Looking for private lender to partner

St. Louis, Missouri
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Looking for private lender to partner

Charnise Cooley
Investor · Saint Louis, MO · Member since 2016 · 4 posts · 2 votes

I have a self-direct IRA that owns a LLC. I've been using my SD IRA to for loans and ready to move to purchase rentals. I would like to partner with a investor or someone that can help me finance a property. We can work out the details to make the deal work. If anyone is interested, let me know.

Thanks,

Charnise

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
10mo
I recommend keeping the sdira for lending and buying properties with non sdira $ as you get none of the tax depreciation with real estate using a sdira and also you will be subject to UDFI on percentage that is borrowed
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    10mo
    I recommend keeping the sdira for lending and buying properties with non sdira $ as you get none of the tax depreciation with real estate using a sdira and also you will be subject to UDFI on percentage that is borrowed
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  • Brett SynickyPro Member
    Solo 401k and SDIRA Consultant · Orange, CA · Member since 2013 · 874 posts · 498 votes
    10mo
    Quote from @Charnise Cooley:

    I have a self-direct IRA that owns a LLC. I've been using my SD IRA to for loans and ready to move to purchase rentals. I would like to partner with a investor or someone that can help me finance a property. We can work out the details to make the deal work. If anyone is interested, let me know.

    Thanks,

    Charnise

    As Chris mentioned if an IRA uses leverage the income matching the % of loan amount will be subject to UBIT. It's not usually horrible depending on the numbers. Here's why.

    $100k property

    $50k/50% loan

    GRM $1000/ARM $12,000

    50% loan = 50% of income subject to UDFI = $6k

    However the taxable amount is determined after the following:

    Subtract the first $1000, expenses, and even depreciation. The latter two based on 50%

    So at the end of the day, in this example the IRA may only pay a couple hundred or so dollars annually. Discuss further with your CPA.

    Additionally the loan must be non-recourse so it'll take more down and more reserves and the interest rate will be a point or so higher than a normal investor loan. Here's a list of lenders you can talk with. Non-Recourse Lenders

    As @Chris Seveney said, you avoid UDFI/UBIT if the IRA owns the property without leverage or stick to private lending. Or if you can use a Solo 401k instead.

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  • Charnise Cooley
    OP
    Investor · Saint Louis, MO · Member since 2016 · 4 posts · 2 votes
    10mo

    WOW, that makes a lot of sense and I didn't think about that.  Geez!  There are so many other investment vehicles out there.  Well I am also considering mortgage note investment as another option instead of buying a property.  I never did that method.  I'm open to it and would like to learn more about it to see if I can use my SDIRA for that.  Are there any  sites and really good educational videos out there you recommend.  I'm available to speak off line about this as well.  I made many mistakes in my youth like we all have, so now just trying to do things differently and without the stress.  Thank you both in responding.

    1Reply
    • Lauren Sanford
      Investor · Member since 2024 · 182 posts · 63 votes
      10mo
      Quote from @Charnise Cooley:

      WOW, that makes a lot of sense and I didn't think about that.  Geez!  There are so many other investment vehicles out there.  Well I am also considering mortgage note investment as another option instead of buying a property.  I never did that method.  I'm open to it and would like to learn more about it to see if I can use my SDIRA for that.  Are there any  sites and really good educational videos out there you recommend.  I'm available to speak off line about this as well.  I made many mistakes in my youth like we all have, so now just trying to do things differently and without the stress.  Thank you both in responding.


       We JKP have been in the note space since 2010 and often use our sdira to buy them!  We have a ton of stuff available (videos , podcast show, Resources)  if interested.   There is a lot that goes into notes that is different from traditional real estate. 

      Let us know of any specific questions.  

      1Reply
  • Brett SynickyPro Member
    Solo 401k and SDIRA Consultant · Orange, CA · Member since 2013 · 874 posts · 498 votes
    10mo

    @Charnise Cooley I sent you a dm. Happy to talk anytime. 

    0Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    10mo
    Chris and Brett are spot on. Lend in the SD IRA, invest outside the SD IRA in rental properties.
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  • Wendy PattonBusiness Member
    Real Estate Consultant · Clarkston, MI · Member since 2009 · 864 posts · 350 votes
    10mo

    Good point to all - however if you have the funds in the SD IRA then you can partner with someone else (dont' make it a loan like they're talking about) If it is a slam dunk it won't matter about the depreciation - you want cash flow and equity in the SD IRA - my 2 cents. I usually just do flips and lending in mine but i have held rentals and still have a few with my friends IRA as my 50/50 partner. Either way - look for the slam dunk for the Roth IRA.

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