Are You Using a Self Directed IRA (Individual Retirement Account)?
Shirley and Neil were happy with the way their self directed Roth IRA (individual Retirement Account) was traveling, after their profitable experience in buying the deceased estate last year.
They decided to buy a doer upper and rehab it using their IRA.
They had a good bit of equity in the properties their IRAs owned and they figured they could borrow the rest of the money they needed.
Debt Financing for the benefit of the IRA is not prohibited as long as you can get a non recourse loan.
Community banks and mortgage brokers followed by hard money lenders, are more likely to lend to plans.
Shirley knew the local community bank manager, and she wanted to try and borrow the money from the bank, as the interest would be less than using a mortgage broker.
She just did not know whether the bank would lend money to a self directed Roth IRA.
Here is the information Shirley came up with about obtaining a loan for her IRA plan.
The loan to the plan must not allow recourse to Shirley or the IRA.
(the property alone must be collateral for the loan.
) Shirley could not guarantee the loan, but a third party who is not related to Shirley may.
Banks prefer at the least an 80% loan to value ratio.
Commercial properties are negotiated differently, These properties are often estimated on the basis of cash flow, occupancy rates, return on investment and other circumstances.
The personal ability to repay the loan becomes less of a factor when commercial property such as multi unit residential and apartment buildings are concerned.
The community bank was sophisticated enough to understand that this would be a portfolio loan.
The analysis of capability of the loan is similar to the analysis required for a commercial real estate loan.
Shirley was successful in obtaining the loan with her local bank, as they did make loans to a self directed Roth IRA.
She and Neil got quotes from several local builders to renovate the property.
In the end, the costs came in at just over the quoted amount.
Shirley and Neil decided to sell the property rather than rent it out.
, They finished up making less than they had anticipated, but they still made a profit so they were happy about that.
As usual if this seems too hard or you just can't be bothered, and you are looking for a simpler more TURNKEY solution Go to the url at the bottom of this article, from there go to my website and you will find more information on IRAs and real estate.
They decided to buy a doer upper and rehab it using their IRA.
They had a good bit of equity in the properties their IRAs owned and they figured they could borrow the rest of the money they needed.
Debt Financing for the benefit of the IRA is not prohibited as long as you can get a non recourse loan.
Community banks and mortgage brokers followed by hard money lenders, are more likely to lend to plans.
Shirley knew the local community bank manager, and she wanted to try and borrow the money from the bank, as the interest would be less than using a mortgage broker.
She just did not know whether the bank would lend money to a self directed Roth IRA.
Here is the information Shirley came up with about obtaining a loan for her IRA plan.
The loan to the plan must not allow recourse to Shirley or the IRA.
(the property alone must be collateral for the loan.
) Shirley could not guarantee the loan, but a third party who is not related to Shirley may.
Banks prefer at the least an 80% loan to value ratio.
Commercial properties are negotiated differently, These properties are often estimated on the basis of cash flow, occupancy rates, return on investment and other circumstances.
The personal ability to repay the loan becomes less of a factor when commercial property such as multi unit residential and apartment buildings are concerned.
The community bank was sophisticated enough to understand that this would be a portfolio loan.
The analysis of capability of the loan is similar to the analysis required for a commercial real estate loan.
Shirley was successful in obtaining the loan with her local bank, as they did make loans to a self directed Roth IRA.
She and Neil got quotes from several local builders to renovate the property.
In the end, the costs came in at just over the quoted amount.
Shirley and Neil decided to sell the property rather than rent it out.
, They finished up making less than they had anticipated, but they still made a profit so they were happy about that.
As usual if this seems too hard or you just can't be bothered, and you are looking for a simpler more TURNKEY solution Go to the url at the bottom of this article, from there go to my website and you will find more information on IRAs and real estate.
