Investing in first mortgages through a self-directed IRA involves a few steps:
Open a self-directed IRA account: To invest in first mortgages through a self-directed IRA, you'll need to open an account with a custodian that specializes in self-directed IRAs. The custodian will manage the account and process transactions on your behalf.
Fund the account: Once you have opened the account, you will need to fund it with cash or rollover funds from an existing IRA or 401(k) account.
Identify a suitable investment: To invest in first mortgages through a self-directed IRA, you'll need to find a suitable opportunity. One option is to invest in a mortgage fund that pools together multiple mortgages, or you can invest in individual mortgages directly.
Conduct due diligence: Before investing in any mortgage, it's important to conduct thorough due diligence on the borrower and the property being used as collateral. This may involve reviewing financial statements, credit reports, and property appraisals.
Complete the investment: Once you have identified a suitable investment and completed your due diligence, you can direct your self-directed IRA custodian to invest funds in the mortgage.
Royal Palm Funding is a private lender that offers accredited investors the opportunity to invest in first and second mortgages through their self-directed IRAs. These loans are secured by real estate and allows investors to earn a higher return on their retirement funds while diversifying their portfolio. However, as with any investment, risks are involved, and investors should carefully evaluate the investment opportunity and consult with a financial advisor or tax professional before making any investment decisions.