Author Topic: Self directed IRA for real estate (Read 284 times)

Chairboy · « **on:** July 24, 2007, 09:47:24 AM »

Hi guys,

I'm getting ready to roll my 401k from my previous stint at my company into a self-directed IRA w/ Pensco Trust, and was wondering if any of you had any experience with this.

The plan:

1. Open an account w/ Pensco
2. Have my 401k provider transfer funds to the Self Directed IRA
3. Direct the SD-IRA to purchase a house
4. Rent that house out

There are a series of rules that need to be followed (eg, no renting it to yourself or your immediate family, you can't just do all the maintenance yourself, etc) but it seems like a good way to diversify my retirement assets into something semi-stable: Real Estate.

Before I pull the trigger, I figured it'd be worth posting here, considering the diverse backgrounds.

Chairboy · « **Reply #1 on:** July 24, 2007, 08:43:09 PM »

Getting ready to fill out the application, looks like the maintenance fees are about $500 a year total for a $130,000 property. Doesn't seem terrible, but it's certainly not free.

Gunslinger · « **Reply #2 on:** July 24, 2007, 09:12:53 PM »

what does it mean when you can't do the mait. yourself? I can understand the rules about who you rent to by why that?

In addition what tax incentives do you recieve? Somone once told me that with rental property you can deduct $15K a year in mait. and upgrades on that property.

AKIron · « **Reply #3 on:** July 24, 2007, 09:50:51 PM »

Hmmm, interesting. Wonder if there might be some loopholes in the renting it to yourself clause. What if you turned over management to a property management firm. Could they lease it to you?

Chairboy · « **Reply #4 on:** July 24, 2007, 09:52:06 PM »

That's maintenance on the fund, btw, the cost of having them do the Self Directed IRA, not property maintenance. Sorry bout that.

No, I couldn't live in the property, even via a third party. The IRS is strict about the usual loopholes.

AKIron · « **Reply #5 on:** July 24, 2007, 10:01:40 PM »

Quote

Originally posted by Chairboy
That's maintenance on the fund, btw, the cost of having them do the Self Directed IRA, not property maintenance. Sorry bout that.

No, I couldn't live in the property, even via a third party. The IRS is strict about the usual loopholes.

What if you leased it to three families from Mexico. Could they sublease you the garage?