Using Roth IRA funds for start up

[Christine Walsh]

Hello!

I have some funds in my Roth IRA that aren't performing right now (sitting in money market waiting for a down turn to re-invest). I am thinking about using it to fund a multifamily purchase. Is this stupid or worth talking to a CPA? What sort of penalties would I incur? I have not done any deals yet. Still trying figure out my launching off point. Would I be better off using it to flip a house? Thanks for your help!

Christine

[Mat Sorensen]

Christine,

I personally invest my retirement account in real estate and have helped over a thousand clients do the same. You can absolutely use your Roth IRA to own real estate, however, you need to learn the rules of the road first as their are two places you can make mistakes (prohibited transactions and UBIT). Why buy mutual funds you can't even understand when you can invest in something you know!? The first step is understanding the rules of and then getting the Roth IRA to a self-directed IRA custodian who will allow your Roth IRA to buy real estate. You may have the Roth IRA own an LLC 100% and then the LLC owns the multi-family property and you may have partners. There are many options and variations.