Buying a first rental property in Kissimmee fl

[Julie Sparks]

We are in the process of buying a 4 bedroom townhouse in Kissimmee fl. Its not on the market but the realtor that is handling this property said that the owner wants $195,000. We dont know where to begin. The down payment of 20% and losing costs will be taken from our IRA. I know its going to put us in a higher tax. Is this a good idea. I was reading also about only 10%. Any suggestions would be greatly appreciative

[Bryce Litwin]

If this is a rental property, the lender will likely require 20-25% down payment. If funds are coming from your IRA it should not effect your tax rate. Make sure you have plenty of additional funds in the IRA to deal with repairs/maintenance/capital expenses/vacancies, etc. as you cannot just fund the IRA easily beyond your yearly allowed contribution.