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Updated almost 7 years ago on . Most recent reply
Turnkey rentals with IRA
I have around 50,000 in retirement that I want to put into a self-directed IRA. Afterwards, I am considering putting 20% down on one or two turnkey rentals. Is this an option? If the rental goes uninhabited, can I make the monthly payments with the IRA? Thanks!
Most Popular Reply
An IRA may purchase property using a mortgage. Keep in mind, it is the IRA that owns the property, not you. The IRA would have to cover any expenses such as mortgages, property taxes, etc.
An IRA must obtain a non-recourse loan, meaning no personal guarantee from you. The commercial lenders that offer such loans typically want to see 30-40% down, 10-15% in reserves and they want to lend about $50K minimum for it to be worth their while.
Some turnkey rental operators will have a pool of private lenders willing to work with different terms.