The order of things.

[Steve Frick]

Hello BP

I am still a beginner in REI. I do own one SFH and manage another. I have been reading and learning so much over the last 6 months that 2016 will be full steam ahead! I do have a partner that wants to buy more SFH's and I on my own want to roll over my IRA to a SDIRA and do some flips in the area. But before I do I want to make sure the foundation is solid. As of now I do not have a LLC stated, or S-Corp, or anything to that matter. Before I move ahead is it a good idea to start a LLC? Or any better entity for this. Or should i start 2 one for the partnership and one for the SDIRA? One more thing how do I transfer the existing rental home I have to the new LLC or whatever I decide to start. Thanks for all your posts it has thought me a lot and given me the courage to move ahead in my REI future.

[Doreen Chaisson]

IRAs cannot invest into S-Corps. Your IRA can own a single member LLC or invest into an existing LLC that is not currently owned by you or any disqualified parties (your spouse, your parents, your children or their spouses). You cannot transfer any existing personally owned assets into your IRA -owned LLC. It is a prohibited transaction to have any sale, exchange or lease of assets between yourself personally and/or any disqualified parties and your IRA. Any properties purchased by the IRA-owned LLC must be new properties not currently owned by your or any disqualified parties. Furthermore, you and disqualified parties cannot live in or use any of these properties, nor can you do any of the maintenance, upkeep or construction work on them. It must all be handled by outside, 3rd parties.