, what helped you feel comfortable with your first loan?
For those who haven’t, what questions would you want answered before considering it?
The thing that made me comfortable starting was treating the underwriting just as seriously as if I were buying the property myself, loan to value, the borrower's track record, what happens if they default. Once you've got first lien position and a LTV you're comfortable with, it starts feeling a lot less scary.
Biggest thing people get wrong early on is payment flow, the borrower has to pay your custodian directly, never you personally, even for a second. Easy mistake to make without realizing it.
Honestly the learning curve is more about paperwork discipline than risk. The lending itself isn't that different from evaluating any other deal.