REO Financing Deal involving IRA

[Chris Miracle]

Hi everyone, I'm new here and am looking for some advice to keep myself out of trouble. Maybe some of you have been through the same scenario...

I've been dealing on a foreclosure for 8 weeks now. I'll spare you the details but it's come down to the fact that bank doesn't want to deal with financing and wants a cash deal. I can get a loan all day long, but they don't want it. I've thrown them $400K cash. The last buyer paid $700K before he totally neglected it for 7 years.

I'd plan to fund the transaction and then open up a cash-out refi on the back end to have access to some percentage (probably 70 or 80%) of the $400K.

One of the ways I could do it would be by taking money out of my traditional IRA for 60 days. It's a rollover loophole where basically you get a check and get 60 days to roll it into another IRA. What you do with it during that 60-day period is completely up to you. I know that part is legit. I know it can be done and that is not in question.

Once I try to get a loan against the property after the closing, the bank is going to want to 'source' the funds to see where I came up with the $ to buy it. They're not stupid and will look at that transaction.

So here's the question: Will they care? and will it be a showstopper in terms or getting a Cash-Out Refi or even a HELOC?

Anybody tried this? Thanks for any input!