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Updated almost 7 years ago on . Most recent reply

Self directed IRA questions?
Questions for you self directed IRA Gurus:
Can I buy a property as the following:
50% my own cash (under an LLC)
50% of my self directed IRAs LLC
Is this legal? And if it is, can my personal LLC withdraw 50% of the profits (rent, gains at sale) legally?
Does it make a difference if the arrangement is more:
70% IRA LLC
30% cash LLC
Do you have to buy properties full cash outright with a self directed IRA, or could my IRA/myself get a commercial mortgage?
Since myself (cash, under LLC 1) would be a normal entity, could that portion of ownership gain the tax benefits of depreciation, etc that a normal investment would have? (I know the IRA LLC does not benefit from these tax advantages)
Sorry guys I’ve tried googling this stuff and I cannot find great answers on this scenario.
Most Popular Reply

@Account Closed
The starting point of "he has an old SDIRA from his employer" sounds fishy to me. Most employer plans are not self-directed and capable of investing in real estate.
The deal you propose could work in a self-directed IRA. There are certainly some complexities such as exposure to taxable UDFI (unrelated debt-financed income) on the leveraged returns. The transfer of the asset, with the sub-to note and pending tenant option deposit will also be somewhat complex and perhaps difficult under a custodian managed self-directed IRA.
A self-directed IRA LLC or Solo 401(k) that would offer the investor checkbook control would be much better suited to this transaction.