Your Guide to Secured Notes in your IRA Guide to Secured Notes in your IRA s t. ... With a secured...

Your Guide toSecured Notesin your IRA

Combine IRA tax advantageswith secured note investmentopportunities.

Self-Directed IRAs and more...

Important Notes

NEW DIRECTION IRA, INC. ____________________________________________________________________________________ 1

What Account Holders Value about New Direction IRA

• Industry Leader in Online Account Access• A+ Rating with the Better Business Bureau• Dedicated Representatives for Each Client• Free Education Opportunities• Competitive Fees• FDIC Insurance on Uninvested Cash• Invest Anywhere in USA or Globally

With a self-directed IRA, you can acquire existing notes or originate new notes as assets in your retirement plan. Your IRA can make this investment without penalty and while keeping the tax benefits associated with the account type.

Self-directed IRA lending gives you the ability to loan IRA money to non-disqualified persons, while keeping all tax benefits associated with IRA accounts. The IRA holder chooses the borrower, principal amount, interest rate, length of the term, payment frequency and amount.

The IRA can receive principal and interest, just like a bank. With a secured note, you will need collateral from the borrower.

You, the IRA holder, select the terms of the IRA loan and direct us to send money from your IRA to fund it. We make sure the paperwork substantiates that the loan is done through your self-directed IRA, and therefore deserves the tax benefits associated with the account type.

New Direction IRA Account Types that can Invest in Secured Notes

• Traditional IRA• Roth IRA• SEP IRA• SIMPLE IRA• Individual 401(k)• HSA

We are here to assist you every step of the way. However, it is your responsibility to be familiar with the information provided in this guide and to follow the required procedures.

Remember to stay in the required sequence: 1) Open account, 2) Fund account, 3) Loan Investment

Table of Contents

Step One: Before You Invest

Step Two: Investment Process

Step Three: After the Purchase

NDIRA Forms


Some important considerations that investors should know before embarking on a secured notes investment with their IRA.

Open and Fund Your Account ....................................................................................

Find a Borrower ................................................................................................................Page 3

General Rules ....................................................................................................................Page 3

Collateral Options ...........................................................................................................Page 4

Perform Due Diligence ..................................................................................................Page 4

Required actions you will need to take to make your IRA purchase. Please be sure to review titling and signing instructions before getting started.

Negotiate Terms and Prepare Loan Documents .................................................Page 5

Required Contents of an Unsecured Note .............................................................Page 5

Titling Instructions ..........................................................................................................Page 5

Read and Approve Loan Documents .......................................................................Page 6

Required Documents .....................................................................................................Page 6

Using Third Parties for the IRA Loan .........................................................................Page 7

How to complete capital calls and additional fundings as well as the process to sell your secured notes investments.

IRA Owns Secured Note ................................................................................................Page 8

Collecting Payments ......................................................................................................Page 8

Defaulted and Uncollectable Loans .........................................................................Page 9

Paying Off a Secured Note ...........................................................................................Page 9

Necessary forms...............................................................................................................Page 10

1. Fee Schedule

2. Promissory Note Buy Direction Letter

3. Borrower’s Acknowledgement Letter

4. Account Holder’s Acknoweldgement Letter


Find a Borrower

Open and Fund Your AccountStep 1. Your account needs to be opened before you can start the investment process.

Step 2. Your account needs to be funded with a transfer, rollover, and/or a contribution before New Direction IRA will start the secured note transaction.


The borrower cannot be a disqualified person. Disqualified persons include:• You• Your Spouse• Your Ascendants (parents and grandparents)• Your Direct Descendants (children and grandchildren)• Your Direct Descendants’ Spouses• Certain Fiduciaries (CPAs, Attorneys, Financial Planners, etc.)• Retirement Plans held by Disqualified Persons• Entities Owned or Controlled by Disqualified Persons

General IRA Lending Rules IRS Rules

• The note must be a real economic transaction (no zero percent notes or gifts).• Reciprocal notes (where the IRA lends money to an individual who then lends the money back to you) are

prohibited by the IRS.

NDIRA Business Practices

• Payments must be made at least annually.• The account holder is responsible for ensuring that payments are made. If you do not wish to track these payments,

you can hire a loan servicer who will do this for the IRA. Note: New Direction IRA does not service notes. If a payment is missed, we do not take action. A loan servicer will track the payment, but funds must be sent to the IRA.

