How to Buy Property with an IRA

Your Individual Retirement Account (IRA) or Roth IRA can buy investment property, without taking money out of the account.

The gains made by the IRA or Roth IRA when it sells, rents or options the property remain protected under the tax structure of the IRA.

Difficulty: Moderate

Instructions

Things You'll Need:

• A self-directed IRA as offered by www.jonathanwarren.org

1. Establish or transfer an IRA with an pension trustee which does not restrict the type of investment held by the IRA. www.jonathanwarren.org can provide this if your trustee does not offer such service.

2. Once sufficient funds are lodged in the IRA, execute investment orders to the trustee to purchase the property. The property will then be held directly by the IRA.
   
   If you need to borrow funds to buy the property, the loan will have to be NON-RECOURSE, which means that the lender agrees not to try to collect the loan from you if they can not realized from a sale of the property.

3. It is important that you do not use the property yourself, or co-mingle your own funds with the IRA funds. The property can not be used, rented or lived in by your linear family (parents, grand parents, children, grand children, etc.), but it can be used or rented by your brother or sister.

4. When you sell the property, the proceeds will remain in your IRA, under regular IRA distribution rules.

Tips & Warnings

• Make sure you know all the regulations before you make a move.
• Escrow officers, bankers, lawyers and accountants will likely be little help because this is such a specialized field.
• Withdrawals from IRA's lead to substantial tax consequences. This is not a means of withdrawing. This is a means of having the IRA invest as you wish, WITHOUT withdrawing its funds.

Resources

• jonathanwarren.org provides this service