We recommend you keep between 10-15% of the home value in cash to cover unexpected expenses. Otherwise, you can roll over more dollars from a separate IRA or 401(k) or sell an asset in your Self-Directed retirement account.
It is recommended you keep between 10-15% of the home value in cash to cover unexpected expenses.
If you run out of cash you might have to...
- Rollover more dollars from another IRA or 401(k)
- Sell an asset in your Self-Directed retirement account
You CANNOT start commingling personal assets into your Self-Directed Retirement account to pay for repairs.
There is a possible exception if you are going are about to lose an asset, but that is the last resort. You should not rely on this provision as this will be heavily scrutinized under audit.
Can I partner my retirement account with my personal funds to make up the difference?
You can partner or co-invest with anyone that isn’t a disqualified person. You may not “partner” with personal funds, as this will be considered a prohibited transaction.
Can I take out a loan to purchase a property?
Yes, but it must be a non-recourse loan. You can read our article on non-recourse loans here.
Want to read more?
- Reducing default risk with nonrecourse loans
- Diversifying your retirement portfolio to ensure you always have enough cash in your retirement account
- How you can borrow from your Rocket Dollar Self-Directed Solo 401(k)
- Other approaches to investing in real estate to suit what your retirement account can afford