• New Direction IRA will not fund notes that have no ongoing payment requirement or balloon payments in excess ofthree years from the date of funding.

• We recommend signing up for online access to your account to monitor payment activity.• In order to have sufficient time for required compliance review and processing, NDIRA needs to have completed

paperwork in hand 3 Business Days prior to funding. Weekends and holidays do not count as business days. The three-day period begins when we have received ALL required paperwork and information. Forms received after 12:00pm Mountain Time will be considered as having arrived next business day. For example, if you would like your investment funded by Thursday, completed paperwork must be received by Monday morning.

Collateral Options

IRAs can only hold a note as secured when we have an item of security in our possession. Some security documents include:

• Deeds of Trust • Quit Claim Deeds• Mortgage • Vehicle Titles• Gold • Stock Certificates Endorsed to, or in the IRA’s Name• Real Estate - The way a home loan is secured is determined by state law where the

property is located. The investor needs to find out which security instrument is used in theirstate. In some states it is called a deed of trust, while in other states it is called a mortgage.

Perform Due Diligence



• If you request the borrower’s credit report, the IRA must pay this fee.

• If you are lending to a business, you are responsible for performing due diligence the same as if you were lending to anindividual.

• New Direction IRA only reviews the note to ensure it contains the required content. It is your responsibilityto understand the terms and conditions of the note.

• For information on performing investment due diligence, visit our website.

Investment Timetable

* The time it takes to move funds from other institutions will vary according to that institution’sresponsiveness.



Negotiate Terms and Prepare Loan Documents• After you have found a borrower you can negotiate the terms of the note and prepare the loan documents.

New Direction does not assist with this process.

• An IRA loan has the same process as a bank loan. The note spells out the negotiated agreement betweenboth parties and the security document is listed as collateral if the loan is not paid.

• The note must be a real economic transaction. A general rule of thumb when creating a note is to ask yourself:“Would I offer the same note to a business partner or stranger?” If the answer is yes, chances arethe note is a real transaction.

• Name and address of borrower • Name and address of lender• Principal amount • Interest rate (profit sharing clauses are acceptable)• Payment amount • Payment frequency (payments must be made at least annually)• Date of first payment • Payment type (interest only, amortized, balloon, etc.)• A Signature line for the borrower to sign • Maturity date - Current Maturity Date is Required• A clear and detailed reference to the item(s) of security (car, house, etc.)• IRA Holder’s signature as ‘read and approved’ in the margins of the note signature page

Required Contents of a Secured Note

Titling Instructions

“New Direction IRA, Inc. FBO Joseph S. Smith, IRA”-or- “New Direction IRA, Inc. FBO Account No. 12345678”-or- “New Direction IRA, Inc. FBO Joseph S. Smith, IRA Acct. No. 12345678”

• When investing with retirement funds, it is very important that all related paperwork reference theinvestor as the IRA, not your personal name.

• If these guidelines are not followed and the investment ends up titled in your name and/or social securitynumber, then the asset will have to be distributed from the account.

Please complete all investment related documents using the following guidelines:

Name of Lender*:

*Inherited IRA accounts and 401(k)s follow different naming conventions. Please contact us for details.

Lender’s Address: Lender’s SSN or TIN:New Direction IRA, Inc. 20-0157510 1070 W. Century Dr., Suite 101Louisville, CO 80027

Lender’s Signature:• Only New Direction IRA appointed authorized signers can sign on behalf of the IRA.• DO NOT SIGN ON THE LENDER’S SIGNATURE LINE. You are not an authorized signer for the IRA.• Every page that needs to be signed by an authorized signer must first be signed by you in the margins as

having been “read and approved”.

Step Two - Investment Process


• Once the loan documents have been prepared, the secured note can be funded.• New Direction IRA needs all required documents 3 full business days prior to the transaction date.• Coordination with outside parties must be arranged before the transaction can take place.

