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self directed ira account?

Hi, I read your answer for Ira self directed Accounts?
Now, my question is if an open A self directed account to buy real estate, What about the lending process? Who obtain the loan, the person or the Ira account? Any special loan program??
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This entry was posted on Sunday, July 4th, 2010 at 6:31 pm and is filed under Self-Directed IRA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “self directed ira account?”

  1. Rrf00 Says:
    July 4th, 2010 at 6:31 pm

    First you need a sizable amount in your IRA account for this to work.
    Secondly, you must find a custodian that allows you to purchase
    real estate inside your IRA.

    Third you form an LLC that will be funded from your current IRA and this company will buy the real estate. This company will act like any other one in buying and selling real estate. There are a few restrictions on what real estate you can own (it can’t be your own house).

    Forget what Mike above said about it’s not legal and you can’t do it. Banks are not the type of custodians that you will be working with.

    Contact me if you need further info.

  2. Michael K Says:
    July 4th, 2010 at 6:31 pm

    An IRA must be held by an authorized custodian, even if you direct the investments, and I doubt that you will be able to convince the custodian to hold mortgaged real estate in a IRA account. Further, even if you pay cash for the real estate with no mortgage, your contribution to the IRA is limited to $4,500 per year.

  3. Mike Says:
    July 4th, 2010 at 6:31 pm

    There are no circumstances upon which you can legally invest in individual pieces of real estate within the IRA. Whoever is telling you that is completely out of touch with banking regulation.
    You would take a loan against the IRA to invest in property.
    You can self direct your IRA monies to funds that invest in real estate, yet you have no ability to manage this; many firms that manage IRA money have real estate driven pools. I have to assume that’s what you are talking about.
    Anyone telling you that you can self direct the actual purchase of real estate within an IRA is completely goofy or is simply trying to swindle someone.
    It’s not legal.
    Good Luck.

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    July 4th, 2010 at 6:31 pm

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