Self-directed IRA

[Pat McCandless]

When using a self directed IRA as a down payment on a rental property, I'm understanding that any cash flow can't be touched for personal use (if that's not the case please chime in). What happens then if you wanted to implement the snowball effect and at some point take out equity in the property, refinance, whatever it is in order to purchase your next property? Do the same rules apply to any property after that? You essentially can't touch the cash flow coming in until a certain age?

[Dmitriy Fomichenko]

Originally posted by @Eric M.:

...if I have a rental property does that automatically qualify me as part time self-employed, (and therefore eligible for a solo 401(K)) or are there time and/or income limits? I understand that I cannot contribute more than I earn, but what about rollovers? If I have a hundred grand in an old 401(K), can I roll all of that into my solo 401(K) that I will have as a landlord of an isolated single family property?

Eric, owning a rental property does not mean you are self-employed and qualify for a Solo 401k. Owning a rental property make you an investor, and the rental income is passive. As self-employed you would have earned income and would be paying self-employment taxes on it. 

If you were qualified to have a Solo 401k then you would be able to rollover old 401k into your new Solo 401k plan.