Lease Option Within Self Directed IRA?

Has anyone done this?

Numbers are

280 fmv
265 option price - 5 year
my rent 1500
tenants pay 1800

I want to do this within my kids college ira with the cashflow paying her college prepay fund.

Anyone done something like this before?

This does not sound like the type of transaction suitable for your IRA…I would read trust document and regulations to be certain that is permitted. In any event, if it were me and a permitted transaction with IRA rules, I would only invest the option portion in the IRA, not the lease portion.

In order to do that, you would want a separate agreement for the lease and the option.

Personally, I funded my kids education investing in debt instruments; mostly mobile home finance paper. You can easily earn 50% and more secured by the title. Yes, there is management involved but each investment is in small quantities and it is very calculated.

Hope that helps.



You can not option a property into an LLC as any debt an LLC becomes responsible for must be non-recourse and an option does not have the ability of being liability free!