Self Directed IRA lending

[Basu G.]

Hello,

We are 3 partners involved in Rental Real estate. For simplicity lets say A, B & C each with 33% equity. All of us have individual IRA. Would it be allowed for A to lend to B and B to C and C to A. These all would be unequal amounts. Note that the lending is from IRA to individuals as hard money and they in turn would invest in buying the real estate together. The Real estate entity would pay the interest it would pay any hard money lender, but the money would instead go through the borrowers to the IRA. In effect IRA would still be generating market or better than market returns.

Any suggestions ?