Read and Approve Loan Documents

Paperwork required if not using a third party for funding the loan• Buy Direction Letter• Wire instructions if funding via wire• Borrower’s Acknowledgement Letter form signed by borrower• The original note, with the borrower’s original, ink signature• A copy of the note signed by the IRA holder as “read and approved”• The original security document with the borrower’s original, ink signature, a copy of the security document, signed

by the IRA holder as “read and approved,” a copy of the HUD (if applicable as part of a real estate closing), and anamortization schedule, if applicable

Paperwork required if using a third party for fulfillment of loan• Buy Direction Letter• Wire instructions if funding via wire• Borrower’s Acknowledgement Letter form signed by borrower• Account Holder’s Acknowledgement Letter• A copy of the note signed by the IRA holder as “read and approved”• A copy of the security document signed by the IRA holder as “read and approved”• A copy of the HUD if part of a real estate closing• Amortization schedule if payments are amortized• The original note and original security document will first go to the 3rd party. They must be submitted to

our office following the funding and recording.• The note will be considered unsecured until the original security documents are returned to New Direction IRA.• Although New Direction IRA does not require security documents to be recorded with the county, we

strongly recommend it. Security documents should be recorded prior to sending originals to New DirectionIRA for safekeeping.

* New Direction IRA does not provide recording services.

Required Documents



Using Third Parties for the IRA Loan

Fulfillment of Loan (Escrow)• New Direction IRA does not act as a third party for fulfillment of the loan.• Outside parties like attorneys and title companies can be used as an escrow service.• The borrower will send the security documents to the escrow service. New Direction IRA would send the

funds to the escrow service as well.• Once the transaction is complete, the original note and security documents must be returned to our office

after funding and recording.• An Interested Party Designation (IPD) form is required for New Direction IRA to work with outside parties

preparing payoff documents.• Coordination with outside parties such as title companies or attorneys is your responsibility. If you need

assistance with this coordination, New Direction IRA can provide assistance. Additional coordination timerequired will be billed at the hourly rate of $150 per hour.

Loan Servicer• New Direction IRA does not provide loan services other than accepting payments.• New Direction IRA will not notify you when payments are made or if payments are late or not received.• If you are using a loan servicer, the IRA will need to pay the fees incurred by this service.• The borrower will make payments to the loan servicer and the loan servicer will pass along the payments

to your IRA. The loan servicer will track payments on behalf of your IRA.• If you wish to designate a third party loan servicer, please provide us with the loan servicing agreement.• An Interested Party Designation (IPD) form is required for New Direction IRA to work with the loan servicer

directly.• Coordination with outside parties such as a loan servicer is your responsibility. If you need assistance with

this coordination, New Direction IRA can provide assistance. Additional coordination time required will bebilled at the hourly rate of $150 per hour.

Preparing Loan Documents• You are responsible for creating the note. New Direction IRA does not provide loan document templates.• New Direction IRA does not verify verbiage of the loan.• Outside parties like attorneys and title companies can be used to prepare the loan.• An Interested Party Designation (IPD) form is required for New Direction IRA to work with and communicate with outside parties preparing the loan.• Coordination with outside parties such as title companies or attorneys is your responsibility. If you need assistance with this coordination, New Direction IRA can provide assistance. Additional coordination time required will be billed at the hourly rate of $150 per hour.

Step Three - After the Investment


• Congratulations on the addition of a secured note to your retirement account! We hope your investmentwill provide your IRA with significant growth.

• Once you have purchased the secured note, any inquiries you may have should be directed to our ClientRelations Department.

IRA Owns Secured Note

Arrange for your borrower to make payments in the name of:

“New Direction IRA, Inc. FBO Joseph S. Smith, IRA”-or- “New Direction IRA, Inc. FBO Account No. 12345678”-or- “New Direction IRA, Inc. FBO Joseph S. Smith, IRA Acct. No. 12345678”

Mail payments to:

New Direction IRA, Inc., 1070 W. Century Dr., Ste. 101, Louisville, CO 80027

Collecting Payment Online payments:

“Rent & Note payments to your IRA can now be made online through myDirection.com!

Your IRA’s tenants and borrowers have the option to make rent and note payments online via ACH (eCheck) at www.mydirection.com – and it’s free! At mydirection.com, IRA tenants or borrowers will click the “Pay Now” button. The pay-ment page will guide your tenants or borrowers through the free and easy payment process.

If the payment is submitted before 2:30pm MST, the payment will be processed the same day it is received. Payments received after 2:30pm MST will be processed the next business day. Please contact your client representative with any questions.”

• Payments must reference the IRA holder and indicate if the payment is principal, interest or both.• New Direction IRA recommends signing up for online access to your account to monitor payment activity.• Payments must be made at least annually and the IRA holder is responsible for ensuring that payments are

made.• If your note does not require at least one payment of $100 or more in a given year, the borrower will be required

to submit a letter for that year stating that the note is still active and performing according to terms.

