Non recourse Loan

[Ed Ricketts]

My solo 401(k) trust owns 93% undivided interest in a home (free and clear). My wife owns 7% in her own name. Can I use cash accumulated in the solo 401(k) to buy her out so that I may get a non recourse loan on the home to free up more money for investing?

[William Morrison]

Ed, you have some really good sources of information above, folks that are in this every day.  So my question is not from that background.  Brian and Dmitriy provide great input on these forums.  I use Dmitriy with Sense Financial on an annual basis and have been very satisfied with his advise.

Have you called any Non Recourse lenders yet?
I would think they could quickly tell you under what conditions they would lend. It might require some changes to your LLC documents. Does yours define reserves and distributions to protect the lender?

Basically what I understand is that if the percentages stay the same you can add money, take distributions or make additional investments in the LLC. And a Non Recourse lender will look at the assets, income, expenses and reserves to determine risk, and maybe the distribution track record.

Seems the rates and terms are all over the map from what I've found, not even close for the exact same property.  I'm talking whole or multiple percents not tenths and quarters.
You might call NASB.  I know they do Solo 401ks and IRAs loans.  Those I know about outside of 401ks require a relationship, a track record and maybe only accredited investors as partners.