Using IRA Funds To Purchase Real Estate Overseas

“Kathleen, I hope everything is well with you and yours. I have a question that I can probably get answered next week at the Global Property Summit my wife and I will be attending. Just in case I get too wrapped up in the activities there, I have one question.

“I plan on investing in the mango plantations in Panama that Lief has been talking about. I want to use my IRA, which I am converting into a Self Directed LLC IRA. Will I be able to purchase this investment with a U.S. LLC?

“I know you’re busy, so if this requires a bunch of research I’ll just wait for the Summit. Either way, thank you for providing this service.”

–Bill P., United States

No research required. Yes, you can invest in the mango offering we’ve written about using a U.S. LLC. Generally, though, we recommend that you use an offshore entity for an offshore investment and a U.S. entity for a U.S. investment. We can discuss further at the conference this week, but, broadly speaking, the explanation has to do with asset protection.

“Kathleen, I read some of your articles regarding buying a property using IRA self-directed checkbooks. I’m curious if there is any way to do this in which the owner may live in the hotel (manager quarters) and run the business. Is there any legal way to achieve this? Maybe with a Solo 401K and establishing a C corp? If you can direct me to any information regarding this, I would appreciate it!”

–Jon P., United States

The relevant rules for a Solo 401k are the same as the rules for a self-directed IRA, so, unfortunately, no, there’s no relief there. You could not legally take a hands-on management role or live in a building purchased with tax-deferred funds.

For more information on using IRA funds to purchase real estate overseas, get in touch here.

Continue Reading: My Panama City 2015 Market Forecast

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