THE MILLIONAIRES INVESTMENT GROUP MICHAEL POGGI
There are eight things you need to know when considering investing in real
estate with a self directed IRA. They are listed below:
1. Your IRA cannot purchase property that is already owned by you or a disqualified
person. A disqualified person is your spouse, parents, grandparents or great
grandparents, children and their spouses, grand children and great grand children
and their spouses. There are a few others, which you can find in IRS Code Section
4975.
2. You (or any disqualified person from the list above) cannot receive indirect benefits from property owned by
your IRA, such as taking a vacation in resort property or renting office space in commercial property that
your selfdirected IRA owns.
3. Your IRA needs to be titled in the name of the IRA, NOT in your personal name.
4. The real estate in an IRA doesn’t have to be 100% funded from your IRA. You can partner with a friend or
family member. For example, let’s say you found some property for your selfdirected IRA real estate
account, and you need $100,000 in order to purchase it. However, your IRA account only has $25,000. In
this case, your friend could provide the other $75,000. Your friend would own 75% of the property and your
IRA would own 25%.
5. If your selfdirected IRA uses financing to purchase real estate, the loan must be a nonrecourse loan, and
your IRA must pay unrelated business income tax or UBIT.
6.
All
expenses,
such
as
maintenance, improvements, property
taxes, and any other expenditure to
own and/or maintain the property
must be paid from the selfdirected
IRA. No personal funds may be used
for any expenses.
7. All income from the IRA must also
go back into the IRA account. You
may not deposit any money, such as
rental income into your personal
account.