Buying Rental Props with Self Directed IRA

[Chris Licavoli]

Greetings BPers!

I would like to learn how to purchase a rental property through my self directed IRA. I have an account through Equity Trust. I have enough in my SD IRA to make the down payment of 25%, but how do you get a loan through the IRA? No bank would make a loan in the name of the IRA entity I would think. I can qualify personally, for the loan, but I am not sure if a bank would make a loan to me, on a property that is owned by my IRA? If anyone has any experience in this please reply here

Thanks!

[Ned Carey]

Owning rental real estate in you IRA is not a particularly good use of the money. If you pay all cash you do not get the advantage of leverage. Real estate has some tax advantages that will do your IRA no good. If you have to borrow in order to buy in your IRA, the borrowed money will be subject to taxes that negate the value of the IRA - This puts you right back at point one. There is no advantage of leverage in an IRA.

ON the other hand owning real estate related assets can be very beneficial, tax liens, mortgages/ hard money lending, private placements on large commercial properties. commercial ground leases, etc.