Step Three - After the Investment

• It is your duty to track payments to your IRA. If payments have stopped, contact the borrower.• If the borrower does not comply with the loan terms New Direction IRA strongly recommends seeking outside help (legal counsel).• If funds are deemed uncollectable the loan will become a zero value asset and a 1099 will be issued to the borrower for the unpaid balance of the note. In order to adjust the asset value to zero and remove it from the account New Direction IRA will need:1. Proof that the investment is worthless. This is a letter required by the IRS. • A letter of proof can come from the borrower, 3rd party (attorney or CPA), or public document.

• Documentation of your efforts to collect the funds.2. Letter from the IRA holder agreeing to the zero value. • This letter must state that the IRA holder believes the asset has no value and include instructions to remove the asset from the account.

3. A Distribution Form • In order to remove the zero value asset from the account, you will need to fill out a distribution form. This form instructs New Direction IRA to distribute the asset from the IRA to the IRA holder.4. An Assignment Letter • To move the zero value asset from the IRA to the IRA holder, New Direction IRA requires an assignment letter (provided by the IRA holder, not New Direction IRA) with the distribution form. This document needs to be signed by you.

Once the above 4 documents have been received, New Direction IRA can remove the zero asset from your IRA.

Defaulted and Uncollectable Loans

• The final payment for the loans must be accompanied by a payoff statement.• The payoff statement is supplied by you (not New Direction IRA) and must include: • Total loan amount • Principal amount paid • Interest paid• The payoff statement needs to be signed as read and approved by the IRA holder.• The final payment will not be deposited into the IRA holder’s account until New Direction IRA has a payoff statement.• After the final payment has been made, New Direction IRA can release the security documents.• For loans secured by real estate, any Release of Deed of Trust form (signed read and approved) must be sent to New Direction IRA for execution. New Direction IRA does not supply the Release of Deed of Trust form.• For other security documents a release form (signed read and approved) must be submitted in order for New Direction IRA to release the security documents. Once you have purchased the secured note, any inquiries you may have should be directed to our Client Relations Department.

Paying Off a Secured Note


Fee Schedule

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4. SIGNATUREAnnual record keeping fees are not prorated and are withdrawn from your undirected funds (defined as any cash in the Custodial Account not invested pursuant to a specific investment direction by you), unless you submit payment to us directly prior to the due date by check, credit card, or debit card. Transaction fees are due prior to funding the transaction. Fees paid from your account will be reflected on your statement. If there are insufficient undirected funds in your account, we may liquidate other assets in your account to pay for such fees after a 30 day notification, in accordance with your Plan Agreement and Disclosure. In accordance with your Account Application, this Fee Disclosure is part of your Plan Agreement with the Administrator and must accompany your Application. If a signed Fee Disclosure is not received with your Application, fees will be based on “Option 2—Account Value”.

In accordance with your Plan Agreement and Disclosure, which is available on our website, custodial fees, described below, are part of the Plan Agreement. The Custodian shall be entitled to receive, from the assets held in the Custodial Account, a fee equal in amount to all income that is generated from any undirected cash which is held by the Custodian in a deposit or product of an FDIC - or other United States government-insured financial institutions, United States government securities, or securities that are insured or guaranteed by the United States government, as provided in the Plan Agreement and Disclosure. The Custodian’s fees from the undirected funds in the Custodial Account are associated with cash management activities, including, but not limited to, account maintenance, depository bank selection, transaction processing, sub-accounting, record keeping, and other services performed under the terms of this Agreement. The Custodian retains the right, but does not have the obligation, to reduce this fee by rebating a portion of the fee into the Custodial Account. The Depositor agrees that this fee may be retained by the Custodian as compensation for the services provided by Custodian under this Agreement. The Custodian may pay all or an agreed portion of this fee to the Administrator as agreed between the Custodian and the Administrator. The Custodian reserves the right to change all or part of the Custodial Fee Schedule at its discretion with 30 days advance written notice to Depositor.

I understand that if fees are not paid within thirty (30) days after New Direction IRA, Inc. has mailed the past due notice, New Direction IRA will begin the process of closing the account. I understand that any asset distributed directly to me as part of closing my account will be reported to the IRS on Form 1099 and may subject me to possible taxes and penalties. I agree that accounts with past due fees, unfunded accounts, and accounts with zero value will continue to incur administrative fees until such time as I notify New Direction IRA, Inc., of my intent to close the account or until New Direction IRA, Inc., and/or Mainstar Trust resigns.

