Does anyone use an SDIRA to do Note Investing

[Mark Servin]

Does anyone use an IRA to invest in Real Estate Notes. If yes, how has been your experience and what kind of returns are you getting. Is any one of the SDIRA companies better than the other in your experience.

[Beth Johnson]

I private lend using my SDIRA and the biggest need from a custodian, aside from stellar and prompt customer service when you have emergent questions, would be for full checkbook control. It makes the process for funding a deal so much faster. However, you need to know what you are doing so you don't screw things up since you are personally handling the entire transaction. The nice thing about custodians who don't allow checkbook control is they handle the transaction for you; meaning when you fund a deal, they will require a full set of signed docs typically and then fund the deal on your behalf after received. They make sure you don't do stupid stuff but it adds on a considerable amount of time when you talk about funding private deals where the borrower expects funds within a few weeks (2-3+ days added onto a deal AFTER the borrower signs can be very restrictive from a borrower standpoint). 

My first two private lending deals with my SDIRA both went into default scenarios. Each one of them paid off later than anticipated (about 18-24 months rather than the initial 12 month terms) but paid 24% default interest and all late fees in the end. With a healthy protective equity buffer around 60-65% LTV, I was able to secure my principal amount so I wasn't concerned.

By the way, I used Broad Financial to set up my account and their sister company Madison Trust is the custodian. Great company and really solid customer service.