Notes in a Self-Directed IRA

If you are looking to hold notes in a self-directed IRA, IRA Innovations can help.

A note is a vehicle that is used to extend credit from one or more individuals or entities to another individual or individual’s 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 regarding notes, trust deeds and mortgages in a self-directed IRA – trust deeds, deeds of trust, and mortgage notes are largely the same investment, depending on the state that you reside in. Your IRA Innovations self-directed IRA or real estate 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 offices, and title to the property is insured as instructed.

Purchasing and Selling Mortgages or Notes in a Self-Directed IRA

You may also purchase or sell portions of mortgages. In such cases, your retirement account holds an undivided interest in that portion of the note and receives the proportionate amount of income due under its terms. In addition, you may purchase discounted notes as well as real estate purchase options.

Avoid Delays – Follow Instructions on Self-Directed IRA Forms

It is important that you follow all guidelines outlined on the forms we send you to avoid any unnecessary delays and costs. And, as with all real estate purchases, these retirement investments entail specific requirements that are critical to the smooth completion of the transaction.

Call IRA Innovations at (205) 985-0860 and get started on your self-directed IRA today.

We are never in conflict with your investment decisions because we do not endorse or sell any investment products.