Printed Name: _________________________________________________________________Signature: _________________________________________________________________ Date:_________________________

New Direction IRA, Inc. 1070 W. Century Dr., Ste. 101Louisville, CO 80027p: 303-546-7930 | f: 303-665-5962

1. ANNUAL ADMINISTRATION FEE Please check one box.(Annual Administration fees are due when your IRA purchases an asset.)

Option 2: Value Based - Assessed on the total market value of the

assets in the account. Billed semi-annually (i.e. twice per year).*

Invested Market Value Semi-Annual Administration Fee:

$0 - $14,999.99 $97.50

$15,000 - $29,999.99 $125.00

$30,000 - $44,999.99 $162.50

$45,000 - $59,999.99 $187.50

$60,000 - $89,999.99 $225.00

$90,000 - $124,999.99 $262.50

$125,000 - $249,999.99 $325.00

$250,000 - $499,999.99 $387.50

$500,000 - $749,999.99 $750.00

$750,000 and up $925.00

Pay fees by:

Credit Card (Visa, MasterCard, Discover)

Fund from Account

Credit Card Type:________________ Card Number:_____________________________ Exp. Date: ___________

Exact Name on Card:___________________________________________ 3 Digit Security Code: ___________

Signature: ____________________________________________________________________________________

• Credit card information must be kept current. Unpaid fees will be deducted from the account if invoiced amount is not paid within 30 days of the invoice date.

2. PROCESSING FEESIRA Setup Fee:

$50 - One-Time IRA Setup Fee (charged at the time of account establishment)

Transaction Fees: Due when your IRA purchases an asset. $95 - Purchase, Sale, Exchange of any Asset (Except Real Estate)$250 - Purchase, Sale, Exchange of Real Estate $345 - Leveraged Real Estate $50 - Capital Calls, Note Modifications or Conversions, Additional Fundings, Re-Registration, Partial Sale of Non-Real Estate$40 - Purchase, Sale, Exchange, or Re-Registration of any Precious Metals

Movement of Funds Fees: Due when money moves from your IRA. $5 - ACH Transfer, Trust Check $25 - Cashier’s or Other Official Bank Check $30 - Overnight Mail$30 - Wire Transfer $40 - Foreign Wire Transfers $10 - Void Check Fee $30 - Returned Item or Stop Payment Request

Other Fees: Due when services are rendered.$10 - Annual statements received by mail (electronic statements provided for free)$0 - Real Estate Bill Pay via myDirection.com $10 - Real Estate Bill Pay via PAL Form Submission $500 - Express Real Estate Processing (1 business day rush fee) $250 - Express Non-Real Estate Processing (1 business day rush fee) $75 - ROTH Conversion or Recharacterization $50 - Late Fair Market Valuation ($50 per notification) $25/month - Late Fee (assessed 30 days after fee due date)$150/hr. - Special services (such as research of closed accounts, legal research, expedited

investment review or additional processing required for certain complex transactions, out of office real estate closings)

Transfers Out, Partial Distribution or Full Distribution: 0.5% of the value

• Minimum of $75 (Full Distribution/ Transfer Out) • Maximum fee of $250 (Partial and Full Distribution/Transfer Out)

Plus Movement of Funds Fees and/or Transaction Fees as they may apply.Required Minimum Distributions are only subject to Movement of Funds Fees and/or Transaction Fees.

Option 1: Quantity Based - Assessed and billed annually* $295 Annual Fee Per Asset $195 Leverage on an Asset

Example 1: Annual Fee Per Asset

Real Estate Asset: $295

Total Annual Administration Fee: $295

Example 2: Annual Fee Per Asset

Real Estate Asset: $295

Asset with Leverage: $195

Total Annual Administration Fee: $490

*Annual fee is charged when you purchase an asset and annually on the anniversary monthof the first asset purchased in your account thereafter. Mortgages used to purchase real estate are considered a separate asset and billed at the $195 rate.

OR

3. HOW WOULD YOU LIKE TO PAY FEES?

* New accounts with no activity after 90 days will be closed.

* Semi-Annual fee is charged when you purchase an asset and semi-annually thereafter. For properties that hold mortgages, the value is calculated based on the full property value.

