How do I purchase real estate with my IRA?

Once you have identified a real estate property you would like to purchase with your Vantage Self-Directed IRA, you will need to submit a completed and executed Buy Direction Letter to Vantage.  A Vantage IRA Specialist will then provide you with a list of additional documents that will need to be received in good order to process the purchase transaction.  Most, if not all, of the supporting documentation will be provided by the title company selected to close escrow on the purchase. However, we will request an Acknowledgement of Read and Approved from you before singing the title documents on behalf of your IRA.Vantage clients should title the purchase contract and all other supporting escrow instructions as follows: Vantage FBO (Client’s Name) IRA.

What are the fees associated with purchasing real estate with my IRA?

There is a $125 transaction fee to purchase real estate within your IRA regardless of the value of the asset purchase.  A detailed overview of all account fees can be found in the Fee Schedule.

I’ve been told that buying and selling real estate in my self-directed retirement plan was not permissible. Why?

Neither the IRS nor the Department of Labor has ever published a list of legal investments. However, there is a list of Prohibited Transactions and Disqualified Persons that deal with what is not permitted. Real estate and numerous other alternative asset investments are permitted provided you follow the rules.

Can my IRA purchase real estate I personally own?

No, this type of transaction would be considered self-dealing and is strictly prohibited.  The Internal Revenue Code Section 4975 provides a list of “disqualified parties” and “related parties” to your Self-Directed IRA, and account holders are considered related to their own Self-Directed IRA.

What are my options if there isn’t enough cash in my IRA to make my real estate investment?

There are three options:

1. Add additional funds to your IRA via transfer, rollover or contribution
2. Partner with others, either directly or through an entity (LLC, LP, etc.).
3. Obtain a non-recourse loan

What is a non-recourse loan?

A non-recourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable.

How do I obtain a non-recourse loan?

Private lenders and some financial institutions offer this type of product. Typically, traditional banks do not offer Self-Directed IRA loans. Contact us for our Resource List for a list of non-recourse lenders.

Can I move a real estate asset held within my Vantage IRA to a newly formed IRA LLC?

Yes, once the IRA LLC documents are in good order, you can direct Vantage to assign a real estate asset into the IRA LLC. The real estate asset must be re-registered with a Quit Claim Deed.

How should the ownership of my real estate purchase documents be titled?

Any real estate purchase being made within your Vantage Self-Directed IRA should be titled as follows:

Vantage FBO (client name) IRA.

My spouse and I are Vantage clients. Can we use one Buy Direction Letter to buy a property?

No, Vantage must receive direction from each IRA holder in proportion to the percentage of ownership.

If I choose not to use a title agency, what is the procedure?

Using a title company is not required, however highly encouraged. If one is not used, Vantage will request a Hold Harmless Agreement, the original Warranty Deed / Quit Claim Deed, the purchase contract, and a Payment Authorization Letter for any applicable fees.

How do I pay a real estate expense from my IRA?

Expenses can be paid, in proportion to the percentage of ownership, from your IRA by submitting a Payment Authorization Letter (PAL) and invoice to our office. You can send us the documentation electronically, by fax or mail.

What are the payment options for my tenants to make their rent payments?

Payments can be made via check, ACH or wire. The property address should be noted on the incoming check or notated when sent electronically. Please call our office for electronic ACH and wiring instructions.

Am I a required to submit a Payment Authorization Letter for every expense relating my property?

By completing a Payment Authorization Letter (PAL), you can instruct us to pay expenses such as property taxes, HOA fees, utilities and insurance as the invoices arrive.

If I run out of money in my IRA to pay expenses on my real estate investment, what happens? How do I pay the expenses?

You can add funds to your IRA via transfer, rollover, or contribution.

If the IRA only owns a percentage of the property and the remaining percentage is owned personally, can I use the property some of the time during the year?

No, this would be considered a prohibited transaction. If the IRA owns any percentage of the property, it cannot be used by any disqualified persons/related parties of the IRA.