presented by
SD IRA Investing In Buy n Holds
Seeking input regarding use of SD IRA funds for REI. Have been using my SD IRA funds for funding flips over the past year, completing 3 with success. I have no issue with this method, easy enough on my end, so no complaints.
I have been looking into more BnH as to diversify, as well as looking to future. Understand that I can create an SD IRA LLC and go that route. But, seems to have drawbacks; fewer lenders, higher rates, non recourse loans, more down, etc.
So the question is, does anyone out there have advice, recommendations for how to invest in BnH (more specifically MF) using SD IRA funds? (other than that mentioned above, higher rate, etc) More specifically, investing with a partner that is the business side of partnership?
Most Popular Reply
Don't forget that another drawback of using an SDIRA for buy & hold is you pay more taxes. If you use leverage, you will likely pay UBIT tax. Also, at age 59.5 when you start to pull that money out, you will pay all your gains as ordinary income.
When investing in real estate, it is possible to defer your taxable gains indefinitely, and when you die your heirs inherit the property at a stepped-up basis so nobody ever pays the tax. Even if you want to liquidate early and pay the tax on the gains, you are paying at least a portion as capital gains, not ordinary income.