5. TELL US ABOUT YOUR INVESTMENT

4. HOW WOULD YOU LIKE US TO FUND THE TRANSACTION?

3. HOW WOULD YOU LIKE US TO PROCESS THE TRANSACTION?

2. HOW WOULD YOU LIKE TO PAY FOR THE TRANSACTION? (All fees are due at time of transaction.)

1. ACCOUNT INFORMATION


Promissory NoteBuy Direction Letter

NOTE: All investment paperwork must be titled correctly: New Direction IRA , Inc. FBO (Account Owner’s Name) IRA. If you have a 401(k) or beneficiary account, please call our office for correct vesting (titling).

I hereby authorize and direct the Administrator and/or Custodian to BUY the following asset for my account:

Create New Note Buy Existing Note Carry Back Note from a Real Estate Sale Convertible Note Promissory Note Subscription Agreement Borrower(s) Name(s): (If more than one borrower, include all names. If the borrower is an entity, also list the name of the entity’s authorized signer.)

Borrower’s Address: City: State: Zip:

Borrower’s Telephone Number: Borrower’s SSN: (SSN is for 1098 tax reporting purposes)

Percentage of Ownership:%

Dollar Amount to be Funded:$

Note Amount: (face amount of note)$

Principal Balance (for existing note)$

Payment Frequency: Monthly Annually Other:_______

Interest Rate: Payment Amount:$

Amortized Interest Only (please attach Amortization Schedule)

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Standard Processing (3 business days) Express Processing (1 business day, $250 rush fee)Please contact your transaction specialist to see if a rush option is possible.

I have included the following documents with this Buy Direction Letter: Original Deed of Trust or Mortgage (if secured & not being closed through a title company),

Original Promissory Note (unless using a title company), Settlement Statement (if funding a closing) - Borrower’s Acknowledgement Letter

Your Name: (as it appears on your account, not your title or vesting name) New Direction Account Number:

Account Type: Traditional IRA Roth IRA SEP IRA SIMPLE IRA Inherited IRA Individual 401(k) HSAPhone Number (This is the number we will use for all calls relating to this transaction):

Email Address:

Choose One:

Your Account

Credit Card

Credit Card Type: (the following are accepted) Visa MasterCard Discover

Card Number:____________________________ 3 Digit Security Code: ___________ Exp. Date: ___________

Exact Name on Card:___________________________ Signature: _____________________________________

Fund the transaction via: Check ($5 fee) Cashier’s Check ($25 fee) ACH Transfer ($5 fee) Wire ($30 fee, please attach wiring instructions)

Would you like a call to confirm wire? (Please note that this is a courtesy call and will not hold up the funding process.) Yes NoMake Check Payable to: Payee Telephone Number: (needed for overnight deliveries)

Send Check to: City: State: Zip:

Deliver the transaction (funds and paperwork) via: Standard Mail Overnight Mail ($30 fee applies)

6. AUTHORIZATIONI confirm that I am directing New Direction IRA, Inc., the Administrator, to complete this transaction as specified above. I understand that my account is self-directed, and I take complete responsibility for any invest-ment I choose for my account, including the investment specified in this Buy Direction Letter. I understand that neither the Administrator nor the Custodian (Mainstar Trust) sells or endorses any investment products, and that they are not affiliated in any way with any investment provider. I understand that the roles of the Administrator and the Custodian are limited, and their responsibilities do not include investment selection for my account. I acknowledge that neither the Administrator nor the Custodian has provided or assumed responsibility for any tax, legal or investment advice with respect to this investment, and I agree that they will not be liable for any loss which results from my decision to purchase the investment. I understand that neither the Administrator nor the Custodian has reviewed or will review the merits, legitimacy, appropriate-ness or suitability of this investment, and I certify that I have done my own due diligence investigation prior to instructing the Administrator to make this investment for my account. I understand that neither the Administrator nor the Custodian determines whether this investment is acceptable under the Employee Retirement Income Securities Act (ERISA), the Internal Revenue Code (IRC), or any applicable federal, state, or local laws, including securities laws. I understand that it is my responsibility to review any investments to ensure compliance with these requirements.

