Holding Debt-Financed or Leveraged Real Estate
Sterling Trust permits the holding of debt-financed real estate which is subject to a non-recourse promissory note issued by a corporate lender or by the seller of the property. Sterling will only process debt-financed real estate in IRAs.
In considering whether to invest in real estate through your Sterling Trust IRA utilizing Debt Financing, here are some important points to keep in mind:
- Be sure to obtain Sterling Trust's Real Estate Direction of Investment Form prior to executing a contract or setting a closing date. There are items you will need to provide to Sterling Trust prior to setting a closing date.
- Sterling Trust will hold debt-financed property in an IRA only with the use of a non-recourse promissory note issued by a lending institution or by the seller of the property.
- An IRA accountholder cannot personally guarantee the non-recourse promissory note. The lending institution or seller of the property can only look to the property securing the note as collateral.
- Debt-financed property may generate Unrelated Business Taxable Income ("UBTI"), and any tax due must be paid by the account. For more information regarding UBTI, please consult your tax advisor.
- As you may be aware, IRA investment real estate transactions typically are all cash deals; however, debt-financed transactions are also possible through the use of a non-recourse loan to the IRA.
Please contact us for more information at STCservices@SterlingTrustCompany.com or 800-955-3434.
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Lending Institutions Which May Offer Non-Recourse Loans:
American Money Loan Services
Tom Vanderlaan, President
1740 Dell Range Blvd., H135
Cheyenne, WY 82009 Main: 800.261.2212 Fax: 231-225-0424
Cell: 231-740-1289
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Lending Resources Group, Inc.
Mark L. Robbins, President
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Lighthouse Commercial Mortgage
Vernon L. Morrison
3220 Riverside Dr., Suite A-1
Columbus, OH 43221 Phone: 614.481.6075 Toll Free: 888.369.6729 Fax: 614.481.6080
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My IRA Lender
Jeff Fullerton, President
402 Main Street Rapid City, SD 57701 Phone: 800.908.8845 or 605.341.1203 Fax: 605.394.0084 www.myiralender.com |
North American Savings Bank
Matt Allen, Account Executive—IRA Lending
949 NE Columbus
Lee's Summit, MO 64086 Phone: 816.347.4222 Fax: 816.347.4210 |
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The list above represents institutions which may offer non-recourse financing. Each will have their own standards and requirements that you must meet. Sterling Trust does not receive any remuneration from any of the above listed institutions. This list is being provided as a service to you and should not be construed as an endorsement or recommendation and is intended for informational purposes only. This is not meant to provide financial, tax, legal or other professional advice or recommendation. You are encouraged to seek professional advice regarding these matters.