Hey @TJ P.
Sorry, I wasn't very clear on that. So basically you need to decide if you want to use this money as an IRA wealth building strategy, or if you want to "start your RE empire" so to speak. I would advise going the IRA wealth building route, but I'll outline the 2 options.
First, you can decide that you want to use this money as an IRA wealth building strategy using RE as your investment of choice. If you go this route, you need to understand that all assets will be IRA assets. You wont have access to the property for personal use, the funds the property generates, and you wont be able to use the equity in the home for any personal activity. You may, however, use the equity in an IRA asset to purchase another IRA asset. That being said, IRAs do not have credit and because the IRS expects you to keep an IRA as a strictly retirement entity, you cannot assign your creditworthiness to your IRA. In other words, you cannot guarantee a loan made to your IRA, so you will not be able to use traditional 80/20 financing. You can use non-recourse loans, essentially secured by the property you are taking the loan against, but these generally top out at 50-60% LTV as opposed to conventional which can be as high as 96.5% LTV. Again if you decide to go this route, you will need to keep any assets and/or funds used for, and gained from this investment in your IRA accounts. I know you said you were looking at turnkey property, but keep in mind, you can not personally contribute to an IRA asset. Meaning, you can not mow the lawn of your rental property. You can't change locks, you cant replace carpet, you can't paint, etc. with an IRA asset you can not perform services other then semi-property management services. You can hire contractors, PMs, or any other professionals you need to provide services, so long as you, your family members, and/or companies you and/or your family owns don't provide those services directly. (That is broad strokes, to see more about who you can and can't deal with research prohibited transactions and disqualified persons.) I would suggest going this route.
OR
Second, you can take an early distribution from your IRA, which will be taxed at your earned income rate, plus a 10% early distribution tax. Once you have that money you can do whatever you want with it. You will be subject to all of the normal taxes etc. but you can also write off all of the usual stuff. The downside being, conservatively speaking, you will have approximately 30% less capital to invest (conservatively being 20% effective bracket +10% penalty.) I would not recommend this option.
Third option that I just thought of but has a higher threshold for execution. If you have any self employment income, you can start a company (can be sole proprietorship, LLC, C Corp, etc.) and as long as you don't have any employees other than a spouse, you can set up an individual 401k. Unless you have a substantial amount of self employed income you wont be able to contribute much, but you would be able to roll over your current accounts into this solo 401k. The plus side is, just like a traditional 401k at a large employer, you can take a loan for up to 50% or $50,000 (whichever is less) of your balance as a 5 year loan at prime +1%. This option is freaking awesome because you can use this loan for anything, vacation, paying debt, a girlfriends shoe shopping habit, or even RE. You can borrow your down payment at a low interest rate, from your retirement account, and pay your 401k interest instead of a lender. Any property acquired with these funds would likewise be considered outside of the 401k and any rent would be yours to use as you see fit. You can also use conventional 80% financing as well. Like I said, a little more difficult to execute, but very beneficial to keep the money tax sheltered, but still have access without the IRA restrictions.
Also when you say time frame for returning funds to the IRA, I think you may have heard about what some people call a 60 day rollover. This is NOT something I would advise doing, and the IRS frowns on it at best. Essentially an indirect rollover consists of one institution sending you a check, usually for the total amount of your retirement account (IRA, 401K etc) in order for you to "rollover" those funds to another institution, by either endorsing and sending the check along to your new firm, or depositing the funds and making an equal contribution to another reitrement account. The IRS gives you a 60 day window to complete this "rollover". Some people, who are generally misinformed, think that this is a 60 day loan they can take from their IRA. This is NOT the case, and you should not use those funds for anything other than a rollover.
Hopefully that wasn't too much info
Adam