I understand that in processing this transaction the Administrator and the Custodian are only acting as my agent, and nothing will be construed as conferring fiduciary status on either the Administrator or the Custo-dian. I agree that the Administrator and the Custodian will not be liable for any investment losses sustained by me or my account as a result of this transaction. I agree to indemnify and hold harmless the Administrator and the Custodian from any and all claims, damages, liability, actions, costs, expenses (including reasonable attorneys’ fees) and any loss to my account as a result of any action taken in connection with this investment transaction or resulting from serving as the Administrator or the Custodian for this investment, including, without limitation, claims, damages, liability, actions and losses asserted by me. I understand that if this Buy Direction Letter and any accompanying documentation are not received as required, or, if received, are unclear in the opinion of the Administrator, or if there is insufficient Undirected Cash in my account to fully comply with my instructions to purchase the investment and to pay all fees, the Administrator may not process this transaction until proper documentation and/or clarification is received, and the Administrator will have no liability for loss of income or appreciation. I understand that my account is subject to the provisions of Internal Revenue Code (IRC) §4975, which defines certain prohibited transactions. I acknowledge that neither the Administrator nor the Custodian has made or will make any determination as to whether this investment is prohibited under §4975 or under any other federal, state or local law. I certify that making this investment will not constitute a prohibited transaction and that it complies with all applicable federal, state, and local laws, regulations and requirements.

I understand that my account is subject to the provisions of IRC §§511-514 relating to Unrelated Business Taxable Income (UBTI) of tax-exempt organizations. If this investment generates UBTI, I understand that I will be responsible for preparing or having prepared the required IRS Form 990-T tax return and any other documents that may be required. I understand that neither the Administrator nor the Custodian makes any determination of whether or not investments in my account generate UBTI. I understand that the assets in my account are required by the IRS to be valued annually as of the end of each calendar year. I agree to provide the prior year end value of this investment by no later than January 10th of each year on a form provided by the Administrator, with substantiation attached to support the value provided. I understand that with some types of accounts there are rules for Required Minimum Distributions (RMDs) from the account. If I am now subject to the RMD rules in my account, or if I will become subject to those rules during the term of this investment, I represent that I have verified either that the investment will provide income or distributions sufficient to cover each RMD, or that there are other assets in my account or in other accounts that are sufficiently liquid (including cash) from which I will be able to withdraw my RMDs. I understand that failure to take RMDs may result in a tax penalty of 50% of the amount I should have withdrawn. I understand and agree that neither the Administrator nor the Custodian bears or assumes any responsibility to notify me or to secure or maintain any fire, casualty, liability or other insurance coverage, including but not limited to title insurance coverage, on this investment or on any property which serves as collateral for this investment. I acknowledge and agree that it is my sole responsibility to decide what insurance is necessary or appropriate for investments in my account, and to direct the Administrator in writing (on a form prescribed by the Administrator) to pay the premiums for any such insurance.

Transactions with insufficient funds will not be processed until sufficient funds are received. If fees are being deducted from your account, the full amount of the transaction plus fees must be available before your transaction can be processed.

Signature: ______________________________________________________________ Date: _______________________________Please read the disclosure above the signature line before signing and dating.

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Promissory NoteBuy Direction Letter

FOR INTERNAL OFFICE USE ONLY:

5. TELL US ABOUT YOUR INVESTMENT (CONTINUED)Maturity Date: (including extensions) Is Your Note Secured?

Yes NoSecurity Document: (include property address if secured by deed or mortgage)

Loan Servicer Name: Check if None

Phone Number: Email Address:

Escrow/Title Co./Attorney Name(s): (Entity(ies) responsible for closing the transaction between account and the Seller.) NOTE: Please attach if the Note is involved in the purchase of a real estate settlement statement. Check if NoneEscrow/Title Co./Attorney Phone: Escrow/Title Co./Attorney Email:

Special Instructions:

Return To:______________________________ Sig Check Fee Option and Invoice Cycle:___________________________Balance:________________________________ RTN Trans Fee: $__________________________Cusip:__________________________________ TNet Annual Admin Fee: $__________________________Trans Code:_____________________________ Scan for Funding Payment Fee: $__________________________Fund Date:______________________________ Other Fee: $__________________________Amt Funded $___________________________ Total Fees: $__________________________

New Direction IRA, Inc. 1070 W Century Dr Ste 101Louisville, CO 80027p: 303-546-7930 | f: 303-665-5962email to: [email protected]

1. CLIENT INFORMATION

Client Name: New Direction Account Number:

page 1 of 1 Copyright 2011 New Direction IRA, Inc. BAL rev 3/16

Borrower’s Acknowledgement Letter

4. BORROWER’S SIGNATURE:

As the borrower, I agree to comply with the above terms.

