For the past few years I’ve used my self-directed IRA to buy, flip and hold individual lots and never considered financing due to the non-recourse lender hurdles.
I’m interested in some raw land and the owner is willing to owner finance for 20% down. My question is this, if I have my IRA buy it do I need to do anything other than make certain I have enough in the IRA account to pay each month’s payment?
When you finance property with an IRA, you have tax consequences that are two fold: 1. Tax on the profit according to the % financed (at time of sale, not originally), 2. Tax on any income off the property (you're exempted $1,000 per year).
In this case with raw land, I doubt you'd have any income, so yes the only thing you'd have to do is make sure you have enough in the IRA to meet the payments. The idea would be to hold the land long enough to pay off the mortgage and remove any tax liability.