Self-Directed IRA: Getting Started in private money lenders in Washington DC
If you are considering ways of generating a solid return that comes with substantial provisions for safety from your Self Directed IRA account, think about becoming a hard money lender. Hard money lending is a great avenue for diversifying your holdings into assets whose correlation to the broad bond market and stock market is not close.
Although self-directed IRAs are flexible and present an opportunity to diversify retirement assets, most people are not aware. A self-directed individual retirement account lets you decide how you will invest your money without limitations that are usually imposed on IRAs, like a 401(k) or company sponsored retirement accounts.
Although investment companies set up plans, other retirement plans like 401(k), SIMPLE plans and SEPs and sell pre-packaged IRAs, have a stake in pushing stock as well as bond mutual funds. However, self-directed IRAs let you take personal control of assets within your retirement account, so you can steer them into anything you want. You can invest IRA in alternative assets that include the following:
Tax liens and certificates
Private lending
Hard money lending
Commercial real estate
Rental housing
Fix and flip real estate
Farms and ranches
Privately owned businesses
Apartment buildings
Oil and gas investments
Gold, silver and other precious metals
Pipelines
The list is endless. Therefore, you have the liberty of choosing an investment or a combination of investments that meet your criteria for investment. Even then, there are a number of investments that are prohibited. They include:
Owning gemstones or jewelry
Owning life insurance within a self-directed IRA
Taking personal possession of precious metals (You can only be a custodian)
Investing IRA money in collectibles or artwork
Investing IRA money in alcoholic beverages
Precious metals must be in the form of a bullion or approved coin
Despite the numerous restrictions, it is still possible to pursue different strategies within a self-directed IRA. Some of the common strategies you may consider are:
Inflation hedges
Leveraged strategies
Defensive strategies
Market-neutral strategies
Dividend growth strategies
Long-short investing
Venture capital
Income investing
Private equity
Real estate
Hedge funds
In order to get started with hard money lending, you need to open a self-directed IRA account. You will then fund the account before finding one or more borrowers. You can then tell your self-directed administrator to send the money where you are lending.