Self Directed IRA's creative use

[Maya Gavasheli]

For example, if I have 200k ish cash and 350k SDIRA. 

And I want to buy a house out off market, all cash ARV 700k and sellers are asking 500k..

And as I mentioned already I have only 200k ish cash, and this SDIRA, how real is it to lend the money from my SDIRA to somebody  who has  his own SDIRA and this somebody lends me back his SDIRA money... Isn't it win win situation? How legal is it?

[Brian Eastman]

@Maya Gavasheli

What you propose is a prohibited transaction. You are ultimately creating a transaction between yourself and your IRA. The other party would be viewed by the IRS as a "straw man".