Can I use a Self Directed IRA for a down payment on a VRBO?

[Brian Coffman]

Can I use my self directed IRA funds as a down payment on a vacation rental investment property? If so, can I then use a traditional mortgage for the remainder of the purchase? Also, am I allowed to use the property at all for personal use when not rented (like 40-60 days/yr)?

[Brian Eastman]

@Brian Coffman

If your IRA is involved in the transaction, then it is an IRA owned property.

The IRA must obtain a non-recourse loan. You may not place a personal guarantee on the loan as this would violate IRS rules.

You may never use the property personally. The property is purely an investment asset of the IRA.

One invests their IRA in a vacation rental because that vacation rental provides the best possibility of return on investment to the IRA, not so they can use it.