Solo 401K rental investment with a recourse loan

[Chris Weiler]

Ok, right off the bat, I know Solo 401K’s cannot directly borrow using a recourse loan. But hear me out and let’s discuss a specific scenario: 

An LLC is created with 3 equal partners. One partner is a Solo-K and the other two partners are not "disqualified persons". The goal is to buy cash flowing rentals. Let's assume the LLC gets a recourse loan (for a rental property) and only the two partners (not the trustee of the 401K) signs a "personal guaranty". Let's also assume the lender is OK with the trustee (me) of the Solo-K not signing a personal guaranty. In this scenario, the 401K benefits from a recourse loan and the lender has no recourse against the trustee. Any idea if this would fly? Do you think this is a prohibited transaction?