Is this a Caveat Emptor or bad advice. There is an ad in ‘Daily Sun - Lifestyles’ Page D11
“A Smart Way to Buy Your Villages Property: Use your IRA”that I happen to see and read by accident. I was asked why didn’t we do that? Soooo, let’s go search the web because I know a lot about IRA rules but never focused on this one.
I read the comments from 3 clients. They all state that the bought their vacation home in the Villages. I must logically assume ‘vacation home’ means they have a permanent one somewhere else.
Using IRA Money to Buy Real Estate
Well, I certainly understand buying an asset and letting it appreciate inside the IRA because many of us buy and sell stock held in an IRA. Note that when RMD comes around, you or your custodian needs to sell some portion to send the RMD info to IRS.
Basic Rules: Get this...
Can’t mortgage the property
Can’t make repairs or work on the property yourself. Must hire independent contractors
Can’t receive any personal benefit from the property - Can’t live in it or use it in any way. The real estate owned must be for investment purposes only.
They 3 comment that they are enjoying their vacation home living in the villages.
Man, I hope I only have part of a story but I don’t think so. They can’t be living in their investment. It is not allowed. Pretty hard to spin this scenario any other way.
I am not disparaging the Consultant doing these seminars because I did not attend one but the fact, after research, you can’t do what the ad says.