Are you going to sell the properties you are buying with your ira before you or your husband die?
Don’t you lose any potential stepped up basis with an ira?
Are you going to buy out the iras share of ownership at some point?
“Are you going to buy out the iras share of ownership at some point?”
no we cant. that is NOT allowed. Once a property is bought with IRA $$ the % of ownership cant change.
"Are you going to sell the properties you are buying with your ira before you or your husband die?
Totally depends on our financial needs. I would guess in 10 years or so the answer would be yes, as we have to follow IRA rules for how much we must withdraw starting in 6 years. when we both turn 70
It will be part of our estate if we dont use it up all.
“Don’t you lose any potential stepped up basis with an ira?”
not that I’m aware of. Do you know something I dont?
I am sure there are things I know you don’t know. I am sure there are things you know that I don’t know. 
I don’t think there is a stepped up basis with tradional iras unless something has changed and I missed it. I don’t think you mentioned using a Roth Ira which has its own tax rules.
https://rodgers-associates.com/blog/traditional-iras-unlike-other-assets/
we dont have any Roth IRA’s.
our home is our largest asset and if one of us dies the other will be in fat city money wise.
That’s cool. You are a Menlo Park mom so what you wrote is not a surprise. 
How can you do this? It’s half-owned by the IRA. If the IRA isn’t paying half of the repairs, it would be considered a contribution.
How is that going to work? Is the custodian going to handle collecting all the rents and divide it up? Are your tenants going to write two checks?
Yes. And you lose the benefit of capital gains rates if you sell prior to that.
Plus, if you live long enough the RMD rules will force you to sell the place, and you will lose the income stream.
So there are some downsides to this strategy. You also lose all the tax benefits that rental property normally gives you.
If I was going to do this, I would probably convert the IRA to a Roth and take the tax hit now. Then nothing is taxable ever and you don’t have to worry about RMDs.
This is definitely not allowed. You cannot sell to yourself.
“Are your tenants going to write two checks?”
yes / or preferably 2 wire transfers. It should not be a big deal. We receive our current rental income through wire transfer each month.
“If the IRA isn’t paying half of the repairs, it would be considered a contribution.”
We will leave a small amount of rental $$ from the IRA portion each month in the account that is set up just in case of repairs.
“Plus, if you live long enough the RMD rules will force you to sell the place, and you will lose the income stream.”
Given where we are looking to buy we dont feel we will lose $$ on the eventual sale of the property. We are pretty savvy , picky buyers. There is a built in demand for lower end housing rental places in the city we are concentrating on, since it is a college town ,and there are NO lower end rentals being built there these days.
The other place we bought 1.5 years ago in the same SCal town is worth 20% more than what we paid for it.
We have been through all the ups and downs of property valuations in Calif over the past 40 years, and have a realistic idea of what the future may bring.
@dstark can you convert the small apt building into condos and sell? Not familiar with the SF restrictions.
That can be a pretty good idea under certain circumstances. I do like the idea.
In SF, condo conversions for buildings like my mom’s have been suspended until 2024. There are also other restrictions…so condo conversions are not happening at my mom’s place.
@notrichenough, AirBnB charges 3%. One would still need someone to look after the property.
Serious complications with IRAs. I wouldn’t own it in a qualified plan, but in a dynasty trust.
I find it absolutely incredible how SF can suspend a small person from having a condo conversion. I do understand the big builders etc, but I guess that is why I don’t live there.
According to this article “The long and short of baby boomer balance sheets”:
https://am.jpmorgan.com/gi/getdoc/1383246462222
the authors seems to believe that baby boomers (born between 1946 and 1964) may eventually have to liquidate (or just downsize) their non-financial assets (i.e., their houses) if they are going to support their relatively high consumption life style in the next couple of decades.
Since the generation X and the millenniums are not better off than the baby boomers when they were in their age, who are going to buy the houses that are liquidated?
If there is some truth in it (i.e., you eventually have to liquidate the property), when may be the good time to “cash out” the residential property if you do not plan to use it to generate your income stream? In less than 10 years (e.g., 7 or 8 years)?
Who? The Chinese!!! 
They’ve bought all available RE in Vancouver BC and SF and are now buying HI.
I think there are still a fair number of baby boomers and just slightly younger who will be inheriting significant assets. Not us, but just in the last five years we’ve seen that happen with a number of people we know.
Right now our house suits us very well with a great office in the home that I use extensively with clients. Most alternatives don’t have that option. So, while we’d realize a pretty huge gain on sale, we’re not selling soon.
Downsides are that old houses have a lot of maintenance issues. One thing I noticed with MIL was that the last 25 years of her life (in the same home) she basically did nothing to fix any things that broke unless they were acute problems. We kept a handyman busy full time for three months fixing all those little things before we were able to sell. That has pushed us to being a lot more aggressive about keeping after the little things now. And the not-so-little things, like an expensive and very complicated new roof this summer.
" Downsides are that old houses have a lot of maintenance issues. One thing I noticed with MIL was that the last 25 years of her life (in the same home) she basically did nothing to fix any things that broke unless they were acute problems. We kept a handyman busy full time for three months fixing all those little things before we were able to sell. That has pushed us to being a lot more aggressive about keeping after the little things now. And the not-so-little things, like an expensive and very complicated new roof this summer."
@arabrab, good for you for taking action! I am watching what my parents are going through right now, old house, needs lots of work–and my Dad can barely get up, but has been unwilling to hire anyone so far. He’d be happy if me, my Mom and my husband did all the work for free, while he directed everything, of course. However, they have a great deal of money (think a million plus, with almost no bills, ss and pension coming in), and I’m not going to ask my husband to do my Dad’s projects because he’s cheap! They HAVE to get used to hiring someone. My Dad cannot even leave the house, because he is so unsteady. He finally agreed to hire someone (who is cheap, of course) to install the handrails, though it will probably take weeks for him to design something simple, and they are arguing about whom to hire. To get to his doctors appointments, he says he will crawl down the steps. He could get something simple installed today, by a professional, but he doesn’t want to pay the money and he wants the joy of designing the project.
I think it’s a really good idea to start getting things fixed before you go CRAZY like this and are willing to crawl down the steps. It makes me want to scream. :((
My aunt had one of those chair elevators (home stair lifts) installed in her house. She sits in a chair. Presses a button. The chair goes up and down. I think the cost was a few thousand. In 25 years, I may install one for me.
That lift looks really useful. We have a space in our house where we could put an elevator, but then again, I keep telling my husband that I’d rather install a zip line from the top floor to the back yard. Maybe not so good for aging… 
With my Dad’s situation, he is living on the main level. The problem is the steps that go down to the car, through the front yard. There’s actually only a few that are a problem, and I just found something online that looks easy to install, that he can use temporarily until he designs his project (could take him a year, knowing him). God, I think I’ve been suckered into paying for it and getting my husband to install it already, just the stupidity of crawling on your hands and knees forever because you’re a cheapskate.
How old is your dad?