Is this a good way to purchase? Is it better to self-fund or obtain loans from hard money lenders? I'm currently unemployed and obtaining loans from banks has been difficult.
A self directed IRA is a way many investors purchase real estate, however the profits go back into your retirement account and may only be take out as a distribution. This is a great vehicle for retirement wealth building, where the investor has more control over what they are invested in compared to traditional investments such as stocks, bonds and mutual funds. There are some prohibited transactions to be aware of as well.
I'm familiar with the IRA stipulations. My concern is funding the IRA with 100% 401k funds. I don't want to lose 401k leverage, but I'm currently unemployed and loans/funding from banks is difficult (since I'm trying to do a 20% IRA down payment/80% financing/loan).
Just call a SDIRA specialist directly and see if it’s right for you. Your questions are overly broad which indicates you haven’t looked into it much
@Mark Seutter As you are unemployed I doubt you could get a nonrecourse loan for the SDIRA (the IRS stipulated type of loan). Better to get employed before trying to set up the SDIRA and buy property.
Thanks for the feedback. I have researched and have the IRA custodian lined up. Just trying to get feedback from other investors who have used the SDIRA for funding. I don't want to use 100% IRA funding for investments, unless necessary.