QUESTION: I think my bank is finally OK with all this. I have rolled over my old 401k into the new self-directed solo 401k plan.
Now I want to do some private mortgage lending. Is there anything special about the note other than it is with my personal solo 401k plan?
Thanks, John P. from California
ANSWER: When investing a solo 401k in note investments (private mortgage lending), the rules are pretty straight forward. For example, the promissory note cannot be to a solo 401k disqualified person, such as you, your parents, grandparents, children, spouse, your solo 401k provider, attorney, accountant or any other person providing services to your solo 401k.
Moving on, the promissory note secured by deed of trust will list the solo 401k plan as the beneficiary (lender) and the property deed securing the note investment recorded in the name of the solo 401k. The funding of the promissory note will be processed by writing a check from the solo 401k bank account payable in the name of the borrower. Likewise, note payments will flow to the solo 401k bank account not your personal bank account.
Please visit purchasing notes with solo 401k to see a complete private mortgage lending procedure.
You may also use the Solo 401k note purchase form to help document the note.
Now I want to do some private mortgage lending. Is there anything special about the note other than it is with my personal solo 401k plan?
Thanks, John P. from California
ANSWER: When investing a solo 401k in note investments (private mortgage lending), the rules are pretty straight forward. For example, the promissory note cannot be to a solo 401k disqualified person, such as you, your parents, grandparents, children, spouse, your solo 401k provider, attorney, accountant or any other person providing services to your solo 401k.
Moving on, the promissory note secured by deed of trust will list the solo 401k plan as the beneficiary (lender) and the property deed securing the note investment recorded in the name of the solo 401k. The funding of the promissory note will be processed by writing a check from the solo 401k bank account payable in the name of the borrower. Likewise, note payments will flow to the solo 401k bank account not your personal bank account.
Please visit purchasing notes with solo 401k to see a complete private mortgage lending procedure.
You may also use the Solo 401k note purchase form to help document the note.
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