Using gifted or ROTH IRA funds for downpayments?

[Daniel Dietz]

Hello,

I am looking for a little advice on the best way to use a couple of different types of money towards down payments of a couple of properties that we want to buy at pretty much the same time (retiring landlord selling portfolio). I am going to be seeing a couple lenders in the next week. 

Of the 12 units spread over 5 properties, there is a 4plex and duplex that we would buy with our SDIRAs (we currently have 3 units that way). I am thinking we should do those last as the non-recourse lenders seem to be the least picky about where the down payment comes from.

There are 2 duplexes that we (3 way partnership) are planning on using commercial lending for. Right now we are finding rates in the upper 4% range for a 10 year lock. We would like to come in to this with 25% down, but the lender would let us go to 20% if needed. We are thinking this set would be the middle purchase.

The possible tricky one is that I want to buy one of the duplexes in my name only, not the partnership, and do a FHA or other 30 year fixed conventional on that one. This one might make an ideal retirement home 10+ years down the road for me, so it seems like this would keep it simpler than buying it out from the other partners then, and they are both fine with that. We are thinking this should be the first purchase.

I would need about 45K for a 25% down payment on this one. My source of funds are taking withdrawals of ROTH contributions (last choice) or using part of a large monetary gift that my parents are going to be gifting to me as part of their estate planning. They will be filling out the forms 709 (I think that is what it is called). 

If they give me a gift of say 50K and file the appropriate forms to show that it is not a 'loan' in any way, are those funds acceptable for a down payment on a conventional investment property loan? Would there need to be a certain amount of 'seasoning' need before they could be used? IF it was not acceptable to do it that way, if I were willing to do an owner occupy multifamily (not thrilled with the idea but would consider it) would the gifted funds be acceptable then?

Hope that all makes sense. A summary would be that it seems I would want to do the conventional first as they are the most picky about where the funds come from. 

Thanks, Dan Dietz