Solo 401(k) vs Self-Directed IRA LLC

[Dave Versch]

I've been reading a lot about both the Solo 401(k) and the Self-Directed IRA LLC. From my layman's perspective, it would appear at first glance that Solo 401(k) is the way to go. No custodian to deal with and higher contribution limits to name a couple of things seem to weigh in its favor. Can anyone tell me the downsides of a Solo 401(k) vs

the SDIRA LLC, if any?

I have two other considerations that I need to keep in mind as well:

1) The account will be initially funded by rolling over some money from an existing IRA. Subsequently, funds will come primarily from tax lien certificate investments and related activities. I'd like to be able to pay myself a salary out of the funds in the account. So, for example, let's say I roll 50K into the account initially, and during the year I make $7500 after expenses. I would like to be able to pay myself the $7500 (or any higher or lower amount, for that matter) as a salary for the work I do pertaining to tax lien investing - property research, attending auctions, administrative duties, etc. I'm thinking that this could be a way to get at some of the funds in my tax-deferred account without having to make early withdrawals and getting hit with penalties, etc. Has anyone done this? Which of the two structures would lend itself better to this type of thing?

2) I currently have a full-time job (unrelated to real estate), at which I already contribute to the company's 401(k) plan. Will this prohibit me from participating in my own Solo 401(k) or SDIRA LLC?

Thanks for reading,

Dave