Real Estate Agent · Birmingham, AL · Member since 2016 · 38 posts · 34 votes
Has anybody done this? Within the next 9 months I need to cash out (need to tap the Coverdell--kid going to college) a rental house my IRA/kids' Coverdells own outright in the Avondale neighborhood of Birmingham near downtown. Am thinking of offering it for sale to the current tenants, but also wonder about working out a trade with an investor who holds property max ARV $200k in Trussville, Hoover, Vestavia, Mountain Brook, Oak Mountain School district--either fix and flip or current rental. My house is a 3/1 and can keep chugging along the way it is or, like many other houses on the block/neighborhood, can fetch a commanding bit more with bigger upgrades. It does need some foundation and exterior work (not quite FHA ready) that I planned on tackling before the end of 2019. But with a trade, maybe not? What should I be thinking vis a vis trading? Or is it better just to button it up and sell retail in a hot neighborhood like Avondale and go shopping for a different property with the proceeds and maybe a non recourse loan?
Thanks @Jaysen Medhurst. Well its a tad different because its IRA/Coverdell owned so there aren't any tax consequences in the traditional sense. Also, rules against personal gain on these accounts would likely prohibit cashing out via refi. Anyone in the IRA space can confirm this? But I do see how this line of thought might make it a less than ideal way to deal with property from another investor's viewpoint.