Self Directed IRA's? Any advice

[Bennett Schwartz]

Hi BP,

I have an investor who is willing to take money out of his IRA to invest in a multifamily building. I know there are a lot of rules about doing it, anyone have experience with this? Can I partner with him on it? Do we have to purchase the whole thing for cash or can we get a loan? How much extra would we have to pay in soft costs if any?

Any advise would be helpful.

Thanks in advance

[Taylor L.]

So yes, there are a lot of rules. Your investor can't do any work on the property, can't let his tools be used for work on the property, can't use his credit to qualify for loans on behalf of the SDIRA, on and on.

You do not have to purchase all cash and you can probably obtain financing, but your friend can't use his credit to help qualify. He'll need to pay setup costs and transfer costs for his SDIRA. A Checkbook Control IRA might make more sense depending on his goals.