Anyone out there using a SDIRA to offer hard money loans?

[Joshua Massari]

Hey BP,

I am looking to roll my Simple IRA into a SDIRA so I can have control over this money and invest in real estate. I was originally intending to use these funds for fix and flips, but since I cannot be involved in the labor aspect and I will get taxed at 40% ( UBIT ) on the gains, I am looking into lending this money to other fix and flip investors so that my gains can grow tax deferred. What kind of return are you getting on these loans?

[Jeff Rabinowitz]

The rates are tailored to the borrower and the project. Experienced rehabbers who are putting significant amounts of their own funds into solid projects represent much less risk than inexperienced borrowers who do not have their own financial resources. As the lender, you must gauge your risk tolerance and decide whether you wish to risk lending on a project and, if so, what return you require.