Financing My First House Flip with Home Equity Loan or IRA money

[Zerolynn Ann Murray]

I am a Real Estate Agent in the Green Bay Wisconsin area. I want to purchase and flip my first home. The only money I have access to is my IRA or borrow from a rental home that I have in another state that has appreciated 100K over the purchase price. I do not really want to use my IRA but I have access to that money quickly if I find a property. Any recommendations or alternative financing I should consider?

[Carl Fischer]

@Zerolynn Ann Murray

Welcome to Bigger Pockets!!

You can certainly use a self-directed IRA to purchase a property. There are some things to consider about using an SDIRA in this situation.

1. A self-directed IRA is a type of IRA that allows you to use your IRA funds to buy real estate (for investment purposes)
2. If you use your SDIRA for multiple flips a year, you may become subject to UBIT
3. You personally (or any other prohibited person) may not do any physical labor on the property
4. All expenses must be paid by the SDIRA
5. All proceeds must be returned to the SDIRA when the property is sold