Self directed IRA and hard money
Since I don't have enough cash in hands I decided to use money from my 403(b) retirement fund. I created a self-directed IRA with a custodian company. I don't have too much into my 403(b) either, only $60,000, not enough to buy a property, rehab it and sell it back unless I go to very cheap areas where nobody wants to move. I talked to my CPA about my situation and he said that I need money from hard money lenders or from banks that can give me a commercial loan. I asked him what is the first step at the moment and he said "create an LLc for your business". And I did it! At the moment I am aproved by a hard lending company and my check from Fidelity just arrived at the custodian IRA company. I thought that by next week I'll be able to start. I was wrong!
Talking back to the custodian IRA company yesterday they informed me that I can't use an LLC!!! The custodian IRA is the owner of every property I'm buying and if I need more money I need to find a bank that can give me a nonrecourse loan, meaning their only collateral is the property itself. I thought that this is exactly what the hard money companies are doing. However, on a second thought, the hard money asked me a lot of questions about the all my private assets. Why would they need such information if they can't go after my assets if things go south? Or can they?