private money from IRA ?????? HELP !!!

ok, I find a private money lender…some guy that has $100,000 in his IRA and he wants the 15% I am willing to pay. On non-qualified money I would just have a lender send the money to my real estate attorney. But in an IRA, I know that money can not leave an IRA for more than 60 days, so how do I use a private investors IRA money ? He can’t take money out of the IRA account and send it to my attorney, right ???

try this can your ira person get aloan from the bank where his ira is ? As they could use it as security for the loan/// and iam sure the intrest will be much less than the 14% you will be paying for the money so he or she will still be making money . Just athought that may work

A private investor can take money out of his IRA and loan it to you, but at substantial penalty. Likewise a private investor borrowing against his IRA or using it as collateral for a loan and then loaning the money to you is unlikely as it is not permitted. Borrowing money from your 401k is a different story and is permissible if your plan is so equipped. You might also find a private investor whom has his IRA in a self-directed plan. If the plan trustee allows for real estate investment then you may have found your source. Not advice, just reality as I understand it.

The IRA must be self directed otherwise it is not possible unless he is willing to pay taxes on the entire distribution along w/ possibly the 10% early with penalty. Plus he can’t just put the money back once he has taken constructive receipt for over 60 days.

If it’s self directed then it shouldn’t be a problem since the loan would be just another investment vehicle. Most SD IRA’s are invested in managed money anyways…which isn’t paying 14%…!!!

You can absolutely have this fellow give you money from his IRA. You must do it through a custodian and a self directed IRA, however. I have all my IRA money in a self directed IRA. You MUST however do this through a custodian.

Although there are others, I recommend mine - Equity Trust ( They are very familiar with using IRA money in this fashion. You just need to give this guy’s IRA a note for 15% (not him personally - this is very critical - the note must be titled in the name of his IRA with Equity Trust as the custodian, but they will walk you both through all this), and secured by the property. He will need to establish an IRA with Equity Trust as the custodian.

Their website is very informative. I have no interest in this other than being a very satisfied customer. I hold shares in two real estate LLC investment pools, a hard money note as described here, and a brokerage trading account. The beauty is that on his 15% interest the tax is deferred (or eliminated if its a Roth).

If you do lend money from your IRA, does it show up on the other person’s credit report?

Not to my knowledge, but then my transactions have all been through a hard money lender. He pays me a note rate, turns around and loans it out, pocketing the points he charges as his end, plus any difference in rate. I get 14%.

You get 14% on every deal. Or does it differ with each deal?

No, that is incorrect. As long as the person has a qualified custodian, they can issue a note for however long they want to. There is no 60 day rule.