Self-Directed IRA Partnership

[Trever Nicoll]

I currently have a piece of development land under contract. There is an individual who owns 4.5 acres surrounding my property and I would like to partner with her to do a larger development. Her IRA owns the 4.5 acres, so I am trying to figure out some creative ways to structure the partnership or the best way to approach the partnership so that we can leverage the land as collateral for the development. Is it possible to purchase the land then use the IRA as a small private lender/investor then have another loan for the rest of the development? I just don't know all the rules. Any advice/experience would be appreciated.

[Eamonn McElroy]

@Trever Nicoll Both you and the IRA individual will want to engage a competent tax CPA/EA and an attorney...but one idea is to form a special purpose entity (e.g. LLC) and have the IRA contribute the land for an ownership interest. Assuming the LLC is taxed as a partnership, the operating agreement can be pretty flexible.

The LLC would then own the 4.5 acres and could use it as collateral for a loan.