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Updated almost 5 years ago on . Most recent reply presented by

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Tim B.
  • Investor
  • Cottage Grove, OR
4
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12
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Can I buy investment real estate with my ira funds?

Tim B.
  • Investor
  • Cottage Grove, OR
Posted

is there a way to take some of the $ out of my ira & use it to pay cash for an apartment building without causing a taxable event?

if so, can i stick the cashflow generated from the apartment building into my general living expenses account or would it have to be deposited back into my ira account?

note 1: i have a 7 figure ira & this purchase would only represent a 37% withdrawal from it.

note 2: i also own 21 other rental properties (with another house & another duplex in contract to buy & offers on two more that i want to buy, all with cash.)

note 3: i retired last december at 49 & am living very well off the cashflow generated by my rental properties.

note 4: my vanguard funds have been totally flat for the last year. havent made a penny on them, but my real estate holdings have exploded in value & the rents have all been raised, fantastic cashflow even after all expenses

Most Popular Reply

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17,854
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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
6,249
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17,854
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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
Replied

@Tim B.

You can buy real estate in your retirement account, but in order to do so you need a 'self-directed' IRA or 401k. Once such account is established, you can rollover funds from your current IRA and new IRA would be the owner of the property. Since the property owned by the IRA, all income belongs to the IRA and all expenses must be paid from the IRA.

Since there are no tax benefits when you own RE in your IRA, you may want to consider other alternative investments such as private lending.

  • Dmitriy Fomichenko
  • (949) 228-9393
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