Notes and Private Lending
In short
Private lending lets your plan take on the role of the lender, earning interest instead of paying it. Through a self-directed IRA or Solo 401(k), you can originate or purchase promissory notes secured by real estate or other collateral, structuring terms that fit your goals. Learn about note investing, secured vs unsecured lending, and why this asset class can make sense in a retirement portfolio.
Start here
The case for private lending
Private lending lets a retirement plan earn steady, contractual income secured by real collateral, income that would be taxed at the same rate as a paycheck outside a plan. Inside a self-directed IRA or Solo 401(k), that income grows without an ...
Read articleTypes of private lending investments
Private lending covers more ground than a single mortgage note. A self-directed IRA or Solo 401(k) can be the bank across a range of loan types, from long-term mortgages to short-term rehab financing to fractional loans sourced through a marketplace, ...
Read articleHow private lending works in a retirement plan
Private lending turns your retirement plan into the bank. Instead of buying a stock and hoping it climbs, your plan makes a loan, and the borrower pays it back with interest. That interest flows straight back into the plan, where it compounds inside ...
Read articleSecured vs unsecured notes
Every private loan comes down to one basic question: what stands behind it? A secured note is backed by a specific asset, usually real property, that the plan can claim if the borrower stops paying. An unsecured note is backed only by the borrower's ...
Lending vs. rentals: Which is better?
Few debates among self-directed investors get more heated than lending versus rentals, right up there with pineapple on pizza. Both camps have strong opinions, and both camps are right. There is no correct answer here, just two genuinely good ways to ...
When private lending calls for an LLC
Private lending works through a trust-based structure, an IRA Trust or a Solo 401(k), or through an IRA LLC. There is no fixed rule for which one fits; the right answer depends on what kind of lending you're doing, how much of it, and how simple or ...
Who your plan cannot lend to
Private lending puts your plan in the position of choosing who to lend to, and every choice comes down to the same two tests. The first is whether the borrower is a disqualified person; the second is whether the loan's terms are genuinely market-rate ...
Understanding the risks of private lending
Private lending is a fundamentally sound way to generate income in a self-directed plan, and the risks involved are manageable with the right diligence and the right professionals in your corner. Most of what goes wrong traces back to a small number ...
Ready to continue your journey?
Whether you are ready to get started or have more to learn first, we have you covered.