Use HELOC/ Roth IRA money or delay investing in real estate?

[Richie Schembechler]

Brand new to BP other than listening to many podcasts.

Self-employed and have been using most extra income to reinvest in my business to grow it. I'm curious on thoughts surrounding using HELOC/ IRA/ Roth money to purchase rental property if I find the right opportunity vs delaying for a while to save up extra cash.

We have about 80-90k in equity in our residence and another 60k in IRA's/Roth. I was originally just considering converting my IRA to Roth while it still makes sense with my income and current tax code before thinking about real estate.

We aren't in a hurry or desperate to make a move but I am curious of thoughts. Our current residence will end up being a rental upon our next move in the next 2-3 years which makes me think a HELOC will happen at some point if not now anyways.

My main concern would be using HELOC on personal residence to make first real estate investment, not as concerned with the Roth/IRA but still don't want to make a big mistake on the first one.

Any guidance or help would be appreciated. 

[Brett Synicky]

Quote from @Richie Schembechler:

Brand new to BP other than listening to many podcasts.

Self-employed and have been using most extra income to reinvest in my business to grow it. I'm curious on thoughts surrounding using HELOC/ IRA/ Roth money to purchase rental property if I find the right opportunity vs delaying for a while to save up extra cash.

We have about 80-90k in equity in our residence and another 60k in IRA's/Roth. I was originally just considering converting my IRA to Roth while it still makes sense with my income and current tax code before thinking about real estate.

We aren't in a hurry or desperate to make a move but I am curious of thoughts. Our current residence will end up being a rental upon our next move in the next 2-3 years which makes me think a HELOC will happen at some point if not now anyways.

My main concern would be using HELOC on personal residence to make first real estate investment, not as concerned with the Roth/IRA but still don't want to make a big mistake on the first one.

Any guidance or help would be appreciated. 

If you're self employed with no w2 employees working more than 500 hours annually other than you and your spouse, you can qualify for a Solo 401k which has benefits the SDIRA does not have.  You can learn more here:  Solo401(k)

Additionally it should be noted that the Roth IRA is the only QRA that cannot be rolled into a 401k. So if you wanted to invest in alternative assets using your existing Roth IRA you'd have to do so in a SDIRA. With the SDIRA you can have pre-tax or Roth but they're two separate IRA's. With The Solo 401(k) pre-tax and Roth are included in the same plan.

Also be sure to check out the difference between full custodial vs. checkbook control.   

Happy investing!