{"id":1412,"date":"2010-04-20T23:47:43","date_gmt":"2010-04-21T04:47:43","guid":{"rendered":"https:\/\/www.topmexicorealestate.com\/temp-blog\/?p=1412"},"modified":"2010-04-20T23:54:31","modified_gmt":"2010-04-21T04:54:31","slug":"using-self-directed-ira-for-your-mexico-property-purchase","status":"publish","type":"post","link":"https:\/\/www.topmexicorealestate.com\/blog\/2010\/04\/using-self-directed-ira-for-your-mexico-property-purchase\/","title":{"rendered":"Using Self Directed IRA for Your Mexico Property Purchase"},"content":{"rendered":"<p>A friend of mine here in Mexico, Doug Jones just wrote quite an interesting article regarding Self Directing IRA s.\u00c2\u00a0 I thought it would be good reading for you interested in <a href=\"https:\/\/www.topmexicorealestate.com\" target=\"_blank\">Mexico real estate<\/a> and options available for your purchases.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"Mexico IRA\" src=\"http:\/\/i255.photobucket.com\/albums\/hh138\/beatlo\/Homes%20Monopoly\/s_house-1.jpg\" alt=\"\" width=\"348\" height=\"242\" \/><\/p>\n<p>I have been receiving many inquiries recently about using your self-directed IRA to purchase <a href=\"https:\/\/www.topmexicorealestate.com\" target=\"_blank\">real estate in Mexico<\/a>.\u00c2\u00a0 Can it be done?\u00c2\u00a0 You can purchase with your IRA if it is strictly income producing property and no personal use (no leeway on this), and if it is in the interior of Mexico where no fideicomiso\/bank trust is required for foreign nationals to purchase property in Mexico.\u00c2\u00a0 The problem of purchasing using a self-directed IRA is when a fideicomiso is required.\u00c2\u00a0 By Mexican law, all foreign nationals purchasing in the restricted zone in Mexico require a fideicomiso.\u00c2\u00a0 The restricted zone is 100 kilometers from the Mexico border, and 50 kilometers from the ocean.\u00c2\u00a0 This means that a foreign national (i.e. US and Canadian citizens) needs a fideicomiso\/bank trust unless they purchase in the interior of Mexico \u00e2\u20ac\u201c areas like Lake Chapala\/Ajijic, San Miguel de Allende etc.\u00c2\u00a0 All lenders who are doing loans in Mexico require a fideicomiso EVERYWHERE in Mexico.\u00c2\u00a0 This is a lender requirement, not a Mexico government requirement.<\/p>\n<p>To purchase real estate property through your self-directed IRA, the property must be in the name of the LLC that is set up.\u00c2\u00a0 When purchasing with a loan in Mexico, title MUST be taken in individual names.\u00c2\u00a0 Taking title in an LLC name is not allowed.\u00c2\u00a0 Therefore, it is not possible to use a loan AND your self-directed IRA.<\/p>\n<p>Additionally, all USDollar residential mortgage lenders in Mexico will not do loans on investment property \u00e2\u20ac\u201c loans can be done only for vacation\/second homes.\u00c2\u00a0 People may choose to rent out their homes in the future, but again, this is personal use\/rental of your property would be at cross-purpose with the requirements of the IRA purchase.\u00c2\u00a0 With the self-directed IRA, the property MUST be an income producing property and zero personal use (not even one day) is allowed.\u00c2\u00a0 The IRS is monitoring this very closely for self-directed IRA\u00e2\u20ac\u2122s.<\/p>\n<ul>\n<li>Bottom      line, there is no way to purchase a property in Mexico with both your IRA AND      a mortgage loan in the restricted zone of Mexico (which is where most US      and Canadian citizens choose to purchase).<\/li>\n<\/ul>\n<ul>\n<li>You      cannot purchase property with 100% cash from your self-directed IRA in the      restricted zone because this requires a fideicomiso.\u00c2\u00a0 To my knowledge, there are no      fideicomiso\/trust companies (banks primarily) that will allow the      beneficiary of the trust to be in the name of the LLC\/IRA \u00e2\u20ac\u201c a requirement      of the IRS when using self-directed IRA\u00e2\u20ac\u2122s to purchase property \u00e2\u20ac\u201c the      property cannot be in the name of the individual which is how the      fideicomiso needs to be created.<\/li>\n<\/ul>\n<ul>\n<li>Your      only option to use your self-directed IRA to purchase real estate in Mexico is      to purchase in the interior with 100% cash.\u00c2\u00a0 This is the only transaction in Mexico      that won\u00e2\u20ac\u2122t require a fideicomiso. You will then also need to meet the      strict income property\/not for personal use requirements of the      self-directed IRA.<\/li>\n<\/ul>\n<p>As Doug states,\u00c2\u00a0 &#8220;If you are interested in purchasing in Mexico and cannot use your self-directed IRA, I can do a loan for you with 25% down plus your closing costs.\u00c2\u00a0 Interest rates currently start at 6% and interest IS tax deductible on US tax returns as a second home, and possibly as a rental property for Canadians.\u00c2\u00a0 We have all the reliable USDollar loan programs available in Mexico.\u00c2\u00a0 We can also pre-approve you for a loan BEFORE you write a contract if you prefer.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A friend of mine here in Mexico, Doug Jones just wrote quite an interesting article regarding Self Directing IRA s.\u00c2\u00a0 I thought it would be good reading for you interested in Mexico real estate and options available for your purchases. I have been receiving many inquiries recently about using your self-directed IRA to purchase real [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[77,254,298,13],"tags":[],"class_list":{"0":"post-1412","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-how-to-buy-real-estate-in-mexico","7":"category-mexico-investment-property","8":"category-mexico-loans-mortgages","9":"category-mexico-real-estate-tips","10":"entry"},"_links":{"self":[{"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/posts\/1412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/comments?post=1412"}],"version-history":[{"count":3,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/posts\/1412\/revisions"}],"predecessor-version":[{"id":1414,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/posts\/1412\/revisions\/1414"}],"wp:attachment":[{"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/media?parent=1412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/categories?post=1412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.topmexicorealestate.com\/blog\/wp-json\/wp\/v2\/tags?post=1412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}