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If I do a Deed in Lieu of Foreclosure on my upside down condo can I buy it back with my Self direct IRA money?
I know if I open a Self-Directed IRA and roll my existing IRA money into it, I can instruct my trustee to buy real estate that I don’t live in. I lived in it for 2 years, but it's been rented now for 6 months. So it's considered investment property. I want to pay off the mortgage completely with money in my self directed IRA
2 Answers
- Anonymous1 decade agoFavorite Answer
Wishful thinking. That would be classified by the IRS as a "prohibited transaction", if I understand you correctly. If you hold the deed (or any of your lineal descendants), then your IRA can't purchase it.
Plus, the bank wouldn't likely sell you a property that they just took a loss on because of you're failure to pay what was owed. Plus, if it's rented and producing any income, why would they give you a deed-in-lieu?
But, I understand the allure of using the self-directed IRA - SO many possibilities. If I had mine up and running earlier, I would have saved significant interest carry on earlier transactions....
- acermillLv 71 decade ago
Don't count on the lender allowing this to occur. They've seen this type of scam time and time again. As soon as your name appears on any offer to purchase, your offer will be summarily rejected. Furthermore, don't expect to be granted a DILF if you have sufficient monetary assets to continue paying the mortgage.
