An IRA Takes a Loan

Getting a lot of calls lately from people who want to take their IRA's and buy real estate. Thing is, they don't always have enough in their account to purchase a property outright. For some taking out a non-recourse loan is the answer. In this case it's not the individual applying for the loan, it's the IRA! It's like a commercial loan where cash-flow and the property itself are the main risk factors used to determine rate & terms. A year ago I had a list of 15 non-recourse lenders and did my annual review of that list this month to find only six remain. If you know of a non-recourse lender, please pass that information along to me so I can add them to my list.... When an IRA takes on leverage it can throw off UDFI (tax) so going the non-recourse route eats into ROI but if you've got a deal on a piece of cashflow real estate, using your IRA may be the way to go. When looking for capital for a deal most can no longer turn to their home equity or HELOC. Your IRA may be the place to turn to enable you to take advantage of the deals out there. Some ROI is better than none and going the non-recourse route could be the way to go. Happy Investing! - Kaaren (714) 460-5505