Using Self Directed IRA for partnership

8 Replies

I am wanting to use a self directed IRA to invest in some rentals. I currently am an investor in properties but have yet to use my IRA to do so. Currently, it is in a traditional IRA at Vanguard. Which company do you use for a self directed IRA? Is it possible to partner with someone who is using traditional money and financing and not retirement funds?

@Blake Johnson

I'm not sure about partnering with someone OUTSIDE of an IRA but I was just informed that you can partner with someone else with a self directed IRA. Also, you can partner with funds in a Coverdale account (that's an educational program kind of like a 529 plan).

I use Strata Trust Company and have been pleased with them.

You can invest in real estate, absolutely, and your SDIRA can partner with others, as long as they are not disqualified persons (Google can define this for you).

A Checkbook Control IRA may be a better fit than a run of the mill SDIRA. I'm going to be switching my regular SDIRA to a Checkbook Control account. I wish I'd learned about Checkbook control before starting with a SDIRA company that does not do checkbook control!

@Blake Johnson Yes you can invest with someone that is using traditional funds as long as the people managing the deal are not disqualified persons which your SD-IRA custodian will assist you with for sure.

Send me a PM and I'll share my SD-IRA company with you as they have been great to work with and also very responsive when wiring funds for our other investors in our syndication deals.

@Blake Johnson

Looks like your question has been answered on partnering. For some ideas on custodian/administrators of self-directed IRA's check out the list at this link from bigger pockets. I would recommend you get familiar with what is called the prohibited transactions. These are rules and regulations for who and what you can not invest in. 

@Blake Johnson

You can use self-directed IRA to buy rental property. The IRA can be the sole owner of the property if there is enough funds to do this. You can also use leverage to buy the property, however, because as 'disqualified person' you are not allowed to provide a personal guarantee - the loan must be non-recourse. Here is a list of lenders specializing in this type of loans for retirement accounts:

https://www.biggerpockets.com/blogs/2810/50272-list-of-non-recourse-lenders-for-self-directged-ira-and-401k

You IRA can partner with another IRA or individual and buy the property jointly. 

Depending on your investment strategy you may want to consider Checkbook IRA (aka IRA owned LLC).