IRA money for property?

Question

I'm in Texas, is it possible to use an inherited IRA (Bene SEP IRA) for purchase of investment property?

Aaron Fanning · Answer

Thank you for the replies.

Dennis Tierney · Answer

@Aaron Fanning  I assume since you said it was a Bene SEP IRA it is a beneficiary one. You have to remember you have to take a yearly RMD based on your age so that said you'll have to be sure the real estate kicks in enough income to pay the RMD. Plus you'll have to obey all the rules regarding nonrecourse loans etc.. if you intend to leverage a buy. You may have less headache if you just buy a REIT and get the income that way.

George Blower · Answer

@Aaron Fanning

I short, yes.

However, if you did not inherit the IRA from your spouse, it will need to be treated as a 'beneficiary IRA" instead of your own IRA. A self-directed IRA custodian that offers self-directed Beneficiary IRAs for investing in real estate is IRA Services Trust Company.

See the following for more on the beneficiary IRA rules.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary

Tyler Kastelberg · Answer

@Aaron Fanning Yes - It is possible to invest in real estate through a self-directed IRA. The catch is that it can't be your own project. I.E. You'll have to invest in someone else's project. There are numerous asset managers that would be happy to sell you a portion of ownership in their investment projects.

See link to more info: https://www.thebalance.com/how-to-invest-in-real-e...

Let me know if I can help point you in the right direction.