Private Money Question

I have a rehab project for which I am searching for private funding. I have found it, at least part of it, but I need some help. The financier has his money in an old 401k and would like to move it to an IRA, then invest in my project as the first position note holder. Does anyone have experience with something like this? I mean, is it as simple as rolling the funds from the 401k to a new IRA, then lending me the money from the IRA?

Any help would be greatly appreciated.


That’s the way I did it. Rollover from 401k to self-directed IRA. I used an LLC to direct investments where I want, but your lender can do so directly with the custodian. There are rules against self-dealing and prohibited transactions. That shouldn’t be a problem for you if the two of you aren’t related and he won’t take part in the management of the business.

Great. I will be starting a new LLC for this particular series of investments, and he’s not a relative nor will be a member of the LLC, so that should be good to go. Thanks for the help.


Some custodians won’t allow investment into an LLC. Just make sure your lender has the right custodian.