Self Directed IRA Trust Deed

[Justin Bonney]

Investment Info:

Single-family residence private money loan investment in Los Angeles .

Cash invested: $36,000

Self Directed IRA financing 40/2 loan for acquisition, note rate 12%

Have done several private loans over the last 10 years after taking a break from rentals.

What made you interested in investing in this type of deal?

Low amount to invest, safe yield inside retirement account. At the end of 2nd year, principal returned would be $35917.46
Total cash received after 24 months, assuming all goes well is $44980.10

Decent return and allows me to get my feet wet.

How did you find this deal and how did you negotiate it?

Mortgage broker.

How did you finance this deal?

Self Directed IRA

How did you add value to the deal?

None, I can extend the loan at the end of the term, not sure if I want to offer this to borrower.

What was the outcome?

Steady eddy cash flow.

Lessons learned? Challenges?

Need software and systems to scale up servicing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

They are ok. The deals they are offering are looking riskier and the appraisals a little too aggressive. Always proceed with caution since the lender gets origination fees and may not do the best DD in my opinion. Funded several deals now and always say to study up on borrowers more than the property. I have helped many owners of rentals reposition their portfolios with this approach.

[George Blower]

@Brandon Sturgill

I understand that you are envisioning that retirement funds would be loaned via an SDIRA.  This is acceptable as long as the holder of the SDIRA is not related to the borrower and otherwise not involved in the project either directly or indirectly (i.e. the holder of the SDIRA does not own a company which is handling part of the renovation).  The terms of the loan would need to market/arms' length.