I'm buying a condo using funds in my self directed IRA LLC's account at Wells Fargo. I'm using a hard money lender to finance the deal. My operating agreement for the SDIRA clearly states my name as the manager of the LLC with all rights to conduct the business of the LLC. For some reason my HML is requiring the SDIRA custodian company (the one that set up the IRA and holds the administrative accounting but doesn't do business in or with MY SDIRA LLC) fast nine have a good one to sign on my REI condo purchase. The hard money lender said it is because I don't have a financial stake in the LLC.
The whole thing feels to me like if I was trying to transfer money from my personal checking at Bank of America to someone else, and that someone else required me to get Bank of America corporate to sign off on the transfer. I own the account.
Can someone help me understand why the HML wants the SDIRA custodian to to sign with me, please?
The LLC is the borrower. You as the manager can execute the affairs of the LLC. If you were to ask the custodian to sign, they would not. They have no role over the day-to-day operations of the LLC. They simply documented that the IRA has invested into the LLC.
The LLC is the borrower. You as the manager can execute the affairs of the LLC. If you were to ask the custodian to sign, they would not. They have no role over the day-to-day operations of the LLC. They simply documented that the IRA has invested into the LLC.
@Brian Eastman you’ve corroborated my feeling of how nonsensical this requirement is. The SDIRA custodian has been resistant saying they don’t sign documents of this nature and the request is highly irregular. Thx for your response.
Lender · Newport Beach, CA · Member since 2021 · 63 posts · 43 votes
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I concur with Brian. I have made several loans to SDIRA LLCs and on each of those transactions, no one (from title, escrow, underwriting, etc.) balked at the Manager for the SDIRA LLC using the powers granted them by the Operating Agreement to bind the company on all loan/closing documents.