Bridging the gap between borrowed IRA funds and HELOC

[Sandy Sawyer]

So I won this bidding war by offering cash, but I don't really have enough to close, so I'm borrowing from the IRA to do the deal. I wanted this house because it's right up the street from elderly mother-in-law. Now, as a realtor, I'm privy to another deal up the street that would be a great rental. Thinking that if I could get a loan on the one I'm currently getting, I could put a down payment on the other one and have both. However, I'm finding out that in Texas banks won't lend money until title is held for at least 6 months! I'll take out my initial Roth investments if I have to, but if there's anyone out there that would love to lend me the money to span the gap and have the first lein on a home that easily appraises for over $200k and a LTV ratio that's 50% or better, please reach out to me so I can get both homes and rent out one of them. Any advice on this would be appreciated.

[Dmitriy Fomichenko]

Sandy, it is called a 60-day rollover. And yes, if you take a distribution from an IRA and deposit your funds into another qualified retirement plan within 60-days window it will not be considered a distribution. It is really not designed for what you intend to use those funds, being one day late will result this to be counted as a distribution with applicable taxes and penalties.