Investing using SOLO 401k and LLC Simultaneously in the same deal

[Srikanth Katuru]

Hello Multi-Family Investors,

Would like to post this question and see if anyone has experience with this scenario of investing in Multi-family. Can a Deal Sponsor invest funds from his/her own syndication deal as two entities 1) a Solo 401k Trust and 2) an Individual LLC ? Are there any legal issues with this scenario?

Appreciate any informal insight into this topic.

regards,

Srikanth
 

[Simcha Davidman]

@Srikanth Katuru welcome to BP! While I think it's technically allowed (this is not legal or tax advice), it would be very difficult. You as an individual or an owner of any entity (or a number of related parties) CANNOT benefit at all from the ownership belonging to the 401k. So it would mean that any income/cashflow attributable to the 401k's ownership CANNOT go to you (or an entity owned by you, or one of the enumerated related parties or an entity owned by them) - e.g. acquisition fee, management fee, plumbing expenses if you do plumbing work, etc., but must go to an arm's length third party or stay within the confines of the 401k.

I would not recommend it.

But, it might also not be allowed anyway. I'm sure someone else who knows more will chime in and help out!