Self Directed IRA Non-Recourse Loan to Invest in Real Estate

HOW DO I GET A NON-RECOURSE LOAN?

When you have a small IRA or just don’t have enough funds to invest in real estate, your IRA can get a non-recourse loan. A non-recourse loan is a loan in the name of the IRA, secured by collateral (usually the property being purchased). The loan is based on the value of the real estate investment and typically the IRA holder's credit does not come into play for the IRA to qualify.

Most banks do not offer these types of loans. You must shop around for a non-recourse IRA lender, as every lender has different requirements, restrictions, and terms. Here is a more detailed article on what non-recourse lenders require.

There are many things to consider when obtaining a non-recourse loan such as IRA taxes. Here are some basic questions to ask when researching non-recourse lenders:

• What are the terms? Do they change?
• What is the LTV?
• How do you calculate the cash flow projection? What is your formula?
• How is rent determined?
• Do you require a credit check for me personally?
• What are your fees? How do you charge?

4 Easy Steps to Get Started With a Non-Recourse Loan: 

1. Open and fund a self-directed IRA. You will need to provide the lender a statement for your IRA. 
2. Find a non-recourse lender. Remember, this is a loan to your IRA— therefore, once you have approved the loan terms, IRA Resources signs all documents on behalf of your IRA.
3. Fund the investment. For us to fund the investment, we’ll need a copy of the loan documents, as well as the investment paperwork. You can find more information on the process for buying real estate with a non-recourse loan on our blog.
4. Set up payments to non-recourse lender from your IRA. The payments must come from the IRA. You cannot pay personally.

Some Non-Recourse Lenders Working with Self-Directed IRA Clients. DOWNLOAD LIST 

IRA Resources, Inc. (IRAR) does not promote any investments or providers. Rather, IRAR provides the administration, information, and tools to help make self-direction straightforward, cost effective, and compliant.