Self Directed I.R.A.s and finding the right borrowers.

Let's talk about Self Directed IRAs.
I would love to find the just right person or people to lend some money to to a)help them get a rung up owning their own land, and b) take a nice profit on my investment doing something "better" than dropping it in a mutual fund, that bets it on who knows what, on a moment to moment schedule.

How would I find those just right people?

Right now we rent a few of our acres to a wonderful farming couple who met in collage both studying agriculture and they have been working our land for five years now. They have knocked it out of the park! At our local farmers market this season, as you entered and were greeted by the market management, they had to explain that the line was for Upcountry Farms, and that if you want to go to other booths you can just go around... That is how well they have dominated that market. This last spring they told us that they were looking to buy their own land, and I asked what market they are looking in they impressed me with the number they said... Sadly what they are looking for is very far beyond what I could help them with or I would jump to offer them a loan. We are in N. CA and the land around here is $$$$$!

How do I find these same wonderful farmers in a place where the land is much more affordable so I can help them buy, while helping to grow my retirement?

When you say "self directed IRA", would you be handling all the tax and investing stuff and the prospective lender would just be treating it as a somewhat conventional loan that they're paying back with interest?  If so it seems like it might be possible.  Knowing your funding amount and the interest rate you'd require would also help.  Phrasing it as a personal loan (or something else less scary) instead of a self directed IRA may also help.

Given all that, you could post it here in the Financial Strategy forum or maybe in the Permaculture Real Estate section since folks hunting for land may spend time in that forum.

Hi,  Have you set up your IRA yet?  Did you use a lawyer, bank, insurance firm etc...  There are different legal options for each corporation that does the paperwork.  Then you also need an account to keep track of income and expenditures. Of course you can still have a Roth IRA that is self directed. After all the govt. requirements are met then you can actually invest the money. If not then it is just a taxable investment. Ok, that was for those of us who have not heard of a self directed IRA>

Now how to find what you are looking for.  This is what I would do.  Determine exactly the type of investment I want. I couldn't just say I want to help people, which is my goal, but it is not specific enough.  Help people buy a farm, a house, invest in apartments with someone or myself and charge lower rent ... helping goes on and on.   Like a loan to a church to redo a roof over a woman's shelter.   Finding someone is easier when I am more specific and determine how much risk to take.

Always remember past performance doesn't mean good returns in the future. Some people start strong and give up in the middle. Finding a persons character is harder than finding someone.

Another thing to keep in mind is to spread the investments into different categories. I had to think like an investment advisor. Learn the gamut of the types of investments, and what I could not do as it is illegal for a single person to do it. (Yes it is possible to do things but very hard meeting the govt. demands to do it, like putting land into your IRA.)  It is possible to take your rental income from your land and reinvest it in the IRA. You would also be helping someone else to make a living.

Another note about investing.  As I am older I have become somewhat more conservative. I had wild speculations in my early days. I learned people can talk a good game and I would loose my shirt on the personal loan. It could go up in drugs and has. It is a lot easier to get a background check on people now than when I was younger and the internet hadn't been invented.

A tip, put at least 10% into physical precious metals.  I have studied history and finances and we are do for some dodo. Maybe market crash, maybe run on a bank. Definitely inflation. Maybe hyperinflation. Precious metals is a hedge against inflation.

If you are determined to put money into someone to kick-start a farm, then talk to farmers and network with them. That group will have the contacts you need.  Or do a crowdfunding or investment club and maybe a few people in a shareholding can pay for the larger startup cost for a bigger farm.
Just remember to do your homework.

Cast your bread upon the waters...