by J.P. Dahdah – Vantage Self-Directed Retirement Plans

Any time current events and negative headlines create significant losses and volatility in the stock market, I feel compelled to remind investors that there are safer alternative investment strategies which can help protect your retirement account savings from a potentially devastating blow to your nest egg. In uncertain times like these, I’ve come to appreciate the passion that some of our clients have for lending money through their Vantage Self Directed IRAs. Th ere can be many reasons that individuals choose this alternative fixed income strategy for their retirement plan investments:

  • Easy to Manage: Unlike most real estate purchases, lending generally requires minimal management once the loan is in place.
  • Provides Liquidity: While some real estate investments may have a long gestation period, loan payments can be structured monthly, quarterly or annually, providing cash balances that are especially important for individuals who require routine withdrawals or those facing required minimum distributions (RMDs) after reaching the age of 70.5 years.
  • Permits Flexibility of Terms: The Self-Directed IRA holder can create the terms of the note to properly reflect the amount of risk he or she is willing to take vs. the amount of interest the borrower is willing to pay. For example, the down-payment or interest rate can be increased based on the strength of the borrower’s financial statement or credit rating.
  • Provides Security: Loans can be secured by first or second mortgages, providing the IRA recourse should the borrower default. In the unlikely event foreclosure is required; the IRA should pay any expenses in obtaining payment or collection on the loan.
  • Can Result in Significant Returns: Vantage IRA account holders’ issue first and second mortgages from their Self-Directed IRAs at rates from 8% – 16%. While some clients locate their own mortgages, many rely on local companies who will match their funds to borrowers or will aggregate several IRAs into one mortgage.
  • AZREIA members: Members commonly utilize private note strategies to both lend money to Fix and Flippers seeking short-term capital to acquire or rehab a property using a Joint Venture approach or to borrow money from other people’s Vantage Self-Directed IRAs for their real estate investment needs. You don’t have to have an IRA to still benefit from the power of Self-Directed IRAs!

As with all investments you make, we suggest you speak to your legal and financial advisors regarding the structure of any loan you would issue from your IRA. Many times, title companies are happy to provide the basic note and mortgage forms for you to get started.

For more information as to the very basic process by which your IRA savings can become the “bank” and fill the void currently felt due to the lack of capital being lent by traditional lending institutions and the low yielding bond instruments, please visit