Can I COMBINE my cash with my SD-IRA to buy a flip?

[Zabrina Horton]

My idea is to use $15,000 of my SD-IRA along with $17,000 cash to buy a flip for $32,000. ( The rest of my SD-IRA is currently loaned out to a vet flipper).

I would like to "charge myself" 1% interest annualized, and return $15,000 + $1,500 in interest back to my SD-IRA. The rehab is approximately $10,000 and the ARV is approximately $80,000.

I'm only $42,000 out of pocket, plus all the costs, the PM fees, the seller commission when it sells, etc. etc. I know the ROI of my cash is somewhere in the ballpark of $10,000 maybe $15,000, but, I think it will be a great exercise for my first deal.

Do any of you more seasoned REI vets have any thoughts you'd like to share with me? About either combining SD-IRA and cash? Or, about the deal? This particular property price is too small for a hard money loan. Time is of the essence to put my cash to work before it runs out!

[Brian Eastman]

@Zabrina Horton

As @Joe Villeneuve notes, this is not an allowable transaction. What you are proposing is no "comingling" of funds, which is not allowed, but an actual transaction between your IRA and yourself in the form of a loan. You absolutely may not transact between the plan and a disqualified party in any fashion - whether direct or indirect. To do so would disqualify the entire IRA, not just the $15K involved in the transaction.

Stick with lending to unrelated 3rd parties.