Partner with you SDIRA multifamily buy and hold questions

[Bernie Huckestein]

Questions about partnering with your own SDIRA...let's say 50% inside SDIRA and 50% outside SDIRA.  Let's also say together we purchase a multifamily @ $1,000,000   I understand the prohibited parties issue.

1) If we (myself and the SDIRA) were going to put 20% down...does that have to be in equal amounts meaning 10% from me and 10% from SDIRA and everything is split 50 / 50 or can you still have normal deal partnership flexibility...so something like the SDIRA puts in the entire 20%, owns 50% of the property but gets a "preferred return", etc.

2) Perhaps the bigger question is financing, I know there is SDIRA financing that is non recourse but that is typically for 50% LTC. Is there a way -- as in this case, where I can get a mortgage for the 80% in my own name and the non recourse part for the SDIRA is that I am personally on the hook for the funds and not the IRA hence non-recourse

Thanks, b

[Dmitriy Fomichenko]

@Bernie Huckestein,

You absolutely can not get a mortgage in your name if your IRA is part owner of the property. It is possible to have the partnership structured with your IRA, the process can be cumbersome so it is crucial that you work with qualified and experienced professional who can assist you with proper structure. The contribution must equal ownership split, in other words if your IRA is 50% partner - it must contribute 50% of the cash required for the deal. While it is possible to do the partnership with your IRA there is a likelihood that such transaction can lead to prohibited transaction, thus disqualifying your IRA. Generally I would recommend to stay away from such transaction, there are many investment opportunities available for your IRA to invest on it's own, that is what you should consider.