I want to hear your experience lending funds from your IRA

[Michael H.]

Hello,

Has anyone had a good experience lending from their IRA to a hard money guy who then lends it out to local flippers. Ive been approached by several people who do this but I've never pulled the trigger even though I'm still interested.

preferably local to Houston

Thanks BP family!

[Brian Eastman]

@Michael H.

Using an IRA to lend to flippers is very commonly done. This is something I do with my self-directed plan because I have expertise in flipping personally and and know several seasoned investors who flip for a living and need loans to operate at maximum volume and efficiency.

What you are describing sounds more risky, and I would be very careful as to how deals are structured and perhaps have an attorney look at the process.  

If the 3rd party is acting as a broker and collecting fees for arranging a note between your IRA and a borrower, with a mortgage and deed of trust secured by a specific flip property, that sounds OK. You would still want to ensure he has the proper licensing for doing so, that deeds are recorded properly, that everything complies with state lending laws, and that you have an opportunity to vet specific lending transactions.

If your IRA is just lending money to the 3rd party or a company he controls and does not have direct security with a lien against the underlying property, just don't do it. You are putting your money at great risk with no viable recourse in that kind of arrangement.