Turnkey rentals with IRA

5 Replies

I have around 50,000 in retirement that I want to put into a self-directed IRA. Afterwards, I am considering putting 20% down on one or two turnkey rentals. Is this an option? If the rental goes uninhabited, can I make the monthly payments with the IRA? Thanks!

@Joshua Savage

An IRA may purchase property using a mortgage. Keep in mind, it is the IRA that owns the property, not you. The IRA would have to cover any expenses such as mortgages, property taxes, etc.

An IRA must obtain a non-recourse loan, meaning no personal guarantee from you. The commercial lenders that offer such loans typically want to see 30-40% down, 10-15% in reserves and they want to lend about $50K minimum for it to be worth their while.

Some turnkey rental operators will have a pool of private lenders willing to work with different terms.

Thanks guys for the quick response and the info!

Originally posted by @Joshua Savage :

I have around 50,000 in retirement that I want to put into a self-directed IRA. Afterwards, I am considering putting 20% down on one or two turnkey rentals. Is this an option? If the rental goes uninhabited, can I make the monthly payments with the IRA? Thanks!

If you can get a lender who does non recourse loans then yes your IRA can get a mortgage. Typically the terms are not as friendly as regular residential loans though. Another thing to note about using an IRA to buy real estate. You are never allowed to be involved in the management of the property. You must be arms length from the investment at all times.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

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