I don have enough money in my IRA to purchase a piece of property outright. Can my IRA REAL ESTATE LLC get a loan and use my IRA money as the down payment?
Yes you can use your IRA money as the down payment and then have your IRA REAL ESTATE LLC get a loan for the balance. However, you will not be able to personally guarantee the loan. It must be a non-recourse type of loan, which means that if your IRA fails to make payments, the only recourse the lender has is against the property itself. Further, there will be tax ramifications to doing so; UDFI (unrelated debt financed income) tax applies when a loan is obtained so you would want to confer with your tax professional about what forms would be necessary.
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