Financing ideas needed for an estate sale - 2200 sq ft + land!

[Patricia Miller]

Yes, weird question. Let me set the stage to explain this question:

1)  One spouse, self-employed, can form a Solo K by moving funds from a 403b from a previous employer. However, this fund is pretty small - big enough for a downpayment (maybe 20% for a small purchase)

2) The other spouse, currently full-time employed, sets up a Self Directed IRA - pulling funds from former employers' 403b accounts, as well. This account might be big enough for a full cash purchase of a smallish property - and is maybe up to 4 x larger than the spouse's Solo K.

The couple would like to build a portfolio of leveraged properties (asking for a friend).

If I understand this correctly, a Solo K can be used to buy/leverage rental property but the SD IRA cannot. However, the SD IRA can be used for things such as a Hard Money Loan.

Could funds from the spouse with the SD IRA be used as a Hard Money Loan (using all the proper documents, contracts, etc.) to the spouse with the Solo K (property LLC in the name of the Solo K spouse)? The Hard Money loan would be used for a cash purchase to close the deal quickly and/or beat out the competition. The intent is to BRRR the property and pay back the loan from the Hard Money lender.

Is this possible?? And, would there be an advantage to this (other than the idea that paying points and interest to the spouse's account would be amazing)? I'm guessing that because the couple file taxes as married/filing jointly, more red flags would pop up in the IRS system than you could shake a stick at.

Seriously, I have no interest in scamming the IRS. I just have a problem with excessive thinking-outside-the-box on top of very limited knowledge about how these things work.