Buying investment property using LLC

[Naresh Hanchate]

Hello Everyone, I am new to bigger pocket forum. I have 2 rental property and 1 primary home in Southern California. I am looking to my my 3rd investment property to rent out. I heard of Real estate investment through IRA. I learned a bit from Midlandira.com. They also mentioned that IRA can invest in LLC. Does anyone have idea on following question? If I And my wife invest our IRA in LLC and with some my own cash, buy a property using my credit. For example, 150k from my Ira,50k from wife Ira and 70k from personal cash use it for 30% down payment for a property in Southern California. Is it possible and tax / irs headache? Thank for reading and guiding. Thank n Regards Naresh

[Dmitriy Fomichenko]

Naresh, 

You and your wife are both considered to be disqualified to your IRA. IRS does not allow any transaction between IRA and disqualified person, all transactions must be "arms length".

If you decide to use leverage in your IRA the loan must be non-recourse, you are not allowed to use conventional financing because it requires personal guarantee. Here is a list of non-recourse lenders:

https://www.biggerpockets.com/blogs/2810/50272-list-of-non-recourse-lenders-for-self-directged-ira-and-401k