What is a self-directed IRA?
According to Wikipedia “A Self-Directed Individual Retirement Account is an IRA that requires the account owner to make investment decisions and investments on behalf of the retirement plan.”
Can I purchase Real Estate with funds from my self-directed IRA?
If your IRA buys a property for cash, the transaction presents little difficulty, with a few restrictions.
Examples of permissible real estate investments in a self-directed IRA:
- Commercial property
- single-family homes
- apartment buildings
- purchase of mortgages
Problems arise in structuring financing for real estate purchases where part of the purchase price is borrowed. Mortgage funding will be more challenging. Commercial lenders do make non-recourse mortgage loans. But since they will have to look solely to the property’s income and value for repayment, the down payment requirements will likely be higher than an ordinary mortgage loan.
You might also consider trying to find private lender funding or pooling your IRA’s funds with self-directed IRA’s owned by others in partnership, which, other than the prohibited transactions (relatives and such) is permitted under the regulations. You can even purchase Mortgages with funds from your self-directed IRA. With all investments, please check with your accountant or financial planner for more detailed information to determine if it is right for you.
We have a program for you to purchase Mortgages called Mortgages as Investments! Call me to purchase Real Estate (716) 650-0051and together with your Financial Planner we can get you started!
