Questions on sub2 deal using Roth IRA - Posted by Greg
Posted by Greg on September 03, 2003 at 15:34:09:
I have a deal working that I believe can probably work as a sub2, with me making up a couple back payments ($2K) and giving the seller some cash to move ($2K).
My questions are:
- If I’m going to take possession of the property under my Roth IRA, does the backpayment money and/or the cash to the seller to move have to come out of my IRA? I’ve got a little less than $6K in my Midoh Roth IRA. As mentioned above, back payments and move money will be ~ $4K, and there is another payment due on Sept. 15th. Since there are a few months left in the year, I’d like to think I could swing another deal out of my Roth by year-end, if possible. I have other Roth IRA money I could move over from stock and mutual fund investments, if necessary.
And, I guess the bigger question is:
2. What’s the best way to structure the deal? This isn’t a “fat” deal where there is a ton of equity. But, the comps in the area will support about a $25-30K back end profit using a lease option exit strategy. I’m figuring cash flow at about $200/month. Will look to get $4-6K for option money, while of course hoping for more.
Thanks in advance for any help,