Many investors believe that an individual retirement account can only be used to buy investments like stocks and mutual funds. Not true! When individual retirement accounts were first introduced, the few companies that offered them were large brokerage firms that sold only stocks and mutual funds. When you chose to open an IRA with them , they offered you a variety of investment options to select from. The part they didn’t tell you was that all the options proposed to you were investments that they sold and would make profit on. They left out all the other things that you are allowed to invest your retirement dollars in because they didn’t sell them and would not make any profit on those investments.

Enter the Self-Directed IRA. The IRS has set forth guidelines on what you can and cannot invest in with your IRA. People would be amazed at the scope of options available to you . From gold bullion, to tax liens, to real estate investments and real estate notes, IRA’s are much more powerful than most people ever realized. Bring to that the power of a Roth IRA, which allows you to enjoy your earnings tax-free, and you’ve got a fast road to retirement.

Most of the private money lenders you talk with may have funds in an IRA account, but many of them may not realize that they can invest those funds, via a self-directed IRA, in real estate Notes that are completely secured by a Deed of Trust or Mortgage, and insured. Picture having a fixed, secured, insured, tax-free gain of 10% to 15% or more annually, then compounded over the next couple of years! That’s a powerful blend of safe, secure investments, with the high yields usually found only in very aggressive and high-risk investments.

Many people’s IRA accounts have seen a big loss in recent years which has forced them to either watch their account statements with apprehension , or even transfer their funds to a money market account within their IRA yielding a lowly 1% interest. The return and safety that you can show these investors immediately will outshine any options they’ve seen elsewhere , so recruiting new lenders for your business will be much simpler than you think .

Some of your new private lenders will have IRA accounts, but not with a custodian allowing self-directed investments. The new lender will have to roll their current IRA account (or 401k from a previous employer) into a fresh account held by a custodian that offers a self-directed IRA. As the company currently holding the account will want to do whatever they can to keep the business, the transfer process could take as little as a week, or as long as 1-2 months.

Once you’ve found a lender that has an individual retirement account and agrees to invest the funds with you, get them started with the account transfer process right away . Since the money transfer could take a while to become available in their account, you won’t be able to rely on their funds until the transfer is complete .

Talk to some self-directed IRA custodians yourself, review their websites, and learn about their paperwork and procedures ahead of time . Your ability to guide your lenders through the application and transfer process will add to their confidence in you and confirms your professionalism and commitment to servicing their needs.

There are a number of IRA custodians offering self-directed options. Choose one that specializes in real estate notes ensuring that your transaction structures look familiar to the custodian company and your deals close smoothly.