Options Using Self Directed RE IRA? Anyone

Folks,

Would like to know if anyone out there plays with

RE options using their funds from an IRA( the special

trustees that lets you handle RE transactions).



Apart from an LLC/Corp, what other sources are

available to avoid Cap gains ??



we are basically selling the option to

another party, so 1031 is out.



tnx

krish

[ Edited by krish on Date 10/10/2005 ]

Comments(4)

  • mcole13th October, 2005

    Greetings hueyrescue,

    What are your plans after you acquire the property? Are you going to hold it for a while? Rent it out? Flip it? Put a T/B in it? I ask, because it can have an impact on which way you go.

    If you take it sub-to and immediately REEFI, the number of lenders you can go to is limited. While there are lenders that don’t require seasoning, it still might not work. For example, if a lender has an 80% LTV limit on a no-seasoning REFI, you could be short if it doesn’t appraise for what you think will.

    If you plan to hold onto the property, and if you can qualify, why not just buy it outright with a new loan? You would have a lot more options available to you. And oftentimes there are ways to do it at 90%-100% financing. It just depends on what your longer-term plans are.

    Just my initial thoughts.

  • IBuyHousesInc13th October, 2005

    Refinancing doesn’t make sense.. At best you will be out 5-6k for costs and only decrease the payment by 143. a month if you’re lucky.

    You do have a great scenario to buy subject to and resell the property using a wrap. Which allows you to offer 100% financing. Require the buyer to put down 5k-8k and sell the unit for 10k more than you believe its worth. Make sure the interest rate is greater than the rate you are paying on the TD. If you do you should make 175. a month

  • hueyrescue13th October, 2005

    That seems to be a workable approach. Two questions along that line:
    1. It seems a wrap would be a 3-5yr deal. What happens during that time to the original seller, my friend, when he tries to purchase another property and has a large mortgage but no asset to claim against it? (my original idea included refi at some point so that I would be holding the debt)

    2. Would the wrap be structured as a contract for deed? What factors would I consider when determining the balloon point (or reqired refi timeframe)?

    Thanks!
    Adam


    Quote:
    On 2005-10-13 11:36, IBuyHousesInc wrote:
    Refinancing doesn’t make sense.. At best you will be out 5-6k for costs and only decrease the payment by 143. a month if you’re lucky.

    You do have a great scenario to buy subject to and resell the property using a wrap. Which allows you to offer 100% financing. Require the buyer to put down 5k-8k and sell the unit for 10k more than you believe its worth. Make sure the interest rate is greater than the rate you are paying on the TD. If you do you should make 175. a month

  • IBuyHousesInc13th October, 2005

    Why would you ever want them to pay off the wrap... Worse thing that could happen is you foreclosing and taking back the asset... best thing to happen is 15 years of mortgage payments to you...

    as for the friend because you have a wrap he should be assured that youre making his payment.

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