Put your IRA to work in real estate notes.

How it works

1. Open a self-directed IRA. Use a custodian that allows notes and private lending. Most big brokerages don't. Specialty custodians do.
2. Move money in. Transfer from another IRA or roll over an old 401(k). Done right, it's not a taxable event. Your custodian handles the paperwork.
3. Pick your path. Your IRA can lend to LJH, or it can buy a note in its own name.
4. The custodian signs and funds. Your IRA is the lender or note owner, not you personally. Payments flow back into the IRA.

Why notes fit an IRA

• Payments grow inside the account. Tax-deferred in a traditional IRA. Tax-free in a Roth, if you meet the Roth rules.
• No surprise repair bills. If your IRA owns a rental, the IRA has to pay for every repair. You can't chip in from your own pocket. A note doesn't need a new roof.
• Set terms. You know the rate, payment, and term going in.
• Real estate behind it. First-lien notes are backed by property. That's a backstop, not a guarantee.

Rules you need to know

The IRS is strict here. Break a rule and the whole IRA can be treated as distributed, with taxes and penalties.

• No self-dealing. Your IRA can't lend to you, buy a note from you, or do deals that benefit you personally right now.
• Family counts. Your spouse, parents, grandparents, kids, grandkids, and your kids' spouses are "disqualified persons." Your IRA can't deal with them either. Siblings are not on that list.
• All money stays in the IRA. Payments go to the IRA. Expenses come from the IRA. Never mix in personal money.
• Borrowing can trigger a tax. If the IRA uses leverage, part of the income may be taxed as UDFI. Most note investors in an IRA keep it debt-free.
• Watch the fees. Custodians charge setup, annual, and per-transaction fees. Compare a few before you pick.

Not sure which kind of IRA to use? Read Self-directed IRA vs. Roth self-directed IRA.

Want the long version?

I wrote Mailbox Money Retirement for people who want steady income backed by real estate in retirement. It covers how notes work and how to think about them for your retirement money.

Next step

Open your account first, or talk to me first. Either works. If you're not sure your IRA can do this, call your custodian and ask if they allow private notes.

This page is general education, not tax or legal advice. IRA rules are complex. Confirm everything with your custodian and a CPA or tax attorney before you invest.