Q&A: How Do You Handle Repairs in a Self-Directed IRA? – Episode 827

If you buy a rental property inside of a self-directed IRA, what payment method do you use to pay for repairs and other expenses? That’s our first question on this episode of Q&A Monday! Today I’m answering three listener questions on various real estate topics.

Our first question is about paying for expenses and repairs within a self-directed account. We’ll also talk about setting up an exit plan for expiring introductory interest rates, and financing options for getting started with your first rental. Don’t miss this encore episode of Investing in Real Estate!

On this episode you’ll learn:

• How to pay for repairs inside a self-directed account.
• What options are available when your introductory interest rates are expiring.
• Funding options for buying a fourplex.

How to Pay for Repairs Inside a Self-Directed Account

When you own a rental property inside of a self-directed IRA, all expenses related to that property must come out of the same account. This might sound like a pain, but it’s really not a big deal if you’re working with a great custodian! All you need to do is let them know, and they can facilitate the transaction. Do not pay for any repairs or expenses outside of the self-directed account.

What Options Are Available When Your Introductory Interest Rates Are Expiring

After you set up 0% interest financing with Fund&Grow, that introductory interest rate does not last forever. In most cases, you have 12-18 months to figure out Plan B. Typically you shouldn’t wait til the last minute, but if it happens, I’d recommend reaching back out to your contact at Fund&Grow. They may be able to help you roll the cards over to new ones. Also consider that many banks are lending right now. You should be able to find a lending institution to help you refinance.

Funding Options for Buying a Fourplex

Anything less than four units is classified as a residential property, so if you’ve got a good deal then banks are lending! Otherwise, look into tapping into your home equity, or working with a partner.

Ask Me a Question at morrisinvest.com/clayton

Episode Resources
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morrisinvest.com/funding
Flagstar Bank
The Power of Non-Recourse Financing for Building Wealth
Dan Kraus at Churchill Mortgage
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