Has anyone successfully financed investment properties held in an LLC owned SDIRA

Question

Investor is acquiring rental properties through an LLC owned by his IRA, so the loan needs to be non-recourse. Standard DSCR lender I checked with cannot do it because they require a personal guaranty.

He also owns another property in the same IRA structure that was purchased cash, and he is exploring whether he can pull equity from that property to help with down payment on 3 new acquisitions — either through a cash-out refi or possibly a larger portfolio/blanket structure if the numbers work.

Main questions:

• Which lenders are actually doing non-recourse loans to IRA-owned LLCs right now?
• Are any allowing broker/referral relationships, or are these mostly direct-to-lender?
• What LTVs are realistic on purchase?
• Any cash-out refi options if the existing property was recently purchased, or is seasoning usually required?
• Has anyone successfully structured multiple IRA-owned properties into one portfolio/blanket non-recourse loan?

Not looking for theory — mainly trying to connect with people who have actually closed this type of structure recently.

Matt Devincenzo · Answer

I'm not sure if you found this list from @Dmitriy Fomichenko

https://www.biggerpockets.com/member-blogs/2810/50272-list-o...

It's a bit older, but it's a starting place for these lenders. Also Dmitry is in this same space and may be able to share his own personal recent experience with this.

Dmitriy Fomichenko · Answer

@Matt Devincenzo,

Thanks for the mention! While the post is older, the list has been updated several times, so it should still be pretty accurate.

@Nick DiSanza,

Go to the list Matt posted to get the list.

Most are direct lenders, but there are a couple of brokers; contact each lender directly to learn more.

Generally speaking, the LTV for non-recourse loans is at 60%, but it varies from lender to lender and also depends on property type, location, etc.

Typically, seasoning is required to use the new appraised value, but you should be able to do a cash-out at any time. Again, check with each lender for their requirements.

Hope this helps!

Alex Boyadzhyan · Answer

A few real names to start with. NASB (North American Savings Bank) and FirstBank both do non-recourse lending directly to IRA owned LLCs across most states, and SouthStar Bank is another one that lends straight to the IRA as borrower. These are lenders that actually specialize in this, not DSCR shops treating it as a side product, which is probably why the one you checked with said no.

LTV usually caps around 60 to 65 percent. Most of these lenders want 35 to 40 percent of the purchase price already vested in the IRA before they move forward.

On the cash out refi for the property he owns free and clear, that's something these lenders will look at, but it comes down to the appraisal supporting the new loan amount and the property having a clean income history, since there's no personal guaranty to fall back on if it goes sideways. Seasoning requirements differ by lender, so worth just asking each one directly instead of assuming a set timeline.

Blanket or portfolio loans across multiple IRA owned properties do exist but in my experience they're mostly reserved for investors who already have a track record with that specific lender. Not something most will hand out on a first deal.

Broker relationships are mixed too. Some of these lenders work through brokers, some only go direct, so that's worth confirming case by case.

One thing that trips a lot of people up here, the debt financed portion of the property triggers UDFI inside the IRA, so part of the rental income ends up taxable through a 990-T even though the account itself is tax advantaged. Worth running those numbers before deciding how much leverage to use, since it can change whether the deal still pencils out.

Has anyone successfully financed investment properties held in an LLC owned SDIRA

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