Utilizing your IRA funds to invest in Trust Deeds is becoming much more favorable due to the tax treatment, low maintenance and above average yields (10% plus). You can make a safe investment as a first position lien holder or take second filling the gap with a much lower investment amount, but with higher risk.
Advantages with Using Your IRA to Invest in Trust Deeds
- Positive cash flow notes
- 1st Trust Deed. Notes rarely have expenses unless there is a default.
- Predict future yields
- No liability exposure
Disadvantages with Using Your IRA to Invest in Trust Deeds
- IRA owning Trust Deeds are not easily leveraged
- Funds are not very liquid
We always recommend you review any investment when using your IRA with your Self Directed IRA custodian. Violating IRS laws regarding your Self Directed IRA funds can cause serious taxable penalties and cause your IRA to be effectively distributed and penalized.