Seller Financing a Self-Directed IRA Real Estate Transaction

Real Estate Videos

Buying real estate with a Self-Directed IRA has multiple advantages, including the ability to diversify your portfolio and invest in what you know. Using a Self-Directed IRA to buy real estate can generate tax deferred or tax-free gains. In the case of a Roth, you’re allowed to use leverage to buy real estate. However, the loan must be a non-recourse loan, cannot personally guarantee it. Plus, the use of a non-recourse loan can trigger the UBTI tax and go as high as 37%. But remember, there is a special exemption for 401K plans.

Learn More: The Beginners Guide to Purchasing Real Estate with Retirement Accounts

What is Seller Financing?

Seller financing is a real estate agreement in which the seller handles the mortgage process. Instead of a financial institution, it allows for Self-Directed IRA investors to use their IRA accounts to purchase real estate and sell it. However, buyers cannot be a disqualified person. So, if you’re in a real estate transaction and the buyer does not have enough financing, you as the Self-Directed IRA seller can finance the transaction for the buyer. But remember, the buyer cannot be a disqualified person. What’s the advantage? The interest received from the buyer will go back to the IRA without tax and will be tax deferred. Contact us to learn more!

Contact Us

[contact-form-7 id=”22691″ title=”Build Wealth Tax-Free”]

Categories

Latest Content

Send Us A Message