How Do I Lend Money: What Forms To Use
I have converted my 401k to a self directed IRA so that I can use that money to make investments. The first two items I will be doing is Tax Liens and lending to other investors. I am a member of my local REIA so I should be able to find solid people to lend to. My question is, can anyone point me towards loan paperwork I should use for this. Does anyone know how to do this so that I maintain your position on the real estate (usually second). Basically what are the steps to lending?
[ Edited by CBuford on Date 01/27/2006 ]
Hi! You have a great idea, however, once you convert your 401k so that you can invest in real estate, there are a lot of rules that have to be followed. The main thing is that you CAN NOT own any interest in the properties that your IRA purchase. Neither can any of your direct line relatives. One of the easiest ways is to set up a LLC in which your IRA then loans money to. This is the best way, without having to get constant approval from your custodian, to invest your funds. Hope this helps.
[addsig]
One addition, if anyone decides to do this. I would highly recommend you work with a professional company who does this because the LLC which needs to be set up is not the same as a regular LLC which we are used to. I has to be set up a special way for the IRA. I am using Guidant