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Invest in Notes or Mortgages With a Self Directed IRA


In today’s environment, many individuals are becoming lenders and bypassing the bank to maintain the higher returns. As one of our Partners remarked, ”Why should I give the bank my money for less than 1% and have them lend it out at 6+% to people in my neighborhood? I can do the same thing myself with a good attorney and common sense. There are plenty of good people looking for loans.” A note is a vehicle that is used to extend credit from one or more individuals or entities to another individual or entity. There are two types of notes:

  • Secured notes are backed by collateral, providing the lender increased assurance of return of the loan amount and interest, such as mortgages and deeds of trust.
  • Unsecured notes are not backed by collateral. You might consider an unsecured note for perhaps a friend or a non-disqualified relative, but it is a higher risk—and sometimes reward—than a secured note.

To clear up confusion, a trust deed, deeds of trust, and mortgage notes are largely the same investment, depending on the state that you reside in. Your Self Directed IRA may invest in trust deeds, mortgage notes, and deeds of trust and other interest-bearing notes. These notes may be either in first or subordinate positions and may be purchased from brokers or private parties. Usually, the documentation is recorded at county recorder’s offices, and title to the property is insured as instructed.

A self-directed IRA gives you the freedom to invest in non-traditional assets, such as single-family and multi-unit homes, apartment buildings, co-ops, condominiums, improved or unimproved land (leveraged or unleveraged), commercial property, notes, mortgages, deeds of trusts and more.

To learn more about Self Directed IRAs we recommend our preferred company, Equity Trustheadquartered in Ohio. Just click on the “Self Directed IRA” link on this page.

In conclusion, you have a choice to make—take control of your investments or continue to use “hope” as your strategy.

For more information on these subjects and more, request your FREE educational starter kit today!

Managing Partner