Using Your IRA for Trust Deed Investing

Your funds or IRA must be held by a third party “custodian”, who acts as your intermediary. This is known as a “self directed” IRA. Once you have an account, you can then direct those funds to be used as capital to fund trust deed investments.

If you have a current custodian for your self-directed IRA, first check to see if they will accommodate trust deed purchases. If not, contact us for information on custodians that will allow you to place your IRA funds in a trust deed investment. In addition to IRA or SEP IRA’s, you can also transfer existing pension plans, (e.g. 401k, 403 a & b, ESOP or 457 plan) to a custodian.

Once your funds are transferred, notify us how much you would like to invest in trust deeds. We will then forward loans fitting your individual criteria to you to decide whether or not you would like to invest. Once you have decided on an acceptable trust deed, we will send you the appropriate documents for signature, and will work with your custodian to transfer or rollover the funds.

A self-directed IRA is no different from any other IRA. It indicates that you the client choose your IRA investments. The rules governing IRA investments types are exclusive – not inclusive. Therefore you can invest your IRA funds in a virtually unlimited set of investments, except for those specifically excluded by law. Excluded assets by the IRS include life insurance contracts, collectibles, and capital stock in an “S” Corporation.

This is not a new investment strategy. You have been able to buy real estate and trust deeds within your IRA since the inception of IRA’s over 30 years ago. Many financial professionals are unfamiliar with this, and continue to recommend bond and mutual funds for IRA investments. Also, some institutions limit investment choices to funds and products for which they will earn a commission.


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