First Western Federal Savings Bank has been financing “Vacation Homes” for rent all across the country.  Because of our customer’s success and repeat business, I attended the Home Away VRBO, www.vrbo.com, and www.Homeaway.com, summits in Atlanta and Denver over the past few months.  I was fortunate to meet many vacation owners and hear their success stories.  I also met many of the vendors and learned of the services they provide.

For example:

I met Mickey Kropf with www.Vacationfutures.com.  They provide management services for your Vacation Rental.  They have a very interesting service.

Two tables over was, Beth Carson with www.VRFusion.com.  She wrote the book, “Money Making Vacation Rentals” which helps take the guess work and learning the hard way out of the process.  Her book guides you every step of the way.

First Western Federal has been lending to customer’s IRA’s and other retirement plans for the purpose of buying income producing properties since 2008.  Using a Self-Directed IRA in the purchase of a vacation home has great benefits.  The profits stay in the IRA tax-free or tax-deferred depending on what type of IRA.  In addition, all of the appreciation remains in the IRA tax-free or tax-deferred.

Our normal loan for a Vacation Rental is as follows:

$300,000 purchase price

$150,000 down payment from the IRA

$150,000 non-recourse loan from First Western Federal

All of the income goes directly into the IRA and all of the expenses including the loan payments come out of the IRA.  The loan is written as a non-recourse loan to the IRA.  The individual has no ownership or obligation on the loan.

The process is no different than you buying a dividend paying stock in your IRA.  The dividends go back into the IRA, not to you personally.  If the stock goes up by 30% and you sell the stock, the proceeds go back into the IRA, not to you until you decide to take a distribution.

Go to our web site; www.MyIRALender.com and look through the resource section for additional help. I have had a self-directed IRA since 1986.  I now have three, my wife has one, and so does my son.  A few years ago I found a book called “IRA Wealth” by Pat Rice.  His easy way of explaining the self-directed IRA rules, new ideas, do’s and don’ts are priceless. I believe this resource is a requirement for anyone with a self-directed IRA.

If this game plan is of interest to you, take a look at our application on our web site and then send me a quick email at jeff@myiralender.com and ask for our loan term sheet.  We are a small bank that specializes in income producing real estate loans.  We give prompt straight forward answers.