Self Directed IRA cash out refinance options

[Jeff Porter]

1 Setup Self Directed IRA Account and fund it.

2  Buy property $100,000 with funds from the SDIRA.

3  Collect rents, pay expenses, manage property through SDIRA.

Questions:  

Can the IRA take out a (non-recourse) loan against the property?

What can the cash out proceeds be used for (lending, buying another property, etc)?

Are there any taxes that would be due on the borrowed money?

Thanks in advance for any feedback, trying to be clear, hope this isn't too cryptic!

[Daniel Dietz]

@Jeff Porter @Dmitriy Fomichenko gave you some good guidelines above. (He is my SOLO401K provider too :-) )

I would add from the account holder side a few things to be aware of. We use NASB off of that list. They are great to work with but have quite a few restrictions too, such as; minimum 50K loan, only max of 60% LTV, no pre 1940 properties, etc.... Just want to make sure what the rules of the lender are BEFORE you go into something like that.

We have found a Private Lender (friend) that we have done one and soon a second "HELOC" type loan on properties we own outright in our SOLO401Ks. We owned house worth 100K, he gave us a 60K non recourse loan @5% for 5 years. We then used that as part of the down payment along with 40K 'cash on hand' in our accounts on a 250K fourplex that we bought. The trick is finding the Private Lenders in the first place!

Dan Dietz