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Dock David Treece 2 months, 1 week ago.
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Hi Samuel,
Thank you for your question. We actually have a whole article about using 401(k)s or Self-Directed IRAs for Real Estate, which may be helpful for you.
To answer your question, when an IRA or 401(k) is used to invest in real estate, the account is still subject to normal IRA or 401(k) rules. For example, required minimum distributions still apply after you reach 70 1/2. Also, the rules that apply to inherited IRAs will still apply to your self-directed IRA or 401(k). This means that, unless you have other accounts that you can use to meet your RMDs, you may end up having to sell property in order to meet your required distributions. If you’re unaware of how these rules work, you can read more about them in our guide to Traditional IRAs.
On the issue of property financing, there are a number of Self-Directed IRA Custodians & facilitators that can help you to finance properties held in a self-directed IRA or 401(k). There are several rules that you should be careful to follow when financing property held in a qualified account – including that you can’t personally guarantee loans within your IRA. However, a self-directed IRA company can help you to navigate these rules and some can help to arrange financing.
Hope this helps.
Dock
