How to use IRA funds to purchase real estate

2 Replies

How do we use IRA funds to purchase/invest in real estate? Can I just have the IRA fund just a portion of the down payment (eg. 10%) and then I put in 10% cash?

How do we structure this? If your a realtor in Houston that knows how to work with IRA funds for purchase, please contact me.

@Carolyn W.

you can use your IRA to purchase investment real estate, but your IRA would have to fund it and qualify for a loan. Conventional financing is not allowed when purchasing inside of a retirement account since it required personal guarantee which is prohibited, therefore non-recourse loan must be utilized.

If you are buying property personally - you can't use any of the IRA funds for a down payment.

This topic has been discussed here on the forum many times so do some search and you'll learn a lot.

As @Dmitriy Fomichenko says this topic is discussed in many threads on BP. It is possible to buy real estate through self directed IRA's but there are many rules that must be followed. Also, real estate is a tax advantaged investment. You give up many of those advantages when you purchase through a SD IRA which is also tax advantaged. If this is the only way for you to get started it may be a good choice for you but, frankly, this is not a good choice for many. There are great advantages to using a SD IRA but there are more appropriate investments that make it easier to comply with the IRS regulations and better utilize the tax advantages.