Being Borrower SDIRA

6 Replies

@Matthew Wright

If they have a custodian then yes you will need to complete their forms depending on type of investment and provide them with the relevant information

They can be very difficult so make sure all paperwork is in order

Originally posted by @Matthew Wright :

When my LLC is borrowing from someone's SDIRA, do I have to deal with the custodian/agent that is handling the SDIRA or provide them with info.

If the individual who is loaning money to your LLC has checkbook control over their funds (e.g. because their IRA is invested in an LLC of which such person is the manager of the LLC), the person can loan your LLC funds via the LLC which is owned by their IRA. This means that the loan (and related promissory note) would be payable to the IRA LLC and you (as well as the investor) would not have to deal with the custodian.

@Matthew Wright

You will be dealing with the IRA owner, ultimately he/she is in control. However, the funds are held by the IRA custodian so they will be involved as well. You and the lender would have to arrange the paperwork such as promissory note and deed of trust (I'm assuming this is a secured loan?) and then get those documents submitted to the custodian with the required form (each custodian will have their own form they require to be submitted with the investment documents). The custodian then will release the funds to an escrow company handling the closing of the loan.

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