Signature: ______________________________________________________________ Date: _____________________________

Print Name: _______________________________________________________ Title: ___________________________________(If Corporate Borrower)

2. BORROWER INFORMATION

Borrower’s Name: Borrower’s SSN or TIN:

Borrower’s Address: City: State: Zip:

3. BORROWER’S ACKNOWLEDGEMENT

• New Direction IRA has received instructions for the above-referenced IRA holder concerning his/her intent to lend IRAfunds.

• As this asset is to be held in an Individual Retirement Account, the following instructions must be followed to ensurecompliance with both IRS requirements and New Direction IRA, Inc. policy.

• All payments, income distributions and/or payoffs for this holding must be sent to New Direction IRA, Inc. Under theInternal Revenue Code, it is never acceptable to send funds directly to an IRA holder or IRA holder’s nominee. Should thathappen, you agree to indemnify New Direction IRA, Inc. against all liability concerning IRS compliance.

• Lender is: Lender: New Direction IRA, Inc. FBO client name, IRAAddress: 1070 W. Century Dr. Suite 101, Louisville, CO 80027 Tax ID: 20-0157510

• The original note showing the proper vesting is to be held by New Direction IRA, Inc.• If an IRA holder has any questions concerning the IRA, such as, but not limited to, payments, distributions or fees, you

agree to inform the IRA holder to contact New Direction IRA, Inc. directly. Under no circumstances will third party inquiriesbe answered.

• You agree to honor all written instructions from New Direction IRA, Inc. concerning changes in asset registration.• You agree to inform the IRA holder that you have referred New Direction IRA, Inc. as an accommodation and that New

Direction IRA, Inc. neither endorses your product nor has received consideration from you.• You agree to inform New Direction IRA, Inc. promptly of any changes in address, telephone number, or company status

(such as bankruptcy liens, regulatory agency investigations or litigation).• You acknowledge and agree to inform the IRA holder that New Direction IRA, Inc. will not record principal balance changes

unless amortization numbers are provided with each payment.• You certify that you are not a disqualified person or entity in respect to the above named IRA as described in IRC Section

4975.• If the note does not require at least one payment of at least $100 in a given year, you agree to submit a letter for that year

stating that the note is still active and proceeding according to that note.

New Direction IRA, Inc. 1070 W Century Dr Ste 101Louisville, CO 80027p: 303-546-7930 | f: 303-665-5962

1. CLIENT INFORMATION

Client Name: New Direction Account Number:

page 1 of 1 Copyright 2011 New Direction IRA, Inc. AHAL rev 07/15

Account Holder’s Acknowledgement Letter

3. IRA HOLDER’S SIGNATURE:As the IRA Holder , I agree to comply with the above terms.

Signature: ______________________________________________________________ Date: _____________________________

2. IRA HOLDER’S ACKNOWLEDGEMENT

The following items are the responsibility of the IRA holder when the IRA is investing in a secured note:

• The original note must be in the possession of New Direction IRA, Inc., where it is held in our vault. I understand thatthe follow-up on the delivery of the original note from the closing to NDIRA is mine. Failure to obtain the original notemay result in the IRA having to purchase a lost instrument bond, the cost of which varies from county to county butcan run to about 1.5% to 2.5% of the full face value of the note.

• The purchase of a lender’s title policy for the IRA is my responsibility, but is not required by NDIRA for funding. NDIRAwill review the named insured on the title policy if you have elected this coverage.

• In the event the IRA is lending on improved property, I understand that it is my responsibility to have the IRA namedas an additional insured on the hazard insurance policy, but that this is not an NDIRA requirement for funding thetransaction. It is also my responsibility to ensure that the IRA remains continuously insured throughout the term ofthe note by requesting the insurance certificate be sent to me personally on an annual basis should that be a lenderrequirement. NDIRA takes no responsibility for enforcing this or any other terms of the loan.

• If the note has an unpaid principal balance at the maturity date, it is the IRA holder’s responsibility to either modifythe note extending the maturity date or to deem the note as un-collectible (proper documentation required).

• New Direction IRA strongly recommends that security documents be recorded with the county. I understand thatNDIRA does not provide recording services and that I am responsible for recording any security documents that Iwould like to have recorded.

Your Guide to Secured Notes in your IRA Guide to Secured Notes in your IRA s t. ... With a secured...

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Transcript of Your Guide to Secured Notes in your IRA Guide to Secured Notes in your IRA s t. ... With a secured...