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Updated about 10 years ago on . Most recent reply presented by

Jeff Hink's profile image
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Jeff Hink
  • Investor
  • from Memphis, Tennessee
  • Member since Mar 7, 2015
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Jeff Hink's profile image
Jeff Hink's profile image
Jeff Hink
  • Investor
  • from Memphis, Tennessee
  • Member since Mar 7, 2015
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Jeff Hink
  • Investor
  • Memphis, TN
13
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54
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Tax, SDIRAs & Cost Segregation

Self Directed IRA for owner Financing?

Jeff Hink
  • Investor
  • Memphis, TN
Posted

Has anybody used or are you able to use a self directed IRA to back a client that wants you to owner finance a house for them? What are the draw backs and/or how does this work?

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Gene Mitchell's profile image
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Gene Mitchell
  • from Flower Mound, Texas
  • Member since Mar 20, 2015
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Gene Mitchell's profile image
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Gene Mitchell
  • from Flower Mound, Texas
  • Member since Mar 20, 2015
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Gene Mitchell
  • Flower Mound, TX
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Gene Mitchell
  • Flower Mound, TX
Replied

you can make it work, but the LLC in your IRA has to be the one to purchase the house first. It cannot purchase a house from you. Be very careful that you don't do a prohibited transaction. Also, if your LLC owns a house for less than one year it will be considered a flip and you will have non passive income which will be taxed.

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