Utilizing a self-directed IRA to acquire unimproved real estate has proved to be a good long term investment option for many investors. If it would be advantageous to finance your land purchase, you may consider the use of a non-recourse loan which could be provided through Island View Mortgage.  All capital used to purchase and improve the real estate must come from either the IRA or a non-recourse loan on the property. Most locations within the U.S. are considered non-recourse states. The mortgage you use for any real estate held within a self-directed IRA must be a non-recourse loan. With your self-directed IRA as the borrower, you are not personally liable for any more dollars than the real estate is worth. Any creditor may take your land through the foreclosure process in the event of a loan default. Because it is a non-recourse loan, the creditor is not legally permitted to require any further money from you or your IRA, even if the value of the land is less than the amount owed.

Non-recourse states hold their own unique anti-deficiency statutes that provide protection for borrower of the loan. These states include: Alaska, California, Idaho, Arizona, Texas, Washington, Utah, North Dakota, Minnesota, North Carolina, Connecticut and Florida. It is important to consider that different non-recourse states each have differing laws. For instance, certain states, including California, stipulate that a borrower is only protected by non-recourse laws if the loan is a purchase money loan where they borrow from the seller as opposed to a bank. In addition to non-recourse states, you should also know that there are one-action states, which include: New York, Montana, California, Idaho, Utah and Nevada. Here, lenders are entitled to one lawsuit in which to collect their debt from the property.

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