Financing while using SDIRA funds as down payment

[Aaron Parker]

I'm trying to figure out how to ask this--I feel like I have 3 pieces of a 500 piece puzzle.

What I have:

-Self Directed Traditional IRA which has sufficient funds for a down payment for a property, but not for an outright purchase.

What I want:

A non-recourse mortgage using SDIRA money for a down payment.

I'm not sure I can even do this--I went to the State Foreclosure Laws page and looked at Wisconsin, but don't really know what I'm reading. I didn't see the word 'recourse'.

I guess what I'd like to hear from anyone reading this is what would be the best course of action for investing this SDIRA given the above circumstances.

[Will Barnard]

Andrew, I will take a stab at your questions. You can "partner" with your IRA, but as I stated before, there are rules and limitations to it, you should consult a tx professional on this who is familair with SDIRA's.

As far as flipping, you need to know that flipping homes directly competes with non-IRA entities and as such, profits are subject to UBIT, rehardless if you have a pertnership with the IRA in which the IRA held 60% and your funds outside the IRA held 40%.
If the additional funds needed was say $10k or less, and if you are married, you could simply place that $10k into the IRA as your annual max contribution.

Better yet, if you are self employed and have no full time employees (other than your spouse) you can set up a solo 401k plan in which the max contributions are much higher than that of an IRA, you have borrowing provisions of up to $50k or 50% of your vested interest, and using debt financing in the 401k is not subject to the UDFI which triggers UBIT.