California IRA Investing
We use the term "IRA" loosely here to refer to retirement accounts, such as a Roth, IRA, 401(k), and Defined Benefit Plans. All of these are legally different from each other, but for hard money and private money loans we take them all together as an IRA. We also have generically called "mortgage" or "note," because of the variety of terms different states use to describe these types of investments.
A lot of people out there mistakenly believe that only stocks and bonds are allowed in their IRA. But you should know that your account has lots of options, including private placement, mortgages, limited partnerships, real estate and many others. All you need to do is contact an investment specialist who can help you take advantage of your funds.
Want to discuss your investment options? Want to learn more about how we can help you? Request a free consultation with one of our leading experts today.
Here Is How Investing In Hard Money With IRA Works
Because investing in hard money loans with your IRA may sound confusing, we've put together a comprehensive guide on how it works. Our goal is to make the process as easy and stress-free as possible.
Investing in a hard money loan with your IRA account will follow the six standard steps below:
Step 1: Setting up a self-directed IRA.
The common practice when it comes to self-directed retirement accounts is to approach large brokerage firms. These firms limit their clients to investments like stocks and bonds, which makes personal loans unavailable. Don't hesitate to turn to smaller companies specializing in alternative investments through your self-directed accounts.
Step 2: Invest in a deed
If you use a self-directed IRA, the deed should be vested in your name and reference your account number. Here is an example:
ABC Custodian Company, on behalf of “Your Name IRA Account #123456”
When it comes to investing in deed using a self-directed IRA, there's more to the investment than just signing on the dotted line. In this type of transaction, you have an opportunity to fund your deed to an asset such as real estate. This is a process that requires something more detailed and comprehensive than what you would go through during traditional transactions.
Step 3: Authorize to release funds.
We created an easy to use agreement for you to sign that authorizes the release of your funds. Simply review the loan checklist and make sure all agreements are properly signed before loan is originated.
Step 4: Finalize the deal.
With an escrow company's assistance, or an attorney help, you'll finalize the deal at this point.
Step 5: Give your custodian a copy of your security agreement.
The custodian will hold your promissory note and deed of trust once the deed is funded.
Step 6: Set up a payment plan.
A loan officer will be hired to send payments to custodian after it was collected from the borrower. This is usually specified in the agreement that's signed between the two parties.
Moving your retirement funds can seem like a complicated and stressful process, but we are here to do all the heavy lifting. With help from one of our professionals, the transfer process will go smoothly. We strive to serve our clients well in order for them experience nothing but success with their investments.