Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
Is it possible for my self-directed IRA and me to invest in the same syndication deal? As long as it's not my deal or one I'm more than 50% owner then that should be okay, right?
You should be okay as long as you don't get some type of management fee. You have to be completely passive in the deal and can only get distributions from the performance of the deal.
You should be okay as long as you don't get some type of management fee. You have to be completely passive in the deal and can only get distributions from the performance of the deal.
you can use your IRA and your own funds, but no matter what you do it has to be the exact same percentage, so if you invest 50% IRA and 50% own cash or loan..50% of the net income has to go back into the IRA, leaving you the other 50%
@William Huston, I assume when you say it has to be the exact same percentage, you don't mean that I have the invest the exact same percentage in the deal from either side. Just that whatever percentage I invest from either side, the profits going back into each side has to match the percentage invested. I understand that. That's not a concern since my SD-IRA is its own entity and I syndicator will be paying it back directly.
I believe it also needs to be the same time as well. Meaning your SDIRA can not invest if you are personally already invested in the syndication. Check with a CPA though.
Theoretically its possible to create an entity, put in some IRA money and some personal money creating a partnership between you and your IRA. Then that entity invests in this deal. Speak to your custodian and see if they will allow this and can refer you to an attorney that can help set it up. But its easy to run afoul of the prohibited transaction rules.
Yes generally one can invest in real estate alongside her own IRA as long it is processed as a tenants-in-common transaction, for example.
Following rules generally apply:
it has to be an all cash purchase, meaning that no debt can be brought to the table.
Has to be a simultaneous purchase, meaning that the IRA cannot put up all the money for the purchase and then later the IRA account holder puts in the money for her part of the purchase and get reimbursed by the IRA and vice versa.
The ownership percentages will be determined by how much money each party puts in at time of property purchase.
The IRA account holder cannot use the property for personal use.
The IRA account holder cannot perform repairs.
All expenses and gains flow based on ownership percentages.