Self Directed IRA vs HELOC

[Steve Tse]

Hi BP folks, 

I am investing in a multifamily syndication and looking for opinions on whether to make a contribution out of my SDIRA or use a HELOC ? Would be interested to hear pros and cons.

Thanks

[Estevan Benavides]

Quote from @Steve Tse:

You are right, the interest is at 8.5%, but with SDIRA all cash flow goes right back in to IRA. So what makes more sense ?

Steve, the question should be more along the lines of whether you want to build a retirement fund vs try to bring in passive income now. Yes, the SDIRA funds will flow back to that account, but that is the point of that investment vehicle. If the goal is money now, you need to make sure whatever you invest in is outpacing the interest on the HELOC otherwise you’re only spinning your wheels.