How to Invest in Private Lending
In order to initiate your investment, you will need to ensure you have sufficient cash in the account. If at the time of investment, you don’t have sufficient cash in the account, consider a transfer-in, rollover, liquidation or contribution to fund the account.
Investment Timeline Overview
STEP 1: Fund Your Account - Timeframe: 1 to 4 weeks
- Prepare your self-directed account by funding via contribution, transfer, or rollover.
STEP 2: Find Investment & Due Diligence - Timeframe: Varies
- You will need to find a borrower and do due diligence.
STEP 3: Assemble Documents - Timeframe: varies
- Once you have all of the required documents prepared, you'll need to upload them.
STEP 4: Investment Funding - Timeframe: ~3 business days
- Timeframe may vary.
STEP 5: Manage Your Account
- Once your investment is complete, you'll be able to manage the investment via the online portal.
Getting Started
Assemble Documents
After you have found a borrower, you negotiate the terms of the note and prepare the loan documents. NDTCO does not assist in this process.
- New Direction Trust Company does not provide loan document templates or verify verbiage of the document. Outside parties like attorneys and title companies can be used to prepare the note.
In order to submit your Promissory Note Buy Direction Letter you will need to ensure you have sufficient cash in the account. If at the time of a purchase you don’t have sufficient cash in the account, consider a transfer-in, Rollover, Liquidation or contribution to fund the account before your purchase. If you are working with us already on a sale or funding request, check your account daily for incoming funds. As soon as funds clear in your account, you will be able to submit your purchase request.
Required Documents
Paperwork Required if NOT using a third-party for funding the loan
- Promissory Note Buy Direction Letter
- Wire instructions if funding via wire
- A copy of the note, with the borrower’s wet ink signature
- Amortization schedule if applicable
Paperwork Required if using a third-party (such as a title company or lawyer) for fulfillment of loan
- A copy of the note, with the borrower’s wet ink signature
- Amortization schedule if payments are amortized
- A copy of the security document signed by the IRA as “read and approved. Although NDTCO does not require security documents to be recorded with the county, we strongly recommend it. Security documents should be recorded prior to sending copies to NDTCO
Electronically signed, or scanned copies of notes with wet signatures, will be accepted as original documents. Copies of all signed documents for the transaction can be uploaded to NDTCO while completing your online Buy Direction Letter or through the portal messaging center.
Please note, NDTCO does not hold hard copies of original notes. If original documents are mailed to NDTCO, we will mail the original documents back to the account holder.
Once the funding has been completed, the title company or lawyer should send the completed documents to the account holder, who will then upload them to the portal.
Titling Instructions/Lender Information Requirements for Notes
The promissory note should contain the following items:
- Interest rate
- Maturity date
- Principal amount
- Repayment terms
- Lender name (NDTCO as custodian FBO Account Holder’s Name, IRA)
- Lender’s signature line left blank
- Lender’s Address, if included (New Direction Trust Company, 1070 West Century Drive, Louisville, CO 80027)
- Lender’s TIN, if included (20-0157510)
- Borrower name with wet ink signature
- Borrower’s wire instructions or check delivery instructions