SD Check book IRA owning other LLC’s

[George Vigil]

What is the best way to structure a Joint Venture/ 2-Member Partnership LLC owned by a SDIRA?

Context:

My SD IRA is parterning with a sole proprietor - Real Estate Broker on a single cash deal in Colorado. I do plan to invest in properties in TX and FL with separate partners which will leverage LLC's.

Thank you in advance for your insight.

NOTE: Submitted first SD IRA investment property offer and it was accepted for $30K under asking price on 2019 4/3 SFH.

Monthly cash flow @ $ 2700/ mo and 8% appreciation market.

[Brian Eastman]

@George Vigil

Think of your IRA-owned LLC as a "fund", such that the IRA can own it and you can control it to deploy the capital into suitable investments.

You can place the capital directly into an investment asset, or indirectly into an asset such as by having the IRA LLC own a another LLC that then holds an asset such as property.

So long as you avoid self-dealing or dealing with disqualified persons, the LLC can joint venture or partner in most any way that any other investor could. Work with a real estate attorney to design the best arrangement between the IRA LLC and a partner.

In the case of the Colorado deal you mention, your LLC could purchase the property jointly as tenants in common with the realtor, but then s/he would have no personal liability protections. S/he could form a LLC, then that LLC and your LLC could JV as tenants in common. Alternately, your LLC and the realtor could form a LLC for the property project. There are advantages and disadvantages to each of the above routes, but all would be allowable for the IRA.