Real estate in Traditional IRA.

Submitted by Richard Schieb jr on Wed, 2019-03-27 14:12

I have a potential client that wants to transfer his lump sum pension payout to a new Traditional IRA. He then wants to buy houses to repair and flip.

I know it can be done but is very tricky. Does anybody have any experience with this and any words of advice?

Thanks

Rick



Submitted by Alan - IRA critic on Wed, 2019-03-27 18:56

There are plenty of pitfalls in doing this, mostly avoiding prohibited transactions. Client should check with the self directed IRA custodian that specializes in real estate IRAs, because those people deal with the issues 24/7 and can provide help and assistance in managing the IRA and setting it up. Since all expenses connected to the real estate must be paid from IRA funds and not personal funds, keeping enough liquidity in the IRA to pay for repairs, insurance, property taxes, appraisals, etc is critical. All repair work must be hired out, client cannot do any of it himself.

Submitted by Richard Schieb jr on Thu, 2019-03-28 11:17

Any suggestions on a custodian?

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