Can a Husband and Wife with Separate IRAs Both Lend on the Same Property? If So, How?

[Mitch Messer]

We've got an interesting private lending situation:

- Husband and wife, each with their own checkbook SDIRAs, want to lend on the same real estate deal.

- Borrower needs $100K.

- Each spouse can lend $50K.

First question: Is this even allowed?

Second question: If allowed, what's the best structure? A first and a second lien? A single shared co-loan? Something else?

I'm asking because the guidance we're getting from their IRA custodian sounds questionable. We'd like a second opinion.

Has anyone here done something like this?

Any advice and/or insight would be greatly appreciated!

Thanks in advance!

[Brett Synicky]

Quote from @Mitch Messer:

We've got an interesting private lending situation:

- Husband and wife, each with their own checkbook SDIRAs, want to lend on the same real estate deal.

- Borrower needs $100K.

- Each spouse can lend $50K.

First question: Is this even allowed?

Second question: If allowed, what's the best structure? A first and a second lien? A single shared co-loan? Something else?

I'm asking because the guidance we're getting from their IRA custodian sounds questionable. We'd like a second opinion.

Has anyone here done something like this?

Any advice and/or insight would be greatly appreciated!

Thanks in advance!

There are a few ways to do this. 1: create a multi-member LLC, both IRA's are the members and the LLC holds all the assets. 2: each have their own LLC that invests into one asset as "co-investors" so to speak. Option 2 is much better typically because you won't be restricted to that one LLC having to do the same investments at the same time with the same original 50/50%. Option 1 is not ideal unless both spouses or other people are only going to do one investment together like a $10 million apartment building or something. In the thousands of checkbook IRA's we've set up we've done less than 10 multi-member LLC's.On the other hand if they qualify for a Solo 401k now the 401k is the investor and much easier to "combine" both spouses funds without the restrictions that come with the multi-member LLC.In either case, all expenses and income related to a combined investment must be shared pro-rata throughout the life of that investment.