IT Manager · Albuquerque, NM · Member since 2015 · 12 posts · 1 vote
I've looked high and low and don't see anyone doing this but possibly due to the fact it's an disqualified transaction.
I'm looking to purchase multiple properties with little down as possible using SDIRA funds. If I can obtain the right language in the document to make sure it's a non-recourse (qualified) loan from the owner....is it possible?
Owner financing is absolutely possible with your IRA. The note does need to be non-recourse, which is less about adding appropriate language and just being sure there is no personal guarantee from you. The property is the only security for the loan. This is pretty standard with owner-financing.
The use of debt-financing will create exposure to UDFI taxation. You will want to study up on that and locate a CPA to work with for the IRA tax filing of form 990-T.
Professional · Portsmouth, NH · Member since 2014 · 175 posts · 108 votes
10y
A non-recourse loan from a bank is fine and seller carry-back (in the form of a non-recourse loan) is also fine.
Be aware that you cannot purchase RE in your IRA using a land-sale contract. In a land-sale contract the seller retains legal ownership of the property until the last payment is made. An IRA must take immediate legal ownership of any asset it purchases. This is not possible with a land-sale contract and is therefore a prohibited means of acquiring property.