I currently have 6 doors in a retirement trust. Its basically set up like a 401k. I can put a certain amount of income into and buy real estate from it. I cant touch the money and all rent has to go back into the account. Its a tax deferred account. All my homes are currently paid off and I would like to see if there is a lender out there that can help me refinance the homes in bulk or one at a time and pull the money out and buy more homes. Are there any lenders out there that can do this or have experience in it. I'm thinking I can pull out at least 100k to buy more passive income properties.
If the funds are under the umbrella of a retirement plan, the loan will need to be non-recourse. In some cases a portfolio loan is possible. Try North American Savings Bank and First Western Federal Savings as leaders in the field.
If the trust is under an IRA, then you will want to be sure to educate yourself on the concept of UDFI taxation on debt-financed real estate income. It will not be a deal-killer, but knowing what the impact will be in advance is crucial. Under a qualified employer plan like a 401(k), UDFI does not apply to leveraged real estate income.
Thanks for the response. Do you have any preferred lenders that I can call from those banks.
Thanks for helping. If its a taxed deferred account the refi cash money would just go back into the trust to buy more homes. Would they tax me on that.
there is only handful of lenders specializing in non-recourse financing for retirement accounts. Over the years I compiled them in this list:
They are all good quality lenders but their programs and terms vary, some may work for you while others won't. Review the info and contact those that fit your criteria.
Hope this helps.
If the non-recourse loan is to your 401k then no UDFI will not apply.
are you able to do these....how long have you been lending