Q: What if I don’t have sufficient funds in my self-directed IRA to purchase the property?

A: Generally, you have two options if you can’t purchase a property outright with your self-directed IRA:

• First, you can use debt-financing in the form of a non-recourse loan, which means if your IRA fails to make payments, the lending institution can only come after the property, not the IRA. Please note: With debt financing your IRA may incur unrelated business income tax (UBIT).

• The second possibility is purchasing an undivided (or proportionate) interest in the property.

(Source; ETC Res Re QS Guide)

Related posts:

1. Q: Can my self-directed IRA purchase real estate?
2. Q: I plan on purchasing a property with my self-directed IRA that will generate rental income. What happens with the rental income and what happens when I sell the property?
3. What is a Self Directed IRA? (SD-IRA)