(How) Can I buy my own note with self directed IRA?

[Ezra Nugroho]

Hi all,

I am considering doing a small private lending which would provide me a 1st position note on a property. Closing is expected in 3 weeks.

I'd love to be able to service the node using my IRA money, however it is currently not under a self-directed plan. I am not sure what it takes or how long to convert my current plan to a self directed plan. I am guessing that I would not have enough time to convert it service the loan for closing.

Suppose if I service the loan using my savings for now, how do I buy my own note using my IRA money in the future? I am sure that lending opportunities are not that rare, is this worth all the hassle ?

The loan is at 9% for 44% of the property value, 1st place. Is this an attractive loan?

Thanks for the insights!

[Sheryl Griffin]

Originally posted by @Les Jean-Pierre:

Great thread. I have a question or two: if you had a substantial amount of money in multiple IRA's and about 20 years from retirement would you do the SDIRA or Solo 401k? Can I buy a property through the solo 401k and then use for my own use without a tax hit?

The advantage of a Solo 401K compared to an SDIRA is the contributions are up to 10 times more than traditional or Roth IRA of $57.5K, and an additional $57,500 contribution from your spouse (if applicable) if he/she is also involved in the self-employed business. This is what I'm using because of more freedom to work my real estate and take out financial loans of up to $50K.