Self Directed IRA - Posted by Rob

Posted by glen ny on June 20, 2000 at 09:42:54:

Rob,

Check out what Mid-Ohio says on there web site re: loans to IRAs for Real Estate purchases. You are probably right that only seller financing is possible since you or your IRA cannot be personally responsible for the note. The banks may not be interested in non-recourse financing.
Go to the Mid-Ohio web site http://www.midoh.com/realestatedebt.htm

Self Directed IRA - Posted by Rob

Posted by Rob on June 19, 2000 at 21:33:17:

I have an old 401K with about $25K in it that I was thinking about rolling into a self directed IRA. Since you have to have a non-recourse note to use leverage, what are some ideas for investing since $25K won’t buy much of a property?

I can’t think of any way around the self dealing issue.

Thanks
Rob

Re: Self Directed IRA - Posted by glen ny

Posted by glen ny on June 19, 2000 at 22:00:36:

Rob,

Two ideas:

  1. You can buy properties using the IRA money and get a mortgage to buy the property if you do it all at closing. Check out the companies that offer self-directed IRAs. These companies know how to make it work for you.

  2. Buy paper at a discount with your money to earn better returns. I just bought a small 1st mortgage at a 25.6% yield, 30% LTV.

Talk to the companies such as Mid-Ohio and Entrust. They know lots of creative ways to make good returns on your IRA money.

glen

Re: Self Directed IRA - Posted by soapymac

Posted by soapymac on June 19, 2000 at 21:55:01:

Rob,

Click on the Entrust or Mid-Ohio Securities ads above. They should be able to help you.

Cordially,

Roy MacLean
"soapymac"

Re: Self Directed IRA - Posted by Rob

Posted by Rob on June 19, 2000 at 22:05:21:

I thought that if there were leverage/mortgage, there could be no recourse against the fund? That would mean you would need seller financing with a non recourse loan. Sound right?

Correct - Posted by Bud Branstetter

Posted by Bud Branstetter on June 20, 2000 at 09:46:04:

You can not pledge the assets of the IRA for a loan and it is unlikely that the lender will agree to non recourse. Some trustees will not allow loans on the property while others will allow you to partner with yourself and split the profits prorata. You can do participatory loans with a non related partner to put those funds to work.