Using self directed IRA

[Jason Smith]

Hello everyone, hope this is the right ace to ask. I recently changed jobs and have a nice pool of cash in my old 401k that I am going to transfer to a self directed IRA. My new job's 401k I will likely keep traditional, and this other one I would like to buy properties with. My main questions, if I use my self directed IRA to buy properties, can you take a mortgage on anything you buy initially, or does one need to be bought with cash, then leverage of that for future purposes? Any other advice on using the IRA for purchases would be great! I don't plan on touching this money for withdrawal purposes for a very long time, save maybe college tuition for the little ones, if I'm allowed too.

[Dmitriy Fomichenko]

Originally posted by @Mark Bookhagen:

"You can't get a traditional mortgage loan in an IRA, so you really need to have enough money in your IRA to purchase properties for cash if you plan on having the property as a long-term rental."

http://www.forbes.com/sites/zillow/2013/06/07/how-to-use-your-ira-to-buy-investment-properties/

Mark, thank you for providing the link to the article. Ironically I know the author very well. I was surprised to read his comments, we've actually presented at the same events few times and he should know this. It is partially correct, while you can not get conventional mortgage in an IRA, you don't need to buy properties for all cash and can utilize non-recourse financing. But the article was kind of short and it is difficult to cover all of the details in such a limited space.