SD IRA for rehab flips

[Doug Rich]

Do I have this right ?

We legally can not work on a property that is financed, even in part, by our own SD IRA...

However, If we hire one of the SD IRA companies to custodian our account, they, as a third party,  can use the funds to finance our purchase of a rehab property.  

Right ??     DnD

[Brian Eastman]

@Doug Rich

Whether your IRA is deployed into a transaction via a custodian or via a checkbook plan such as a IRA LLC or Solo 401k, the rules are the same.

You as a disqualified party to the plan cannot receive a benefit such as compensation for services performed or personal use of the property.  Likewise, the plan may not receive a benefit from you such as the provision of services such as rehab work.

All transactions must be executed at arm's length. The IRA capital can purchase a house and pay contractors to do work on that house, so long as there is no direct or indirect benefit or transaction between the IRA and a disqualified party (you, lineal family, entities owned by you or lineal family, etc.)

The IRA can joint venture or partner with other investors, but should not interact with you or other disqualified parties on funding a deal jointly.