IRA non-recourse loan in Utah - Posted by Charles Taylor

import · May 10, 2006, 10:37am

Posted by GMann on May 10, 2006 at 12:53:10:

Don’t know anything about them but here you go

import · May 10, 2006, 10:37am

Posted by Charles Taylor on May 10, 2006 at 10:37:37:

Heres the deal: I want to buy a single family residence for investment using money from my self-directed IRA and a “non-recourse” loan. (IRS rules).
I don’t know much more about the requirements other than that, so it would help to have a lender who understands the technicalities of it all.
The homes price is 265,000. and the LTV would be about 70%.

import · May 11, 2006, 4:11am

Re: IRA non-recourse loan in Utah - Posted by John Corey

Posted by John Corey on May 11, 2006 at 04:11:51:

There are very few lenders who will make such loans. If they do 70% LTV might be a bit high. The last time I looked the LTV was more like 60%.

Also understand that if you have income (from a rental) or profits from a sale some of the income or profits will be taxed even if the property is owned by the IRA. The issue is called UBIT (Unrelated Business Income Tax). Mostly driven by the fact that the loan payments are a deduction but the income would not be taxed otherwise.

So, using an IRA can be a smart way to go. Financing and taxes are not what most people assume so you need to do some homework.

John Corey