Non-recourse loan on SDIRA and partnering with oneself

[Andy Wolfe]

Hi,

I've run into a sticky situation and would appreciate advise.

I have about $140,000 in my SDIRA at the moment (actually I haven't rolled in the money just yet but that is what the balance will be).

I have found a property for $300,000 that I want to buy using my SDIRA money and by getting a non-recourse loan.

The non-recourse loan lender has advised me that I need a sum of $170,000 in my IRA to qualify for a property worth $300,000.

Since I don't have the required amount the lender has advised me that I can "partner with myself" or something like that. I'm trying to find out more details but I think they're saying something like:

That I could buy the property say:
1. 33% owned by me personally (or by an LLC I own)
with me arranging $100,000
for example can I get my parents to give me a non-recourse loan for $100,000?
2. 67% owned by my IRA
with my IRA contributing $100,000
with the lender contributing $100,00

Is something like this possible and strictly legal or is this in the grey area?
is there a name or this arrangement?
Any links or references to this would be much appreciated.

Thanks.

[Matt Devincenzo]

No problem, I'm constantly in the same boat, trying to figure out how to keep all of my IRA cash actively invested to maximize it's return.

a. Yes, and expenses go 50/50 as well so Joe IRA needs to have reserves if something comes up.

b. No, this is where you get into the prohibited transaction. The only way out is to sell the property outright.

c. Same as above, except if you hit retirement age you can take the property as a qualified distribution essentially just like if it was cash you would receive the value of the property for your distribution.