Real Estate Purchase as IRA -- Anyone Done It?
I've read that real estate/second homes, etc. can be purchased as IRA accounts. The buyer cannot occupy the residence (even over night), but can rent it and treat the property as an IRA. When it's sold the proceeds can be rolled into another IRA or taken in cash with the usual tax. I'd be interested in hearing from anyone that has experience with such transactions and with tips on how to proceed.
My husband and his brother co-own their recently-deceased mother's home. They're trying to sell the property, but the house (despite the improvements we've already made) isn't selling because: 1 - the neighborhood isn't the best (it's safe and friendly, but somewhat "depressed"), 2 - there needs to be a better water source (i.e. a new well), 3 - it' has a stuck in the 80's interior. The brother doesn't want to spend any more money to get it more appealing to buyers/lenders.
I'm considering purchasing it with my IRA funds (for less than half it's market value to the brother). Put 15 to 20 thousand into it and sell it when the market is better for a decent profit. I'm willing to take the real estate risk. There wouldn't be a loan/mortgage payment, so I'm not worried about additional monthly debt. I'm just not clear how the IRA identification is established and what steps needs to be taken.
Anyone done this?