All loans in an IRA and Solo 401(k) must be non-recourse, including real estate.
Rocket Dollar retirement accounts can use loans to help finance the purchase of real estate investments. All loans used must be Non-Recourse, and be made to the retirement plan or IRA, with no personal consideration or affiliation.
Non-Recourse Loans are solely collateralized by the property, with no outside assets considered in a default situation. This means that unlike usual loans, the lender cannot pursue any of your personal assets...in Non-Recourse Loans, the lender can only go after the real assets underlying the loan.
If you're interested in learning more, we have a number of partners who specialize in this space and can help explore your options, please call 1-855-762-5383, option 2, or email our sales and partnerships team at email@example.com.
- Because of this unique structure, lending rates and terms will differ from traditional mortgage loan market rates. Traditional lenders might not be familiar or offer the type of loan required.
- IRAs using loans to purchase real estate can trigger UDFI (Unrelated Debt-Financed Income), requiring UBIT (Unrelated Business Income Tax) to be paid by your retirement account. You can click here to learn more.
- Please consult your tax advisor to discuss the tax implications of using outside financing alongside your IRA.
- More notes on UBIT & UDFI can be found here.
Want to read more?
- See why nonrecourse loans make sense for investors
- Borrowing from your Rocket Dollar Self-Directed Solo 401(k)
- A general overview of investing in real estate